Hacking the Car Rental Sh!tshow

How to hire a rental car well is one of the most useful life skills you can master. These are some simple tricks that can save you literally thousands of dollars at the rental counter.

Despite every technological and business advance we’ve made in recent decades, hiring a car is still a sh!tshow.

The rental process hasn’t changed in decades and typically goes something like this: you arrive at an airport and line up single-file at a rental counter. You patiently wait your turn, then fill out mountains of paperwork. Dozens of pages are printed and signed, and you’re forced to sit through an intentionally bamboozling upsell designed to trap you into buying their insurance products. Then, after the manual process is finally completed, you shuffle a sheaf of printouts to another counter in a car park to pick up the key.

There are loads of reasons for this stunted evolution, mostly traced back to the anti-competitive reality that just a few companies dominate almost 90% of all car rentals globally (in the US three companies control 97%!). The inertia you experience is the result of an oligopoly in action.

I know this inertia more than most. In the past four years I’ve hired over forty rental cars, ranging from tiny two-door electric cars to seven-metre long motorhomes, in locations from Turkey to Cyprus, Greece to Spain. I haven’t owned a car for over a decade, and hiring is the least worst solution to our current living situation across multiple continents. If an expert is someone who’s made all the mistakes that can be made in a very narrow field, then welcome to my PHD.

I’m not alone in despising the entire process. “If you think flying sucks, try renting a car,” wrote New York Magazine.“The absurdity of renting a car will no longer be tolerated” opined The Atlantic. “ And on it goes.

Having wrangled with attendants in over a dozen countries in recent years, I’m now - sadly? - uniquely qualified to give advice on the antiquated, confusing, uncomfortable process that regularly happens at the rental car counter. So this months’s OUTLET is going to be a little bit different. Instead of a strictly work topic, I’m going to take you step-by-step through somethings else that is extremely useful in life: how to hire a car well.

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One Useful Thing for November 2023: Hiring a Car

There are three main stages of hiring at car: before you hire, at the counter, and once you have the keys. This is exactly what to do at each stage to avoid (as best you can) unnecessary hassles and cost.

Before you hire

1. Get your own car rental excess insurance

   This is the single biggest hack that will save you thousands of dollars with your car hires. Car hire insurance from rental car companies is a rip off and should be avoided at all costs. A UK study found it is 14 times more expensive to buy car hire insurance from the rental car company than elsewhere.

   In the unlikely event of an accident, damage or stolen vehicle, the maximum amount that you’re liable for is the rental car insurance excess, which normally ranges from $0 to up to $1500 (of course there are always exceptions depending on your situation, so please treat this advice as general). But if you have an accident and have rental car excess insurance, you will be able to claim the full cost of this excess back to your provider. This means you can, and should, confidently drive away with the largest rental car excess that they provide. But to get there, you first need to survive the theatre of the rental counter upsell.

   Let me pause for a minute here, as this is the worst part of hiring a car. This part of the process is designed to bamboozle you into signing up to expensive daily insurance fees given by the rental car companies that are often more expensive than the car hire itself. The best way around this is to line up your car rental excess insurance before you hire the car. This means you can hire the car with the highest amount of excess, and pay usually nothing additional, from the car rental company.

   There are a few ways to get car rental excess insurance: sometimes it’s included in general travel insurance you might purchase for a particular trip (look specifically for it), and many credit cards in Australia include it if you pay for a minimum spend of the trip on it (familiarise yourself with the details). There are lots of different Australian cards that have rental car insurance cover, just read the fine print and find one that works for you. I have a credit card specifically to hire cars using it, and as long as I spend $250 of a trip’s cost on the card I will get any rental car excess reimbursed to me if I ever need to pay it. I estimate that it has saved me over $20,000 in rental car fees in the last few years alone, and I’ve only had to use it once.

   Last year I was navigating through the impossibly tight streets on a small Spanish island when I heard the deeply unsettling sound of concrete gouging out metal. I’d accidentally scraped a corner off one of the winding streets and gingerly returned the car with a one-metre gash down the side. The excess I needed to pay was $1500, which was already held on my credit card, and the rental company gave me some forms to confirm all the details. I promptly sent them off to the credit card company, and received a full refund of $1500 back into my account within a week. I was shocked at how simple the process was.

   Another option that I have never tried but is recommended by Choice Magazine, is to take out separate and cheap rental car excess insurance. This is a great option if you don’t want the hassle of a credit card. Whichever option you choose, understand how this part works is the key factor in hiring a car well.

2. Use an aggregator

   I’m normally a big fan of going directly to the source when it comes to booking hotels and restaurants. Hotels have long ago figured out that booking direct with them should be encouraged and often offer incentives. But hire car companies still have not. It’s generally around 25% cheaper booking through an aggregator. My top two are Rental Cars and Kayak, and I search both of them to see who has the best deals. Add in the filters you need - automatic or manual, economy-size or SUV - and ensure you order the results by lowest price first as sometimes the aggregators push their preferred partners over the cheapest cars. If you sign up to

   ShopBack before booking you can also get money back off your purchase (and if you sign up to Shopback here using my referral link you also get an additional bonus!)

3. Choose terminal pick-up or shuttle bus

   There’s limited real estate in airports, and most of them are strategically taken by the big three holding companies. You might think you’re getting a good deal by shopping around, but when you realise that one company owns Avis, Budget, Zipcar and Payless, and another owns Hertz, Dollar and Thrifty you can begin to understand part of their business model is to dominate real estate inside airports to block competitors from offering the same level of convenience. So you have two choices: pick up directly from the terminal which is often more expensive, or go with a smaller company that usually has a shuttle bus you need to wait to take you to a location near the airport. It’s convenience vs price, so decide beforehand which one you want before you book by filtering the results that are return by the aggregators.

4. Say no to the add-ons

   Just as budget airlines have perfected the art of bombarding you with pop-ups when you book online trying to upsell you anything they can, car rental companies will always put the hard word on guilting you into getting the top level of insurance. But if you have rental car excess insurance, you can happily say no to all of these. These pop-ups are designed to scare and confuse you - using emotional terms for insurance like “protection!” or the opposite “no protection!” - but armed with the right info you can confidently say no.

At the counter

5. Say no to extra cover at the rental desk

   Let the games begin. Having hired so many cars in recent years, I almost look forward to the variations of the insurance upsell. This is where the person at the reservation desk will tell you what your options are for insurance. There are lots of creative explanations I’ve seen, and the trick is to remain steadfast that you are fine to select the highest rental insurance excess. This sometimes means that they have to put a hold on your credit card for an amount of money to cover the excess, but this is returned at the end so it’s only temporary.

   Once you know the upsell is coming, you can prepare for it. Let me give you a real-life example. My favourite (worst?) example was at Palma Airport earlier this year, where the attendant took out a pre-cut sheet of blank white paper - because they do this all day with everyone! - and wrote three numbers on it. I was hiring a car for 12 days. “You have three choices,” he said. “The first option is you can pay 1400 Euros. The second option is you pay 327 Euros or the third option is you pay 261 Euros. It’s up to you.”

   Now of course, when confronted with this you would automatically choose to pay 261 Euros. Who wouldn’t? It makes sense, right?! But I knew this scam was coming, and asked him to elaborate. “The first one is a No Cover, the second one is Full Cover, and the third one is Basic Cover.” Playing to fear of the unknown, when you’re in a foreign country, and you don’t know the roads, of course you don’t want to take out “no cover” as that sounds risky right?

   I prodded him even further. He was starting to get annoyed at having to explain it, trying to get me to hurry up and hand over my credit card to pay the few hundred Euros and be done with it. “The basic cover is around 21 Euros a day. For 12 days that’s 261 Euros, and the full cover is around 27 Euros a day, or 327 Euros total. Which one do I want?” I wanted neither of those. I wanted the option with the largest excess on it as if I ever had an accident, my credit card insurance would reimburse me for that fee within a few days. “You don’t want the last option, it’s 1400 Euros,” he said. So I have to pay 1400 Euros for that? He squirmed a bit. “No, the excess is 1400 Euros if anything happens.” Aha! I finally understood. He was trying to bamboozle me with numbers that didn’t make sense.

   This is a photo of what he wrote:

   

   His piece of paper had all of the legibility of a doctor’s prescription. To translate it, the first two numbers, 261 Euros and 327 Euros, are what you have to pay to buy daily insurance from the car rental company. The last figure, although written as though I would have to pay 1400 Euros for that option, and labelled as “No Cover”, was in fact the amount of the Car Rental Excess if there was an accident.

   This was the option that I wanted, and of course the car still had insurance on it or I wouldn’t be able to drive it. Knowing and expecting the upsell is the best way of avoiding it. I now always say “I’m happy to go with the highest insurance excess as I have credit card insurance that covers it.” That’s all you need to say, ignoring the intentionally fuzzy and confusing upsell that is design to trick you into paying for daily car hire insurance costs that you don’t really need.

   This scene is repeated hundreds of times per day, to every customer, and is how car rental companies make up to 25% of their profits on such a high-margin product. Often attendants at the rental car counter are heavily incentivised on how many insurance upsells they can make to customers, so they occasionally put up a fight with pressure and lies to scare you into buying. Arm yourself with knowledge so you can make the best decision for you.

Once you have the keys

6. Film the car

   Instead of taking dozens of photos of the car, turn your mobile on and take one long, slow video walking around the car. It’s easier than trying to remember to take photos of parts of the car, and you can pause it when you watch it back to zoom in on any scratches or dents on the car.

7. Drive confidently

   Remember that you are still covered by insurance as you drive , but if you have an accident or the car is stolen, you will have to pay an excess, up to the maximum amount in you contract. On the rare occasion that happens, the car company charges your credit card, and you then pass that cost back on to your credit card, travel insurance or third-party insurance company to refund it. It’s really pretty simple.

8. Keep an eye on your credit card bill

   Ensure the excess amount they put a hold on is refunded back onto your car within a week or so. This is the last thing to look out for to make sure it’s all returned to you in due time.

Knowing these tips you can enjoy the satisfaction of knowing how a system works, and how you can hack it to your advantage. Please note that this is a not a foolproof exercise. Any tiny change to your booking gives some enterprising rental car companies an excuse to try to charge you extra. I’ve had several rental counter arguments trying to update an accidental misspelling of my name on the booking, change the return time by an hour, or even just hire a car in Europe with a NSW Drivers Licence (you see, it doesn’t have the date the license was obtained on it, prompting one particularly terrible company to try to force me pay a fee for having a new license they claimed could be less than a year old instead of 25 years of driving experience). This car company, I later found out, is notorious for its counter lies.

Of course, I do have to caveat that this is general advice for what works best for me when hiring a car. There are also many loopholes in each car company’s contracts that void it if you break any local laws, for example. Your situation will be unique, taking into account what insurance you have and what car hire company you use - but hopefully this is useful information that can help arm you with knowledge the next time you hire a car. Forward this on to anyone in your life who needs to hear this the most.

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I’m currently in Egypt, where we have spent the last month exploring ancient sites and working from here. The pyramids, tombs, temples and Nile are all even more spectacular in person than I ever imagined.

It’s been occasionally chaotic, sometimes peaceful, always awe-inspiring and bloody memorable. This month my publisher has also sent the first proof copies of my new book off to print, which is exciting and scary in equal measures. This ambitious project has been a long time in the making, and I know it’s all going to be worth it when it’s out in the world. I think it’s the most useful and timely thing I’ve ever written.

Until next month,

Tim