So you booked your car well in advance, got the best rate available at the time, traveled to your destination (presumably Las Vegas), and you’re now standing at the rental-car counter, handing over your driver’s license and credit card and watching the agent pound away at the keyboard to input your info.
First, be aware that the paychecks of many rental-car employees who work the counters are supplemented by sales-based commissions, which is why they often give you the hard sell on upgrades and insurance. By reducing human contact, you minimize the dreaded upsells, including scaring you into buying insurance you don’t need and tempting you to rent a bigger, faster, or sportier car, especially after putting in the time to get such a good deal on your original selection. You can eliminate the upsell fear and temptation tactics completely by being a member of a car-rental program in which you pre-select your car and drive off the lot without having to go to any counter.
Of course, the rental agencies with membership programs are the big national firms with the generally higher prices, so if you’re frugal like us, you’re probably standing at the counter of a smaller, cheaper, or regional company.
Another trap at the counter is opting for the gasoline pre-fill option. By initialing this box, you pre-pay for a tank of gas and can return the car on empty. Though the agent will extol the low price per gallon, you’ll pay for a full tank of gas no matter how much is gas you return the car with. The only way you win in this scenario is rolling in on fumes, a game that’s utterly unnecessary, and often stressful, to play.
If you don’t play the game, however, never return the car with less than the expected amount of gas. It’s amazing how fast the per-gallon price skyrockets from the pre-fill come-on deal to the after-fill punishment price.
Now comes the fun part: your decisions about insuring the car while it’s in your possession.
At this juncture, you have to initial lines or boxes for refusing or accepting a bewildering array of insurance options. Though the names can change from company to company, your choices are, essentially, as follows.
Collision Damage Waiver/CDW covers the car only, not injuries or damage to other property, while Loss Damage Waiver/LDW covers the damage to or theft of the vehicle and any loss of use to the rental company; these cost around $10-$20 per day.
Liability coverage is usually state-required (thus, you’ll probably have to buy this if you don’t own a car and aren’t otherwise insured); expect to pay $7-$14 per day.
Personal Accident Insurance/PAI covers medical costs for the driver and passengers in the rental car injured in an accident, at around $2-$5 per day.
And Personal Effects Protection/PEP insures any property that’s damaged in or stolen from a rental car, at $1-$4 per day.
What to do?
Many people don't comprehend the risks they assume when renting a car. If you’re standing at the counter, trying to decide between $20-$50 per day extra in insurance charges and betting against accidents, damage, out-of-pocket charges, loss-of-use fines, accelerated-depreciation (also known as diminished-value) fees, etc., well, you haven’t done your homework. Plainly stated, you don’t know if you’re covered, so if you’re in an accident, you may have to buy a $25,000 rental car that’s been totaled.
At face value, of the five above options, the LDL provides the most insurance.
But a better idea is to know in advance what your current car-insurance policy, AAA or motor-club benefits, and/or credit-card protection plan cover when you rent a car. That way, you’re not rolling dice that are loaded against you if something inadvertent happens to the rental-company car.
For example, if you have comprehensive and collision coverage on your personal car-insurance policy, the value of a rental car is covered even in the event of a total loss. Still, you’ll owe rental-company fees, plus whatever your deductible is. And do you know what that is? $500? $1,000? $1,500? The limits and deductibles on your policy apply to your rental car (as long as you drive it for personal use; if it's a commercial or business rental, your personal car-insurance policy may not apply). That’ll come out of your pocket if you’re in an accident.
And are you covered for damage, theft, and loss of use? Liability for injury to others (personal and property) while in the rental car? Personal effects if damaged or stolen?
And what about credit-card protection for rental cars? What exact coverage does the credit card provide? Do you know?
In general, credit cards offer coverage against collision, damage, and theft, if they offer anything at all, while personal liability (hitting a pedestrian, injuring people in another car, crashing into a telephone pole, damaging items in the car) are generally on you.
And what about specialty vehicles like vans, SUVs, or sports cars? Something else to think about if you’re tempted by an upsell for that car you’ve always wanted to drive.
The best way to determine the coverage your credit card provides is to read the Guide to Benefits (GTB) that’s specific to the particular credit card you’re using to insure the rental car. Look for whether the insurance is primary (which covers property and liability whether or not other policies cover the same risk) or excess/secondary (triggered only when the primary insurance is used up). This is a good reason to keep the GTB booklet when it arrives periodically in the mail, or at least read the rental-car parts before you toss it. You can also find many of them online. When all else fails, see what information you can wrestle from a customer-service representative at the toll-free number on the card.
According to the experts, including a long-time Las Vegas visitor and friend of QoD (FoQ), the best credit card for renting a car is an American Express card with Premium Rental Protection (PRP). PRP is generally available with most AMEX accounts, but make sure to verify that your particular brand of AMEX card offers PRP coverage; some third-party AMEX cards don’t. A quick call to the customer-service number on the back of the credit card to verify, or enroll in, PRP will answer a lot of questions at the rental-car counter.
Note that AMEX charges California residents $18 for PRP per rental, not per day (up to 42 days); non-California residents pay $25. And PRP provides $100,000 in primary coverage for damage and theft, plus $100,000 of accidental death or dismemberment, $15,000 for excess medical expenses, and up to $5,000 for personal-property loss. Oh, and there’s no deductible. You read that right: none. All you have to do is rent the car with the AMEX card.
However, PRP covers only the rental car itself. Bump into someone else's car? Your personal auto-liability coverage applies. Hit a sign or pole or tree? PRP deals with the rental-car damage, but again, your liability has to handle the collateral damage.
An added benefit is that almost all rental-car agents are well aware of the AMEX policy, so you’ll probably avoid the usual flim-flams at the counter; they’ll know you know what you’re talking about.
One last insurance concern that’s highly specific to Las Vegas concerns valet parking. A hotel valet parker is not an authorized driver on any car-rental contract. In fact, any unauthorized driver, including a valet who spends two minutes coming and going in the car, completely cancels all collision coverage from a credit-card company and the rental agency itself. That’s right: If you buy, for example, the CDW while standing at the counter and a valet parker smashes the car, you’re liable. Unauthorized drivers probably even negate any personal auto-insurance coverage.
Now consider the upper-crust Las Vegas hotels like the Four Seasons and Mandarin Oriental, which impose forced valet-parking charges (in the $20 range). Here, you have a situation in which the parking fee is not only mandatory, but if you hand over your rental car to the valet, you’re at major risk for forfeiting all your insurance.
Got a rental-car valet-parking horror story? QoD is all ears.
Okay. You’ve just said no to the upsells. You’ve made all the correct insurance decisions. You understand that if you entrust your rental car to a valet-parking attendant, you’re playing Russian roulette. Now, make sure you look over the contract before you sign on the dotted line. Double-check that you’re not signing for something you didn’t approve of, like insurance. Some unscrupulous car-rental agents have been known to "accidentally" check yes instead of no for an insurance option, and if you sign the contract, you’re setting yourself up to pay what could amount to hundreds of extra dollars. And short of suing, there’s not much you can do about it.
Tomorrow, we address the worst-case scenario: owing the rental-car company money for damage to the car.
