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Renting a car? Beware of all the hidden fees

The list is nearly endless, and often punitive.

A month ago, colleague Larry Claasen warned readers of this site not to hire a car. Try literally any alternative, he urged. His is a cautionary tale of the near-ruinous costs for damage allegedly incurred while he was renting a vehicle.

Read: Car renter, beware!

There are scenarios, however, when hiring a car is unavoidable. It could very likely be cheaper than Uber or other ride-hailing services, more convenient than some alternatives like arranging lifts, and sometimes – as when travelling outside of a main city – it is the only option.

Putting aside the financial risks involved, no matter which super-duper waiver option you pay for, there is an ever-increasing number of charges that are not made clear to you, the renter, until you’re standing at the rental kiosk, initialling your life away.

Document fee

The first of these is the document or contract fee. Some rental companies charge this in the total rate quoted. Others itemise it separately as a fee due at pick-up. A quick comparison among the majors shows this fee to be anything from R61 to R99 per contract. On a short-term rental, this amount is significant (it could add another 50% to the rental!). 

The rental companies ‘explain’ that it is a legal requirement for them to “store documents for a period of five years and the cost of administering, storing and retrieving documents necessitates an amount be charged per rental contract”. At this price per contract, I’m surprised Metrofile isn’t worth R10 billion instead of the just under R1 billion currently.

Refuelling fee

The charge to refuel vehicles is fairly well-understood, which is why many renters choose to make the quick pitstop at the nearest petrol station precisely to avoid it (Hellopeter is littered with stories of these fees being levied despite tanks being full). These ‘service’ fees are generally around R20 or R30, if the vehicle requires refuelling. At least one rental company charges this fee only if the vehicle requires more than R50 in fuel.

Another one of the majors now charges a mandatory refuelling charge of R41 per contract, regardless of whether the vehicle actually needs to be refuelled. Imagine my horror when I was asked to initial alongside this earlier this week. There is no reference to this at all in its standard and outdated terms and conditions, which makes this fee legally questionable. Contrast this with its operations in countries where proof of refuelling (a receipt) at drop-off is all that’s required to avoid any nasty fees.

Toll fee admin fee

Travel through any toll gates? Rental vehicles at all the majors are fitted with e-tags so these tolls are automatically added to your bill (deducted from your deposit). But not before the rental companies levy an e-toll admin fee (generally 20%). In Gauteng, the rental companies benefit from the R276 per month cap per car (they bizarrely elect to apply this cap to each rental agreement). And some still specify the old R450 cap. 

Traffic fine admin fee

Watch your speed, because the traffic fine administration charge levied on all fines (around R300) is more often than not higher than the fine itself!

Airport surcharge

Airport surcharges are added to all rentals at airport locations. This is around 13% (it had been at the 11% level for some time) and is bundled into the rental price per day from these pick-up/drop-off points. The rental companies defend this because of the “higher rental and operational costs” involved in trading from airports. Some rental operators levy a surcharge across all locations, regardless.

‘Insurance’ options

Ticking the boxes on ‘other’ insurance options (which are not actually insurance at all), including tyre cover and windscreen or glass cover can easily add another R15 or R20 to the price of a rental per day. This is not to mention actual ‘value-added’ insurance products sold, which provide cover to individuals in case of an accident. (In the case of standard or super waivers or ‘cover’, understand the difference between the theft waiver and the damage waiver. Some rental companies needlessly separate the two).

What is included, you ask?

Many of these fees are obfuscated – some rental companies don’t even disclose them on their websites – and are most often not explained in detail.

One company’s FAQ section responds to the question ‘What is included in and excluded from the rate?’ with this:

“Your reservation confirmation will detail the items that are included in the rate. It is important to always understand upfront what the rate includes and what you are further liable for.”

What?!

The industry body, the Southern African Vehicle Rental and Leasing Association (Savrala), would do well to standardise how its members are required to disclose these fees. I am not holding my breath.

And the fees continue …

In the unfortunate event of an accident or other damage, prepare for another raft of fees, including a claim administration fee and an assessor’s fee alongside the costs of the damage itself. Or, if you’ve paid for that super-duper waiver option, just the limited liability amount (commonly referred to incorrectly as ‘excess’), which could still be quite steep …

Car renter, beware indeed.

Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

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A proper investigation on insurance rates will most probably reveal a collution between the rental companies. Comprehensive insurance still has an additional payment (upfront deposit). Cheaper rentals often mean a bigger liability in case of a claim.

Now u know why Uber has rattled the Car Hire Industry.

….Uber “rattled” themselves into ongoing losses.

(I think car hailing services are great, but business model needs to be modified to ensure profits)

Get a quotation before you start and there are less surprises. Travel is expensive you are going to be paying.

Its an opportunity to disrupt them. Competition will lower the prices. If you want to reduce some of the fees you can uber to a rental agency outside the airport, or use Turo (airbnb for cars). Entrepreneurs have a nice opportunity to disrupt and use tech to take on the prices

Agree, car hailing services (like Uber) is just the type of competition one needs against car rental companies.

However….Uber has been making a $3bn loss in 2018, and $1bn loss in Q1/2019.

Sadly, the business model of the established car rental companies (by ripping off the odd customer with tricks/fine print) seems to cement the necessary profits 😉

Uber is trying to undercut the competition by undercutting competitors through subsidies to riders. It doesn’t mean the business model is bad, just that the barriers to entry are too low, and need to be tweaked.

Excellent article. Reveals the extent of dishonesty in the industry precisely and concisely. More articles like this benefit the consumer and halt the poor conduct of parties providing services to consumers.

On the damage I had it both sides. When I collected the car nobody inspected the car with me – obviously I tell them to fly a kite when they later want to say the chip in paint on left fender is for my account. Never heard from them, never paid.

When handing in the second time, again nobody was there to inspect. Four days later the call about a scratch. I tell them nobody was there to record, so get knotted. No payment.

NONE of these firms repair the car to perfect each time. The accumulate hundreds of dings and scratches but charge each customer for each item AS IF it was to be repaired. I doubt most of those things are even attended to before being sold. THAT is fraud. Imagine I claim R4000 for a ding from my insurer but choose to live with it.

The firm that goes to a what you book is what you pay rental, provided you took full insurance, will murder the competition.

Readers beware of hiring a car through Booking.com. They scammed me for over a R1000 for Insurance which I did not want

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