Car hire firms ripping off holidaymakers by charging up to £190 for a £30 insurance policy

24 May 2019
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Families jetting off this half term could find themselves forking up to £190 for car insurance policies worth just £30 when they arrive at their destination.

Car hire companies have been accused of ripping off customers by charging customers up to seven times the rate of basic car insurance for a week’s cover.

Research from travel comparison website TravelSupermarket found that some car hire rental companies are charging £190 for a policy that covers against damage and theft for eight days - 579% more than stand-alone policies available online.

TravelSupermarket says it is a “scandal” that car hire companies are charging these excessive amounts for excess waiver policies at the desk when people arrive to pick up their car.

Emma Coulthurst, consumer advocate at TravelSupermarket, says: “It is not an accident that these policies tend not to be able to be purchased on the car hire companies’ websites but have to be bought on arrival.

“The lack of transparency suggests that the companies are wanting you to not compare policies before your trip but be sold the policies at extortionate amounts, once you’ve arrived tired from your journey and are a captive audience.”

If you have an accident driving when you are abroad, you usually have to pay an excess towards the cost of the repair, which can be anything between £500 up to £2,000.

Excess waiver policies can reduce this amount to zero and are available online for as little as £3.49 per day.

TravelSupermarket compared the costs of insurance from the major car hire rental companies with the cheapest stand-alone policy online.

Cost of car insurance policies from car hire firms compared to standard policies
Airport pick up locationCar hire cost purchased from rental company websiteExcess waiver cost for eight daysSpecialist stand-alone policy for eight daysPrice difference
Faro, Portugal£385.23£120.13£27.96£92.17
Palma, Majorca£251.79£180£27.96£152.04
Malaga airport£264.83£180£27.96£152.04
Alicante£183.00£175.88£27.96£147.92
Dublin£406.34£136.26 £27.96£108.30
Lisbon£398.98£120.13£27.96£92.17
Pisa£267.54£139.76£27.96£111.80
Barcelona El Prat airport£253.47£189.93£27.96£161.97
Paphos Airport, Cyprus£195.16£174.68  £27.96£146.72
Source: Travelsupermarket, May 2019

It found that damage and theft excess cover at the Hertz pick-up desk for a Seat Leon would cost £189.93 to insure at Barcelona El Prat airport even though rental costs were £253.47. This is seven times as much a stand-alone policy at £27.96.

At Alicante airport in Spain, Avis charged £175.88 to insure the same car, £146.72 more than the specialist policy and nearly as much the £183 to hire it.

Cover with Budget at Palma airport in Majorca costs £180 for eight days’ cover, £152.04 more than a standard policy online.

The research also found that in every case the car hire companies charged extra for tyre and windscreen excess cover whereas the stand-alone policy included it.

An Avis Budget UK spokesperson says: “Customer service and transparency of fees is of paramount importance to us. We provide standard cover with all rentals, as well as the optional choice of additional cover that reduces excess and gives our customers peace of mind during the rental experience.

“Customers are always welcome to use their own providers if they so wish. In addition, for complete transparency, we encourage all customers to review items and charges highlighted in the contract before signing, and to ask our highly trained rental agents if they have any questions.”

Hertz has been contacted for comment.

Comments

In reply to by anonymous_stub (not verified)

This sort of scam on the unsuspecting and (if you have long-hauled) the overtired is clearly car-hire company policy. I had an example in the USA where the hire agreement and policy I had bought my daughter's family covered EVERYTHING. The agent still tried to up-sell my son-in-law and tried to keep me out of the conversation as I told him to refuse everything.These people LIE and cheat, and it is a scandal that they are allowed to prey on less knowledgeable renters in this way. On the other hand, low car hire rates probably reflect the fact that they get most of their profit through scamming?

In reply to by anonymous_stub (not verified)

And you think it's the only sin of rental companies? Try not to get insurance with them and will find damage on your car and charge you 10 time than rental cost. Some of them are already investigated by authorities in a few countries.

In reply to by anonymous_stub (not verified)

The situation is even worse than you suggest. You can get an annual excess policy for about £40 which usually works out cheaper still.I have been almost 'threatened' by one or two car hire companies in Malaga insisting that the annual policy that I have is not worth the paper it is written on. They also claimed the same when I bought a more expensive policy from the car hire broker.The situation is a scandal.

In reply to by anonymous_stub (not verified)

We paid €80.00 more to have the damage waiver put on our plan with a car hire company in Corfu.total cost was €280 though which I thought was quite high for 8 ldays

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