Can a car rental company double my rate because I’m not American?

Photo of author

By Christopher Elliott

There’s something funny going on with car rental prices, and Hal Gordon wants answers.

Here’s what happened to him: A few weeks ago, he checked rental rates through the Avis website for a friend, who was flying to New York from Israel.

“The website said there were no vehicles available for the dates chosen,” he says. “I checked for other countries in the Middle East — same result. However, for UK or Venezuela — no problem. Vehicles were available.”

Gordon visited a few other sites, including Hertz.

“They doubled the price for foreign nationals,” he says. “What’s going on here?”

Good question. To find out, I first checked the Avis site, running a query for a rental from JFK in early March. I identified myself as a resident of Israel in the first search, and the site offered me a rate of $59 a day. Not bad for a set of wheels in the Big Apple.

Then I tried the same query as an American. The rate? Almost $20 per day higher — $78.

Hmm. Jacking up the rate by $20 because I’m American? Refusing to rent a car to someone from the Middle East? Sounds ridiculous.

battleface delivers insurance that doesn’t quit when circumstances change. We provide specialty travel insurance services and benefits to travelers visiting or working internationally, including in the world’s most hard to reach places. Currently selling in 54 countries and growing, our mission is to deliver simple solutions to travelers worldwide heading out on their next adventure.

What’s up with these prices?

What’s going on with rental car prices? “Car rental pricing is market-driven and very dynamic,” says Alice Pereira, a spokeswoman for Avis. “Many factors determine price, including level of demand, cost of service, currency exchange rates, and the competitive environment. Travel companies may offer promotional rates to take advantage of growing markets. Or other fluctuations in demand, or simply to respond to competitive pricing.” (Here’s our ultimate guide to renting a car.)

In other words, car rental companies have the right to change their price based on who you are. And they frequently do.

So what determines the rate you pay? Avis states that foreign travelers may incur required charges for damage and liability coverages, depending on the driver’s nationality and the currency exchange rate, which may either include or exclude these costs in some countries.

Hertz agreed, calling these dynamic rates a “standard travel industry practice.”

“The competitive influences in each source market typically pattern the resulting non-resident rates and promotions to be among the lowest available in the destination markets,” says Paula Rivera, a Hertz spokeswoman. “However, there is no guarantee that this will always be the case and there may be instances whereby local promotions are offered to residents at lower rate levels.”

Gordon doesn’t buy it

He calls these practices “discriminatory” — which they certainly are.

In some business settings, changing a price based on who you are, or refusing to sell you a product, would be discriminatory, if not illegal.

But “dynamic” pricing is creeping into our lives beyond the travel industry. Remember your last trip to the grocery store? Maybe they offered a special price based on your “club” membership in the grocery store’s loyalty program, or a two-for-one offer — members only.

It’s every revenue manager’s fantasy to be able to charge a price that’s based on who you are, and what you’re willing to pay, and believe me, that day is coming.

I’m not surprised at any of these answers, although I’m a little taken aback that any company would refused to rent a car to anyone based on their nationality. I tried to duplicate that result on the site, but couldn’t.

None of the car rental companies my advocacy team and I spoke with would answer the allegation that they stopped certain travelers from renting their cars. Although that isn’t necessarily illegal. Just try to rent a car if you’re under 25 or have a questionable DMV record. Your rental company might tell you it’s “out” of cars, too, or turn you down flat.

The real question is: Should that kind of discrimination — er, I mean, dynamic pricing — be allowed here in the United States, a country that takes great pride in its egalitarian values?

Should we draw the line somewhere — and if so, where?

Photo of author

Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter.

Related Posts