Traveler VC rented a car in Europe through AutoEurope, supplied by Europcar. As other writers and I have long advocated, he relied on credit card collision coverage rather than paying the rental company's outrageously overpriced collision damage waiver (CDW). Because he declined the CDW, the rental agent had him sign a credit card chit for 400 euros (about $500) as a "hold" against possible damage.
Unfortunately, VC ran into a curb on his way to his departure airport and ruined a tire, and the car had no spare. Europcar had the car towed, and VC got a cab to the airport and departed. Europcar processed the 400 euro chit the day it received the car, and added another $45 "premium station" charge. Once home, VC submitted a claim to his credit card company, which, after several weeks, emailed him that it was "temporarily closing" the case file because Europcar had not yet provided the requested paperwork. When VC asked "what now?" a credit card representative suggested that he immediately dispute the 400 euro hold charge. That's where it stands. VC knows he caused damage, but so far he has no idea yet of the total amount or how much the credit card coverage will cover.
-- When you don't buy CDW, you can expect to be asked to sign a "hold" for $400 to $500 against a possible damage claim.
-- If you encounter any damage, the rental company will either run the "hold" charge immediately or demand "full" damage payment up front, leaving you to sort out the actual dollars with your credit card or personal insurance later.
Over the years, the rental companies have been in an ongoing tug-of-war with consumers to try to force them to buy CDW at outrageous rates rather than rely on their personal insurance or credit cards. The rental companies keep inventing new fees or charges they hope the credit cards will not cover: loss-of-use fees, administrative fees, and loss of value fees, but -- so far -- the credit card companies have kept up to date. It's clear to see why the rental companies try to force you into CDW: They charge up to $35 a day, often more than the base daily rental rate and several times the actuarial risk. Third-party agencies, including some online travel agencies and at least one independent, Protect Your Bubble (protectyourbubble.com), sell comparable insurance for $8 to $11 a day, and you can bet those prices include plenty of profit.
Clearly, if any resulting claim is not addressed quickly, dispute the hold charge as soon as it appears on your credit card billing. Also -- and this isn't universal among travel writers and consumer advocates -- if at all possible, find primary credit-card coverage. Secondary coverage means that, on domestic rentals, the credit card or other insurance covers only what you can't first recover from your own auto insurance. That can greatly add to the hassle and complexity, and it may require a big initial out-of-pocket payment. AmEx Platinum cards and all Diners Club cards provide primary insurance; you can convert secondary to primary on other AmEx cards by paying a $25 per-rental fee, and those third-party programs are primary.
Gotcha 2: Inconsistent "premium station" charges in Europe.
In some countries, rental companies add a premium station charge to any rental that begins at an airport or rail station. The charge varies by country; it can be as high as 15 percent to 20 percent of the entire rental, including VAT, in Austria, the Netherlands, and Switzerland, or a flat fee up to 55 euros in France and Belgium. But that's not the gotcha; I've covered it before. The gotcha is that some online travel agencies, including AutoEurope, include those charges on some price displays but exclude it on others, depending on the rental company. Obviously, this disparity seriously compromises the value of the price-comparison tables. A quote of, say, 300 euros from Hertz, which does include the fee, might actually be a better deal than a quote of 280 from Europcar, which does not. Obviously, you have to check the fine print before you decide.
(Send e-mail to Ed Perkins at email@example.com. Perkins' new book for small business and independent professionals, "Business Travel When It's Your Money," is now available through http://www.mybusinesstravel.com or http://www.amazon.com)