The tricks they play at the car rental counter

Ask George Mayo about car insurance, and he’ll tell you that his State Farm policy covers rentals. He’s certain of it. And he’s also certain that when he rented a car from Avis in Nashville recently, he declined the optional insurance.

Insurance isn’t required by law when you rent a vehicle in the United States, but it’s a good idea. That’s because you don’t want to pay $30,000 for a new car if you’re in an accident, or even a few hundred bucks for a fender bender.

Car rental companies have an incentive to not only sell you their optional Loss Damage Waiver (LDW) and Collision Damage Waiver (CDW) products, which can be highly profitable, but to oversell it. To that effect, they often incentivize their agents to push these extras, which can double the cost of your car rental, to gullible customers who may already be covered.

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And sometimes, they go too far.

Mayo believes the agents in Nashville “tricked” him into signing a contract to buy the extra insurance.

“The agent tried to get me to purchase liability insurance,” he remembers. “I explained that I already had liability insurance through my State Farm policy and showed him the copy of rental agreement from the Internet where I declined all auto insurance. The agent had me sign a piece of paper indicating that I refused the Avis insurance.”

When he returned the car, he found an additional $251 for the full insurance package — which he’d declined — on his final bill. Apparently the form he thought he was signing, verifying he was turning down the insurance, was actually a form accepting the collision-damage policy.

“I complained, but was told that I had signed an agreement to purchase the full Avis insurance package at the rental counter,” he says.

After some haggling, Avis agreed to cut his bill in half. But Mayo was still upset, so he contacted me. I asked to see a copy of his rental agreement, but he didn’t keep it. The agreement would have shown exactly what he’d accepted.

Mayo asked Avis to send him a copy of the rental agreement, and it mailed him an empty envelope.

I refer to this as the “sign here” scam. You ask a company for something verbally, and it then slides a rental agreement under your nose that has you paying for something else. In the old days, when car rental companies used cheap line printers to generate contracts, you could hardly read what you were signing, which led to all kinds of confusion — the kind of confusion car rental companies were frequently accused of taking advantage of.

Another common trick — and this applies to Americans traveling overseas — is the foreign-language contract. Your really don’t know what you’re agreeing to, and the rental agent knows it. (Always ask for a translation to avoid this problem.)

But mostly, the scam perpetuates itself because customers don’t read the rental agreement they sign. Had Mayo reviewed the paperwork, he might have avoided this whole unpleasantness.

Fortunately, he had filled out an online form specifically declining the insurance, and could show Avis proof that he was already covered. I contacted the car rental company on his behalf, and it agreed to refund his $251.

“In the future I will have to look closely at what I sign and not take the word of the rental agent as to what I am signing,” he told me.

I can’t blame rental companies for making sure their cars are covered, nor can I fault them for trying to earn a profit. But sometimes I wonder if they’re trying too hard.

(Photo: fint/Flickr)

47 thoughts on “The tricks they play at the car rental counter

  1. One option is American Express ‘premium’ car rental insurance.  Basically, it’s $17.95 flat rate for up to 40 days of consecutive rental.  The great thing is that it is PRIMARY insurance, not secondary and there’s no deductible.  The bad thing is once you add it to your card, it’s automatically charged each time you rent a car with that card.

    I wonder how many car rental agencies want to tangle with Amex over those bogus dings, scratches and other questionable claims?  It’s good in other countries too!

    1. That $17.95 rate is only for residents of CA. The rate for the rest of the USA is $24.95 for $100,000 or $19.95 for $75,000. The other problem is if you have several Amex cards, they automatically apply the coverage to all of them. I just use a Visa in the USA and Amex when renting outside the USA. It is a good deal as it is only a one time fee, not per day. There are a few countries where coverage is excluded. 

      1.  The AMEX rental insurance seems to be hit or miss for me, sometimes being charged and other times not.  One time, the fee was charged when I prepaid for a rental, and when the actual rental cost was slightly lower and the agency issued a small refund, AMEX also credited the entire $24.95 fee.   Haven’t had to file a claim so far so AMEX is winning on this bet.

  2. Technically speaking, car rental companies do not sell insurance at all. They call damage waivers. For a fee, they agree to not hold you responsible for some potential liability. But, it is not insurance and, in fact, in most of the US they cannot possibly sell insurance because they are not licensed as insurance companies. 

  3. I know Chris isn’t a fan of loyalty programs, but joining the car rental loyalty program is a no brainer.  One of the biggest perks is that you bypass the rental desk where the hard sell occurs.  And to get this benefit you generally don’t even need to achieve an elite status, i.e. no golden handcuffs like with hotels and airlines.  You fill out on online form, decline coverage, and you’re done.

    1. I’ll second that. I belong to all the major car rental programs. I love getting in the express line, bypassing everyone else, and hearing the upsell on the damage waivers on the other customers. My contract is pre-filled with my declines and never am asked if I want to purchase more. I’m usually in and out in no time. 

      1.  Third. I regularly rent from Thrifty with no problems through their Blue Chip card. My one Dollar experience (same company) forced me to the regular counter where I got the hard sell and run around from the agent. Loyalty card makes all the difference.

    2. Good point, I haven’t spoken to an agent in over a year with Avis.  I show up, my name is on a board with the stall number, the keys are already in the car, I just show my ID to the guard on my way out.  In fact, since joining with Avis, I haven’t even had to fill out the car damage report, and they haven’t ever tried to charge me. Except at LGA.
      Sadly, I have to go through all the shenanigans with Hertz and Enterprise still, even after joining.  It’s funny because up until 2 years ago I hated Avis and loved Hertz.  Avis was always awful, then I signed up for their program and they have been great.  Hertz was better before I signed up for their program and now they seem to treat me horribly.  The last two times I rented from Hertz, they tried to sell me insurance despite me being in their Gold program.  Then one time they charged me for a full talk of gas after the fact, even though I had purchased a full tank before returning it.  I kept the Hertz receipt and the gas receipt and got them to credit me back.  Then another time the car engine died an hour after leaving the lot, and Hertz refused to tow it back or replace it.  I had AAA at the time and they towed the car back to Hertz and I rented locally.  I never heard back, and was still charged the regular rental rate. I disputed it and won fortunately.
      Avis at LGA is always horrible, even still after signing up for the preferred program.  They still make me meet with an agent and try to sell insurance and always give me down grades and cars that smell like smoke.

        1. The Hertz that charged me for gas was in HNL, and the one with the broken car was in IND.  It could be location specific, but it was those two incidents in a row that switched me back to Avis.  Mine you Avis in LGA I mentioned is always bad, and Avis in MSN was also pretty bad.  MSN makes me talk to a person first and tries the hard sell and then is nasty at the return.

          1. I have no real status with Hertz, other than being a basic member. On several occasions I did not have a car assigned to me and had to wait in line…overhearing how they were sold out to everyone in fron of me…but I always ended up with a car.

    3. I agree completely. I use Thrifty for most of my rentals, and belong to their Blue Chip program. I bypass all the lines, and pick up the car directly at the lot. The contract is pre-filled to decline all insurance, and return the car with fuel tank full. My company specifically directs us to decline all CDW and LDW, since we have a company insurance policy that covers rental vehicles (in the US, only).

  4. A few times over the past year I’ve had an agent ask me what my deductible was. I’ve always refused to tell them. To me, this is part of the scam. I rent the car, and when it is returned, there will magically be some kind of damage on it in some obscure place for just under the amount of my deductible.

    1. While I agree that your deductible is none of their business, maybe the solution is to respond that your deductible is $0. 🙂

    2. with today’s auto insurance giving good drivers perks like “vanishing deductibles” you can tell the agent that you don’t have a deductible on your insurance…let them try to pull that one off with bogus repair charges that are exactly your deductible!

  5. I had to vote no. The insurance is a big money maker for them. It only makes sense that they would try to sell it. Once again, read what you sign. I know that it is not a popular position to take but if you do not read what you sign why are you surprised afterwards? Another expensive learning experience.

  6. For rentals in the US we use our basic car insurance and then if there’s damage get the deductible reimbursed through American Express’s Platinum card.
    In Italy last year, though, I took the Italian all-inclusive coverage from Hertz and was glad I did. When I returned it I watched as they went under every returned car looking for any damage they could find underneath. When I showed them I had purchased an “all damages” plan they didn’t bother to look at mine. I’ll bet you the next guy who rented that car will have to pay for small undercarriage damages he didn’t even know existed. And the rental agencies here tell you they have no control over their foreign affiliates.
    Who ever thinks to look under a car when you rent it? Overseas especially, it’s good to photograph your car in the rental garage before you leave.

  7. When did “No” stop meaning “No”?  What this rental agent did, in telling the renter one thing while sliding the form out for signature with another thing, is illegal – completely and totally.

    Shouldn’t the OP also be getting the police involved.

  8. I literally hate the process of renting a car. You always have to be on your guard and when you have just come off of a long flight that’s difficult to do. I’m not saying all rental car agents are snakes, just most of them.  The best comparison is in the days of sitting down with the time share salesperson for the required hour to get your free gift that never turns out to be worth your loss of time.

  9. We rent cars frequently, probably once or twice per month, and I can say I have rarely in the past few years been harassed to buy the optional insurance.  Occasionally I hear would you like insurance and then the agent will take a single “no” for an answer. 

    Then again, we belong to a handful of frequent renter programs for Dollar, Hertz, and Avis, and that might be the reason we are not being given the hard sell.

  10. While I, too, belong to the frequent renter programs of the companies I use (and I’m not anything remotely qualifying as a frequent renter!), so I usually don’t have to go to the counter (some locations still require it).  As far as I’m concerned, once I say “no,” any further attempts to sell me something are pushing.  No means no — period!

  11. I think some rental companies are absolutely trying too hard. Doing something like Avis did to this customer (and I absolutely believe that the employee heard him say he didn’t want the insurance, understood him, and deliberately deceived him into signing the form) goes beyond a hard sell and constitutes fraud.

    That said, my personal experience has been different. On the 1-2 occasions per year I rent a car for personal use, I always buy the damage waiver. (Our car insurance covers rentals only up to the value of the car we have full coverage on, which would leave us open to paying thousands of dollars out of pocket if we totaled a rental, and the peace of mind of not relying on credit card coverage is worth it to me). Recently at Enterprise, I was signing the paperwork in the parking lot and the employee actually told me to cross out or write declined (I don’t remember which) next to the extra products I didn’t want. He didn’t even try to sell me on the damage waiver, and I actually had to bring it up.

    The funny thing is that the only times I’ve been asked repeatedly if I was sure I wanted to decline the coverage was when I was renting for business, where my company has insurance that covers rental cars and we’re explicitly told not to buy the waiver.

  12. A similar thing happened to me at an Enterprise location near my home. My husband and I were getting a rental car while our car was being repaired. State Farm was paying for our rental (our car was in a bad accident) and they tried to sell us everything under the sun. Sure enough, despite the fact that we both declined the damage waiver several times, they handed us a contract to sign including the most expensive option. When I pointed it out, they pretended they made a “mistake” and gave us a hard sell again. It seriously took us at least a half an hour to pick up a car where everything was prearranged and State Farm had set it all up. They did not want us to leave without selling us everything under the sun.  

  13. I rented a car in Maui last year from Dollar Car Rental and I was bullied into buying the insurance. I told them no several times!!   It’s the first time I’ve ever purchased insurance.  I had prebooked online and declined the insurance. They said that all parking spots are narrow in Maui so the car WILL get door dings.  Then they went on to say that they didn’t know how things were done in the states but we wouldn’t be allowed to leave Hawaii if the car was damaged and we didn’t have the cash to pay it.

  14. Poor poor guy. Did it himself and messed it up himself. I don’t feel so sorry. But in answer to your question about pushing insurance, yes the car companies push ethe waivers, but they have 100’s of $30000.00-$75000.00 cars to rent and they always get the same answer – I did not do that!

  15. Read the conract!!  This is not about insurance but about another incident in which reading the contract saved us a bundle and probably saved us from an arrest for car theft.  We reserved a compact car for one week  last year in Colorado.  At the counter we were told they could give us an even better deal – an SUV for ten dollars less than our compact car reservation.  There was a snow storm so we were elated to get an SUV for less.  We loaded our gear, then took a look at our contract.  It was in someone else’s name and only for two days.  We would have been driving around for a week and they would probably have sent someone looking for us after two days and possibly charged us the much higher SUV rate if we had missed the error and left the rental place.  As it turned out they argued with us for over an hour about our reservation but finally decided to give us use of the SUV for only ten dollars more than our original reservations.  So read your contracts.  This might have just been their mistake or it could have been deliberate to have us pay for the use of a more expensive rental. 

  16. As I read these postings I remind myself that 98% of the car rental people are giving the remaining 2% a bad name.
    If we were treated so dishonestly by any retailer of products, we’d all vote with our feet and find another place to do business… but on this and other postings we hear bad stories about all the major car rental agencies. 
    Thanks for all the good advice.  Sadly many of the protective strategies are a form of surrender, i.e. “in Europe, take the full insurance with no deductible,” which, of course, is exactly what the renter wants us to do… and from which them maximize their profit.
    Joining the various clubs and bypassing signing in at the desk saves time, but doesn’t give you the opportunity to complain if there is a scratch here and there.  Likewise, leaving the car by putting the paperwork and keys in a box and running off gives the crooked people an opportunity to claim there were dents.  By that time you’re thousands of miles away.
    It’s a shame to have to take dated pictures of the car before you drive away and are required to have “eyes in the back of your head” while on vacation. 

    1. “Joining the various clubs and bypassing signing in at the desk saves time, but doesn’t give you the opportunity to complain if there is a scratch here and there.”

      Sure it does.  There is nothing preventing you from walking back inside to complain about the car

  17. I’ve been a Hertz #1 Club Gold member for many years.  At the larger U.S. airports I never have to speak to an agent, just pick up the car from an assigned parking spot.  At smaller airports I do have to go to the Hertz desk to get the key, but have never been asked if I wanted the CDW (which I’ve declined in my online Profile).

    Occasionally I rent from Avis or one of the other major companies.  None have ever pressed me to purchase CDW.

    I Europe, I’ve always taken all of the offered optional “insurance” regardless of which rental company I’ve used.

  18. I guess expecting someone to read what they sign is simply out of the question.  Pay attention people.  It really isnt that hard.

  19. I don’t know about anyone else, but the more I read these types of stories, the more I’m tempted to pay for all the extra coverage on my next rental, call my insurance company and cancel my primary insurance for the duration of the rental period, then ram into another rental car when I’m pulling back into the lot!  Might as well get my money’s worth….

  20. A warning to any Brits travelling to the States to watch for unscrupulous car rental companies. Thanks for the article.

  21. I voted yes, as a knee jerk perhaps, but Hertz in the past five rentals has not even mentioned insurance to me.  My Gold membership specifies no Hertz insurances, and that is the way it is.

    1. I rent about once a month and almost always through Priceline, saving 40%-60%. My normal insurance (AAA) covers rentals but not the deductible. I think the American Express coverage sounds perfect.

  22. Just a quick FYI, if you plan to rent a car over two weeks, check the fine print on your own insurance. Some companies will not even cover the two weeks if you don’t notify them. Read the fine print on all documents!

  23. When making a reservation, be sure to provide the name of the state entity of which you’re employed and the state entity or Complete Rent a Car contract rate identifier number. Upon completion of the reservation, be sure to verify the rates and get a confirmation number. When picking up the vehicle, give the rental agent the confirmation number and, again, provide the name of the state entity of which you’re employed and the state agency or Complete Rent a Car contract rate identifier number.

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