EU’s new rental car rules could be signpost for US

If you rent a car in Europe this summer, you might notice a few changes. Pay attention to them. They could be coming to America soon.

Rental prices now include every mandatory fee. Optional extras and insurance are more clearly explained in plain language. There’s also a new, more streamlined pre-rental vehicle inspection process, to prevent erroneous damage claims.

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These upgrades are part of a voluntary agreement between the European Union and five car rental companies operating in the 28-nation bloc, and the possible precursor to more formal, Europe-wide regulation of rental cars. And while that may not affect you unless you’re headed to Europe, it could set off a wave of car rental industry regulation that could soon reach our shores.

“Once the regulators are let loose, anything can happen,” says Charles Abelsohn, an attorney who has been watching Europe’s journey toward car rental regulation. “And it usually does.”

What’s behind the changes, and what do they mean? Last year, European regulators received about 2,000 complaints about rental cars through its European Consumer Centres, which help consumers when they travel or buy cross-border. That’s about twice as many as they got in 2010, leading the European Commission and national consumer authorities to approach the five leading car rental agencies for a fix.

The result were voluntary measures undertaken by Avis, Europcar, Enterprise, Hertz and Sixt. Car rental companies also agreed to revise their processes for damage claims. They’ve added what the EU calls a “clear procedure” for vehicle inspection, under which customers will receive reasons and evidence of any damage, before the payment is taken. The companies also gave their assurance that the damage claims process would be fair, with a procedure to challenge any damage before paying for it.

“Any time car rental companies can get together with regulators and agree upon guidelines that govern the entire industry — as opposed to a patchwork of individual rules, company by company — that’s a win for the consumer,” says Chris Brown, the executive editor of Auto Rental News, a trade publication.

But it’s not a complete win. For starters, the agreement covers only a handful of car rental companies. Brown says in order for it to really work, it will need to extend to third-party sites that sell rental cars, such as travel agents. Unless they, too, quote an all-inclusive rate and disclose insurance and optional amenities, the voluntary agreement might be flawed.

Question is: Do we need something like this here? Ask consumers like Ellen Panther, who rented a car for a ski trip with her friends in Vail, Colo., and the answer is yes. She found an inexpensive rental car for $196 a week through

“When I arrived to the rental car counter, a sales representative immediately began trying to upsell me by convincing me that it is in the interest of my safety to rent an all-wheel-drive vehicle, not mentioning that it would cost me more,” says Panther, a communications consultant from Chicago. “When I agreed to her recommendation on that and purchased insurance for the week, my total came to over $600.”

Panther refused, asking for her original reservation. Once taxes and fees were added, the a week in a smaller Kia Soul still cost a little over $500.

How to avoid fees on your rental car

“I definitely feel it is important for rental car companies to be more transparent in their quoting process and develop more ethical sales tactics for their representatives,” she says. “It’s a shame that this is happening across the U.S. with no repercussions or regulations.”

In the United States, car rental companies are regulated at the state level. They must comply with certain federal laws, particularly when it comes to pricing, but those statutes are not exclusive to the industry. The greatest effect on car rental company pricing may be market pressure.

“Over the years, due to the competitive nature of the major rental brands along with bad PR as a result of business practices which were opaque to renters, the rental booking process has become more transparent and understandable on its own,” says Neil Abrams, a car rental consultant based in Purchase, N.Y. At the moment, market forces have created a system in the United States that essentially requires full disclosure and explanations of fees, surcharges and taxes, he adds.

For now, talk of regulating car rentals in the EU and here is exactly that: talk.

European authorities will “continue to monitor the car rental market closely,” and if the voluntary steps don’t work, they could create regulations similar to EU 261. That’s the European airline consumer protection regulation establishing common rules on compensation and assistance to passengers in the event of denied boarding of canceled or delayed flights.

The effects of the EU measures haven’t really been felt by motorists yet. Jonathan Weinberg, the cofounder of the car rental website, says it’s too early to tell if the voluntary steps will have any effect, or if they’ll spread to other countries.

“As it currently stands,” he adds, “it seems like the EU measures lack both teeth and widespread adoption.”

What the EU is doing for car rental customers

Five car rental companies — Avis, Europcar, Enterprise, Hertz and Sixt — have agreed to take voluntary steps toward improving price transparency, insurance disclosure and fuel options. They include:

• Clear pricing. The total booking price will now include all “unavoidable” charges, including airport fees, taxes, and any mandatory equipment such as winter tires. All such charges must be included in the “headline” price, according to the EU.

• “Plain language” contracts. Drivers will be told what their rental does and doesn’t include. Disclosure covers amenities, mileage, fuel policy, cancellation policy and deposit requirements.

• Insurance and other extras. Customers will also receive information about any available extras, including insurance. They’ll be told what a waiver covers and what it doesn’t before they decide to buy insurance.

• Transparent fuel policies. Drivers will be always given the option to get the car with a full tank and bring it back full.

21 thoughts on “EU’s new rental car rules could be signpost for US

  1. So I see they added pre-rental inspection guidelines but what about post rental inspections? If you’re only inspecting the car before rentals then what’s to stop a car rental company from charging the previous renter for damage that occurs to a vehicle after it’s been returned? Sounds like an intentional hole in the system to leave the last renter responsible.

  2. will they do a pre-rental inspection clutch inspection with an maniac? or just the low wage lot rep that does as long as it moves = 100% working fine?

    What about where and tear stuff?

    define unpaved road vs off road? so they can pull an you where on route 2 ( a major road) that was under constriction with rough grooved surface so in our book that is an unpaved road so you are not covered.

    They should add you you bill for damage then you must get it fixed. Also limit lost of use fees.

      1. yes mechanic. Also add a new that the car must make it off the lot. there was an cases where the car died backing out the sport and the renter was forced to pay for the repair. Even when it was do to older issues.

  3. I look at these points, and I don’t see much in the way of difference vs. how it’s done here. When I look at the Hertz website, I see the total price, including all required fees. Additional fees and insurance are clearly laid out. Fuel option is very clear as well.

  4. Will we see anything regarding rental cars like this in the US? Not under the current administration.

    This type of regulation is seen as anti-business because it can reduce the profit the companies get from screwing the customer. The car rental companies will be definitely lobbying against it in the case it does come up

    Hertz tried something that would help prove pre-existing damage – their photo cage where the rental car was driven through at the exit gate and pictures from every angle were taken and the same on return. Hertz claimed the customers didn’t like it. I feel Hertz didn’t like it because it helped proved the condition of the vehicle removing the ability for them to charge over and over for the same damage.

  5. Why don’t Americans who don’t like fees being added to rental cars and hotels complain as loudly about what happens every day, which is in stores where the price on the shelves is not the price paid at checkout (because of taxes)? When I first visited, before I became a citizen, this was one of the most annoying things for me when it comes to pricing. In most countries the price you pay is the price you see.

    1. Not including sales tax in shelf and advertised US pricing is intentional. Anti-tax politicians pass laws forbidding the listing of tax-included prices in order to keep the voters upset about paying taxes so they will want to vote in favor of the “No New Taxes” party. So we get ticked off at paying 7% while Europeans painlessly pay hidden VAT at much higher rates. Politicians are such wonderful people.

      1. So why did they make airlines display all inclusive fares then? I am glad that they did but it seems inconsistent.

        1. Sales taxes annoy voters multiple times a day. Airline flights hardly ever happen to the ordinary person. Also, airfare taxes are very high compared to sale taxes.

        2. The taxes you pay on products at your local stores are local taxes. VAT is a national tax. Airline taxes are controlled (mostly) at the national level so they are included like VAT.

        3. Airfare is not subject to typical local taxes. Most of the taxes/fees are fixed amounts. Or a simple % based on the base fare. It will be easy to compare airfare costs for a flight to a specific airport.

          Only the passenger facility charge varies. This is the only “local” tax that can be added. It is also capped by the FAA and subject to various restrictions.

      2. A VAT system would not work in the US unless you could get every political entity and sub-entity to agree to a single number.

        If I wanted to by a $.99 2-liter soda/pop, what would be the advertised price? I might pay anywhere from $.99 – $1.25 (or more) depending on where I shop. Each city, county, and state can add to the total. All sorts of food types can have different rules. Soda-pop taxes are now all the rage. Milk is taxes lower. Prepared foods are taxed higher. If you are paying for your food with SNAP eligible benefits (aka food stamps), the purchase is tax exempt.

        My media market covers three states. No possible way you can advertise an accurate price for any item unless you remove all taxing decisions at the local level and move it to the federal level. Never going to happen.

        1. Everywhere I have lived in the US groceries are not taxed. This includes things like milk, bread, canned goods, large bottles of water, and so on. Candy, sodas, ready to eat hot food and so on are taxed. The strangest rule I have ever seen is in Texas where if you include a fork in cut watermelon when it gets wrapped, it is taxable, otherwise not.

          Yes, a these strange rules make it impossible to advertise the tax included price. But you get used to it after a while.

  6. There’s a general rule: If ‘industry’ doesn’t come up with good rules to constrain its behavior, then the legislatures will eventually do it for that industry, and the industry won’t like the results.

    We’re seeing this play out in travel industries, where their outrageous behaviors and unwillingness to change those behaviors has finally attracted the attention of Congress.

      1. Congress pays attention — if enough of their family members are inconvenienced. I would bet most of the pro consumer rules, laws, and regulations that have been enacted in recent history are because some Senator’s mom was impacted and she let him know about it. 🙂

  7. U.S.A. ?…use Enterprise, they screw themselves. My sister worked as a gate agent for them and they (Enterprise) basically let renters call the shots. She finally quit when every other car going out of the airport rental facility was three levels above what the passenger reserved. People would be renting the cheapest car, were pointed by the lazy floor agents “over there” to pick out a car. Of course they would drive off in Audi’s, Cadillacs and all the high end vehicles. When the gate agents objected or pointed that out, they were yelled at and accused of not being helpful, etc, etc., No amount of intervention by “managers” could reverse the error. The managers just shrugged and let it happen.

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