When research associate Julie Thomason crashed her rental car, she was ready to face the repair bill, but was slammed with a $1,000 charge by the rental car company for "loss of use". Although this fee is legal, rental companies have been using loopholes to jack up their "loss of use" fees and scam customers into paying more.
Technically, according to Auto Slash, the loss of use fee is imposed by the car rental company on its customer to compensate the company for the car's inactivity during repair. This type of fee is charged, regardless of whether it was due to the customer's negligence, or an accident.
In addition, other administrative fees and miscellaneous fees added by the rental company in the event of car wreckage is added quickly adding up to the bill. Here are some tips in fighting against this unfair system.
1. Buy waivers from the rental car companies
Although expensive, the Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW), technically save you from the frightening experience of facing "loss of use fees" and other fees in the event of an accident or collision. The downside is that this is clearly another way car rental companies make money off their customers.
2. Check your own car insurance
In Julie's case, she quickly called her own car insurance company and asked whether they could provide insurance for this loss of use fee incurred while driving a rental car. Thankfully, despite many back and forth discussions, the case was settled thanks to Julie's insurance.
3. Check your State's rules
Besides the insurance policy you have, certain states mandate that personal auto insurance should cover car rental. These states include Alaska, Connecticut, Louisiana, Minnesota, New York, North Dakota, Rhode Island, and Texas.
4. Ask for documents and read them well
According to USA Today, you can take advantage of some car rental companies' weakness that is of keeping accurate rental records. Ask them to justify fees deemed unreasonable, especially administrative fees, insurance police fees (if you didn't pay for it), and other miscellaneous fees.
5. Check your Credit Card
Some credit cards provide protection from unreasonable fees if you use it to book your rental car. For example, American Express offers the Premium Car Rental Protection Package. At $24.95, the policy explicitly says that it can cover you for loss-of-use.
VISA offers an even better deal, which can cover users not only for collision and damage, but also for "reasonable" administrative and loss of use fees. It can also cover towing, and makes a clear record of fleet utilization log to help in dispute settlement with the rental company. All this is valid as long as the rental period is less than 15 days within the USA or less than 31 days outside of the USA.