PurCo is falsely accusing me of damaging my rental car

When the “check engine” light comes on in Jonathan Drew’s rental SUV, Budget tells him to keep driving. Then PurCo sends him a bill for damage he didn’t cause. Can our forum advocates persuade PurCo to drop the claim?

Question: I rented an SUV from Budget for a one-day rental. I did not take pictures of the car at the time I received it, but I did walk around the car and there was no apparent damage.

As my wife and I were driving to another city, the check engine light came on so I immediately called the local Budget office. Budget’s agent told me to keep driving to my destination city and pick up another rental. I did as they instructed me.

Then I received a letter from PurCo, which stated that I would be responsible for loss of use damage plus any other damage. I called and explained exactly what happened and thought the issue was finished. I just received another letter from PurCo saying that I was responsible for caked mud inside the engine compartment which caused the “check engine” light to come on.

I did not drive the SUV over muddy ground. The damage was caused by a previous renter. Can you help me get rid of this phony damage claim? — Jonathan Drew, Helena, Mont.

Answer: I’m sorry you received a spurious claim for damage to your rental car. Cases such as yours have become an all-too-common line of revenue for car rental agencies.

Budget’s master rental agreement, which applies to all rentals in the U.S. and Canada and is customized for each state or province, provides that:

[I]f the car is lost or damaged as a direct or indirect result of a violation of paragraph 14, or damaged as a result of an act of nature, you are responsible and you will pay us for all loss of or damage to the car regardless of cause, or who, or what caused it. If the car is damaged, you will pay our estimated repair cost, or if, in our sole discretion, we determine to sell the car in its damaged condition, you will pay the difference between the car’s retail fair market value before it was damaged and the sale proceeds … Where permitted by law, you authorize us to charge you for the actual cost of repair or replacement of lost or damaged items such as glass, mirrors, tires and antenna, as part of your rental charges at the time of return.

So Budget can basically charge you for any repairs it thinks it can attribute to you, including mud in the engine. While it would have been advisable to take photos of the car at the time you received it, you ordinarily should not have been expected to open the hood and photograph the engine.

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PurCo is a risk management company that handles “loss prevention” — chasing down and billing car rental agency customers damage and loss claims, genuine and false. It has suggested in its past advertising in trade magazines that car rental companies can turn damage claims into a profit center.

PurCo’s website has the following Q&A about damage claims:

Why am I responsible for damage I did not do?

Based on the risk of damages the rental agency asks the renter to sign a contract which holds them responsible for all loss or damage to the vehicle despite fault. The presumption is that the bailee of the property had a duty to keep the property safe and in the same condition in which they received it.

When the property is returned damaged, the presumption is that the damage occurred while the renter had the property.

The rental contract is not written to place an undue and unfounded burden on the renter, but rather to enforce the common law presumption that the bailee is responsible for all damage to the property in their care.

So neither Budget nor PurCo cares that you didn’t actually cause the mud to get in the engine of your car – just that they think it happened while the car was in your possession.

No, it isn’t fair, and no, it’s not good customer service.

You posted in our forum about your case. Our forum advocates suggested that you follow a course of action listed in a thread in the forum, in which you dispute the claim in writing and request various forms of documentation, including:

  • A copy of your original agreement and a copy of the paperwork given to you when you returned the car
  • Time-stamped and dated pictures of the damage
  • The rental agreements from the five people who rented the car before you and the five that rented if after (this will force them to look at the paperwork for anyone before or after who returned it after you that may have caused the damage)
  • A picture of the mileage indicator showing the mileage on the car when the damage was noted. (Compare it to the mileage when you turned the car in)
  • A copy of the fleet utilization log
  • A copy of the incident report
  • A copy of the receipt showing the car was repaired and the cost that was paid for the repair
  • A copy of the license plate number on the car to ensure it is the car you rented

Then you reached out to the Budget executives using the company contacts on our website, to ask for assistance. Had you taken photos of the car, you should have included these in your contact with the executives.

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You followed these instructions, and PurCo dropped the claim. Congratulations!

Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for Elliott.org. Read more of Jennifer's articles here.

  • mbods2002

    This may sound silly but I’m going to print this list off, just in case…. Thank you!

  • Anthony Paul Mannion

    That isn’t silly at all. That list is GREAT!

  • LeeAnneClark

    I’m renting from Budget next week. I now know I need to not only photograph the entire exterior of the car, including roof and undercarriage, but also the engine compartment.

    Damn I hate renting cars. Fills up the storage space on my iPhone.

  • jmj

    not sure if you’re joking, but I always inspect the front part of the undercarriage…basically do a pushup underneath the front bumper and check. I’ve had a couple friends who were burned on this part of the return inspection.

    Also, insist that they notate everything on the contract diagram, even if it’s smaller than their “bigger than this” circles and such. If that dent/nick/scratch gets bigger, it’ll be your fault.

  • Do other car rental companies have the contract given here? We need to know who to stay away from.

    And did Drew use his own insurance, or Budget’s? Had he used Budget’s, would these provision still apply?

  • LeeAnneClark

    Oh believe me I’m not joking. I’ve been photographing my rental cars both upon pick-up and drop-off for years. And it’s come in very handy. One time several years ago I was dropping off a rental car in Auckland, NZ when they accused me of causing some scratches on the trunk, and told me I couldn’t leave until I agreed to pay for the damage. I just laughed in their faces and pulled out my camera, and showed them several date-stamped photos of those exact same scratches on the car in the lot that I took on the day I picked it up. The manager got all red-faced and looked like he wanted to punch my lights out, but he just walked away.

    I’m just irked that they keep finding new ways to scam us. It used to be just exterior damage, so the smart renters started taking pics of our rental cars to protect ourselves. Then we started hearing of claims of scratches on the roof. So we all started taking pics of the roof. Then it was damage to the undercarriage – so now the smart renters are climbing UNDER cars to take photos of that. Now it’s the freaking engine compartment…so now we have to worry about “mud in the engine compartment”!

    Next thing you know they’re going to start charging us for emotional trauma that we supposedly inflicted on the vehicle while under our watch. At that point our camera phones won’t do us much good!

  • Steve Rabin

    and now on to the previous unsuspecting customer!

    What gets me about PurCo’s attempt at sounding humane about the whole thing in their description of why they think you are liable is the fact that the rental company has a responsibility to rent you a car in good working order. It is not up to you to check each nook and cranny for previous abuse–that is their responsibility. But it seems if they don’t do that, they will try to extract payment from you just because you were unlucky enough to be the next renter.

  • vmacd

    I go one better now and rather than taking a ton of photos, I just videotape the walk around with the agent and narrate the entire event including data and time, location, name of the agent, and description of any existing scratches, dents or other damage.

  • MarkKelling

    ALL rental car companies have similar wording in their contracts.

    Getting the rental company insurance used to make life simple – you just walked away and everything was covered. But not any more. Many have deductibles. Many have exclusions for specific types of damage. And ALL will refuse to cover anything they consider “deliberate” damage. Running the vehicle through mud and filling the engine compartment with it to the point the check engine light comes on would probably fall under that exclusion.

  • Tricia K

    I take video of the car before and after, including the license plate and the vin number. When we return it and they everything “looks good,” I try to record that as well, although they can get testy about being recorded, in which case I point the phone at the ground and keep recording.

  • joycexyz

    And don’t forget to take pix of the trunk. There was a case in these forums about a woman who was accused of spilling paint in the trunk of her rental! What will they think of next???

  • LeeAnneClark

    Oh right, thanks for the reminder! I remember that one. And we should probably snap photos of the interior, including inside the glove-box. I’m waiting for the article in which someone gets hit with a $500 “damage” fee for stains on the seat or something spilled in the glove box.

  • So since all cars break at some time, the unlucky renter who happens to be driving the car when it needs a new engine or transmission is now the stuckee?

    I will now go to whatever lengths it takes to never rent a car again. This is just their way of screwing all those people who spend the first hour of their rental day taking pictures of the car.

  • MarkKelling

    This has been going on forever, especially in Europe where it seems the rental companies there go out of their way to give manual transmission cars to Americans when the transmissions are about to go out — and then charge the American for the complete cost of the replacement when it does go out even if the car barely gets off the rental lot.

    I have not so far anyway been stuck with this type of scam. I rent a lot of cars and mostly from the same company. Does that “protect” me from scams? Not really, since I was hit with an attempt to bill me for damage twice at the same rental location with the same car on two separate rentals. I have had mechanical difficulties and was able to replace the car with a different one without further issues or attempts at repair charges. So there are some rental locations out there (probably corporate locations and not franchises) that treat their customers halfway decently.

  • I’m not referencing the Europe manual transmission scam in particular, but the general problem of mechanical breakdowns in a rental car. The industry standard was always that if you encountered a mechanical problem with your vehicle, the company would apologetically bring out a replacement as quickly as they could and get you on your way. There was no thought of charging you for the breakdown unless you were caught offroading, racing, taking the car out of specified bounds, or taking it into local specifically forbidden places like the Hana road on Maui. All of these violations would be obvious when the tow truck arrived.

    What has changed is that there now seems to be a movement to charge the current driver for a normal mechanical breakdown. Rental cars get driven a lot, and hard, and although rental companies don’t let them get very old mechanicals can happen. A renter has no way of pre-checking whether this is going to happen.

  • MarkKelling

    I agree. And the next thing they will probably try is charging the renter for an oil change if it became due while rented out.

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