Save on Car Rentals

published 30 June 2006

Driving will cost you more this summer than last, and not just because of higher gas prices. Car-rental rates are also on the rise. In early May, the daily rate for a midsize car was up more than $5 compared with 2005, according to the Abrams Travel Data Rate index.

As the summer travel season heats up and demand for cars increases, you could find yourself in the same predicament as Orrin Star. A folk-and-bluegrass performer, Star isn\'t exactly raking in the dough. After he booked a six-day tour of Indiana, Ohio and Kentucky music venues, Star compared car-rental rates and reserved a modestly priced, fuel-efficient compact from Dollar. But when he arrived at the rental counter in Indianapolis, Dollar was out of compacts. No economy cars, either.

Instead, Star was offered a choice: a slightly larger Dodge Stratus for an extra $8 a day or a Dodge Grand Caravan minivan at no extra charge. Star reluctantly chose the minivan and paid what he estimated to be $50 extra for gas.

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When he returned home to Cheverly, Md., he wrote a forceful letter to Dollar headquarters, in Tulsa, Okla., threatening to complain to the Federal Trade Commission and Indiana\'s consumer-protection office. He never had to follow through: Dollar refunded the $50.

Stand your ground. If the car-rental counter doesn\'t have the model you booked, it should offer the next-largest size at no extra charge. Sometimes an agent will try to tack on a fee for special features, such as a navigation system. Hold your ground for the price you reserved. Or, as a last resort, follow Star\'s lead: Accept the extra fee or gas-guzzler if necessary, and complain later.

Start your search for a rental at the major Internet travel sites, such as Expedia and Travelocity, which often negotiate special rates with high-profile rental companies. Then compare rates on the companies\' own sites. Search engines such as Kayak, Mobissimo and SideStep let you search many travel sites and providers at once.

Check prices both at the airport and at off-airport locations. Renting a midsize car at an airport costs nearly $8 per day more than renting the same car off-site, reports the Abrams index, largely because of airport fees. So it may pay to take a taxi to a downtown rental office.

If you\'re not wedded to a particular rental company, search for a low rate at Hotwire. At Priceline, try bidding even lower than the Hotwire rate. Neither Web site tells you which company you\'re renting from until you pay the bill, but both sites use national rental chains. With any Web site, be sure to compare total costs, not just the daily rate. Fees and taxes add substantially to the bottom line.

And book early, advises Neil Abrams, whose Abrams Consulting Group publishes the rental-car cost index. That way you lock in a rate and won\'t be shut out during peak travel times. You can always check for a better deal closer to your trip, reserve it and cancel the first booking. One good strategy is to book via a travel site as far in advance as you can, then check rates at Hotwire and Priceline closer to your trip. Rental companies use them for last-minute excess inventory, so the longer you wait, the better the rates.

Buy insurance? The standard advice is not to sign up for the collision damage waiver, which covers damage to the vehicle, or other high-profit insurance add-ons you don\'t need. Your own policy generally covers rental-car damage, and most gold and platinum credit cards pick up the deductible.

But before you decline the CDW, check for limits and exclusions on your auto policy and the credit-card coverage. Coverage limits of 15 to 30 days for each rental are typical. Credit cards often refuse to cover expensive sports cars and even SUVs. Some customers elect the CDW because they want to avoid the hassle of the claims process or they don\'t want an accident on their own record.

Rental companies provide liability insurance as part of the rental agreement, but usually at skimpy state minimums. For liability beyond the limit, your auto policy should kick in. Credit-card protection doesn\'t include liability, and neither does the CDW.

Mark was the editor of Kiplinger's Personal Finance magazine from July 2017 to June 2023. Prior to becoming editor, he was the Money and Living sections editor and, before that, the automotive writer. He has also been editor of Kiplinger.com as well as the magazine's managing editor, assistant managing editor and chief copy editor. Mark has also served as president of the Washington Automotive Press Association. In 1990 he was nominated for a National Magazine Award. Mark earned a B.A. from University of Virginia and an M.A. in Writing from Johns Hopkins University. Mark lives in Washington, D.C., with his wife, and they spend as much time as possible in their Glen Arbor, Mich., vacation home.