Monday, 27 July 2015

Should I Take Out the Additional Insurance When Renting a Vehicle?

Renting a car becomes essential at certain points of your life. In order to add mobility and flexibility, it is essential that you find the right deal where the car rental is affordable, the mileage restrictions are flexible and most importantly you are not forced to buy an additional insurance.

There are some important things that must be considered while renting a car. The first thing is choosing the right vehicle. You might be tempted to ride a convertible, but that might not be suitable for you and your trip might become very expensive. A compact car can be appropriate and help you save money. Once you’ve made up your mind on which vehicle you would like to hire, you have to go around and look for car rental agencies that offer affordable rates.

Look for deals and discounts which will further lower the car rental costs. But beware of rock bottom prices, they might be traps. Very low prices indicate there are a lot of hidden costs associated with the car rental fees. When you’re satisfied with the rates, make sure you read the terms and conditions very carefully. Car rental agencies have several policies that can make your trip complicated. Check the early return policies, fuel policies (whether you have to return the vehicle with a full tank or pay upfront for the fuel), etc. 

One thing that makes car rental really complicated is car rental insurance. Many car rentalagencies would often persuade people to buy additional insurance so that the renters are safe from all kinds of mishaps, but is it really needed? What if you already have car insurance? Do you still need to buy insurance?
People get confused with such questions and end up doing what the agencies suggest. It is important to educate yourself about the various kinds of car rental insurances, the coverage that they provide and most importantly when should you buy additional insurance while renting a car.

About Car Rental Insurance
The first thing that you would be asked when you land up at a car rental agency is, whether you want to buy a car rental insurance. You’ll be offered with many types of insurances, which might ultimately end up confusing you. Many travellers or car renters have no idea about car rental insurance and whether they actually need it or not. This allows the agencies to persuade their clients and make profits.

Car rental has become complicated than ever, it is essential to be prepared to get the right deal. Before you get confused and feel timid to answer the staff, here are a few questions you need to ask yourself. Do you own a car? Have you used a credit card for renting a car? If the answer to these questions is yes, chances are you are already having car insurance and you already have the necessary coverage. Before you leave your home for renting a car, it is important that you read the car insurance carefully and look what coverage is available for rented car.

It is better if you can carry a photocopy of the insurance. When the person at the rental agency charges you about not have necessary, you can show him the proof. In many cases, your credit card company would also provide coverage but it is essential that you read the documents to be sure. It is true that car insurance is essential whether you are driving your own car or driving a rented car, but there’s no point to add money to your car rental bill when you already have one in place.

Even if you find that you do not have enough coverage, there is no point getting persuaded by what the rental agency staffs tell you. There are many types of car rental insurances and you must know which one to buy. Buying all the policies may add thousands of dollars to your bill, so beware! Before you head towards the car rental agency, educate yourself about the available options and evaluate which one would be perfect for you. At times buying the basic CDW (collision damage waiver) would be enough, so why buy the others?

Things to Know before You Rent a Car
There are many advantages of renting a car than waiting for public transportation or driving your own car. By renting a car you can save money and time. You don’t have to wait in the long queues to ride a public transport vehicle or worry about damages and maintenance as in case of your own car. While on a vacation, you can save thousands of dollars that you had to spend on taxis by renting a car. Hiring a car enables you to stick to your own schedule – so you know when to stop and when to drive.

Hiring a car also allows you to ride your favourite car at low costs. You can take advantage of the numerous deals and discounts that are available on various travel sites and on personal rental websites. These discounts and coupon codes can bring down the rental fees considerably, so that you ride in the most cost-effective way. Although there are numerous benefits, the hidden costs can take a toll on your budget if you are not aware of them. So it is very important to be prepared before you sign the contract and drive out the car from the agency.

Here is a list of few things that needs to be considered to make your travelling smooth and satisfactory:
·         Use Your Credit Card to Rent a Car: Using a credit card for hiring a car is a good option, since most of the car rental agencies will do a credit score check before offering you a deal. Using the credit card will save you from undergoing a credit check. Many car rental companies won’t accept prepaid credit cards. One more benefit of using a credit card is that they might provide insurance coverage. The first thing that you’ll be asked while renting a car is that whether you have insurance or not. Buying insurance from the car rental agency may add hundreds of dollars to your bill per day. Using the credit card may save you from spending extra. Several credit card agencies provide coverage for the card holder at no additional cost.

·         Extra Charges for Young Drivers: If you or any of your family member who is willing to drive the car below 25 years of age, expect some extra fee to be added to your daily rental bill. Even if you have a spotless driving history, you will be considered a liability for the car rental company. While most of the companies will not allow drivers below the age of 21years, many will allow drivers who are 25 years old in exchange of a hefty amount. So make sure you consider the age of the people who are willing to drive the rental car, when determining the budget.

·         Pay Extra for Additional Drivers: Even if you and the people expected to drive the car are above 25 years old, you’ll have to pay an extra fee to register each additional driver when you rent car. You’ll be asked to declare the number of additional drivers you need and the fee would be calculated depending on the number you suggest. So make sure you carefully determine the number of drivers you need. It is recommended to restrict the number of additional drivers to 2, so that your rental bill does not go skyrocketing.

·         Avoid Unpaved Roads: This might sound unimportant, but what if your collision damage waiver gets void? Yes, most rental companies will penalize you if you drive on unpaved roads. Ensure you read the contract well before signing. Even if you love adventures while driving, the cost of paying for the adventure is too much. Rental car insurance is very expensive so you will not want it to be cancelled. Driving on unpaved roads is prohibited due to possible damage of the vehicle and the cost to repair it. You may be required to bear the costs of repairing the car if any damage is done, due to violation of the car rental agreement.

·         Return the Car with Full Tank: the rental agency wants you to return the car the way you drove it off and this is true for the fuel tank as well. Most of the rental agencies want you to return the car with a full tank and if you forget, you’ll be charged double the actual gas rates. One option is to pay upfront for a full tank when you rent a car, but returning the car with an empty tank is ideally impossible.

·         Rent a Car Off-Site: Renting at the airport might be expensive. It is natural that after a tiring journey via flight, you’ll want to board your car as soon as possible, but if you want to avoid the airport surcharges, you have to rent a car off-site. There is no way to avoid such fees if you rent from the airport, since the rental agencies are legally obligated to collect these fees. You can travel to the downtown area by a shuttle or public transport and hire a car from there. This will help you save hundreds of dollars.

·        Extra Cost for Extras: It’s absolutely perfect to rent the extras along with the car, if you have enough money. Travelling with a baby? Hire a baby seat. Love music? Get a radio. Want to track your journey? Hire a GPS tracker. Now that you have all that you need to make your journey comfortable and exciting, you’ll get equally excited to see the rental bill. Don’t faint if you see a thousand dollar added to your bill for extras. Yes they are that expensive. There are ways to avoid these hefty fees. Bring along your baby seat, you’ll probably require it on the flight as well. Use the navigation system on your mobile phone, that’s equally good. Equip yourself with whatever you will need while travelling and avoid extra fees being added to your rental bill.

·        Buy Car Insurance Wisely: It is quite possible that you don’t have enough coverage, so you have to buy insurance to save yourself from legal liabilities. If you are in such a situation, you can opt to buy insurance from the car rental agency, but that can be very expensive. One other option is to buy car insurance from other sources. This way you can negotiate the price and shop around to get the best deal. There are many rental car insurance options, but buy ones that are essential.

It is easy to pile on money on your car rental bill, but doing some research and homework can save you from paying extra money to the car rental agency. Make sure you ask questions to the rental staff and have a good idea about what to expect from the car rental. If you are unable to understand any part of the rental contract, ask for an explanation. Sign the contract only when you are satisfied with clause and policies mentioned in it. Being able to drive your favourite car is great, when you can drive it in a cost-effective manner.  

Should You Purchase a Car Rental Insurance?
The answer to the question ‘Whether you need car rental insurance?’ is never easy. When you reach the car rental counter, the first thing you are offered is a car rental insurance, and you are expected to make a prompt decision, whether you need it or you don’t. Many people decline the offer without giving it a second thought since they either don’t want to add extra to their daily bill or they are confident that they have enough coverage already.

What if you meet an accident? What if the rental car is damaged? Does your car insurance cover you from all this? This brings up the question all over again, ‘should you buy car rental insurance’. Well, it depends on some factors like your auto insurance, credit card benefits and what sort of coverage the auto rental policy offers. Here are some considerations that will help you decide whether or not to go ahead with buying car rental insurance:

1. Go through Your Auto Insurance
Reviewing your own auto insurance is very important to be able to decide, whether you need additional car rental insurance or not. If you own a car, you must be having auto insurance and in most cases this would cover your rental car as well. The basic liability coverage would protect you from damage that the rental car causes to other vehicles, people or properties. If you don’t have a car of your own, you should consider buying car rental insurance from an insurance company that offers the best prices.

If you have auto insurance and you don’t want to buy extra insurance, make sure the existing policy has collision coverage and comprehensive coverage that covers any damage to your car due to accident, flip over, vandalism, flood, fire, etc. If you find these present on your auto insurance, move on to the fine prints to find out whether rental cars are eligible to get the coverage. The best way to get answers to these questions is, call the insurance company and get answers to all the questions.

2. Know Your Credit Card Benefits
The car rental protection offered by various credit card companies vary by the type of card you are using. While many companies would pay the loss-of-use charges, many will explicitly prohibit them. Since the levels of protection differ widely, it is wise to call your credit card company and ask about the specific coverage details provided for each card that you have.

The primary coverage would be provided by your personal auto insurance while the other things would be taken care of by the credit card companies (but they have their own limitations). Certain type of cars might not be covered by the credit card companies, so make sure you have a detailed discussion about the coverage provided. The credit card coverage will be applicable only if you do not take insurance from the car rental agency, make the payments using that particular credit card and the person renting the car is same as the one who owns the credit card.

There are many things to be considered if you are depending on the credit card company to provide coverage for rental cars. Meet them personally to know about the details, and once everything is settled ask them to provide s printed copy of all the coverage and terms & conditions.

3. Go through the Car Rental Agreement Thoroughly
For this, you will have to visit the car rental agency. Ask for the car rental agreement and find the section that includes details about your responsibilities under the state law in case there is an accident and the rental company’s waiver.  If the liability exposure is limited by the state law and you are lucky to have enough protection from your personal auto insurance and credit card companies, you can confidently decline the car rental insurance offered to you.

Whether you need additional insurance or not would typically depend on your situation. If you already have enough coverage there is no point buying extra coverage to increase your daily rental bills. On the other hand, if you find that you do not have sufficient coverage, you may have to buy extra insurance. The staffs would offer you many types of rental insurance, but you do not have to buy them all. Evaluate your travelling needs and the associated perils and then buy appropriate insurance.

Accidental death and personal property insurance offered by the rental agencies should be declined at once, since these are covered under the health, homeowners and life insurance that you already have. Buying a rental car insurance can be very tricky, so make sure you do enough research and homework, so that you don’t end up paying excess.

Types of Rental Car Insurance
If you come to know that you are not adequately covered by your existing auto insurance and the credit card company, buying a car rental might become essential. Some states make it mandatory to have car insurance before you drive a car. Coverage is essential since the costs associated with damage of the car or other property can be too expensive. The medical costs of the victims can also be huge.  Moreover, to keep the rental vehicles safe, the car rental company might require you to buy insurance before you can drive their cars.

Here are the four basic types of car rental insurance which will be offered to you when you approach a car rental agency.

·         Collision Damage Waiver: The collision damage waiver and loss damage waiver is not insurance in true sense. It means you are agreeing to pay for any damage done to their rental vehicles or in case of theft. So do you need to have this insurance? This is one that you can consider buying from the rental agency. If you are forced to buy insurance while renting a car, ask for a CDW or collision damage waiver. While your personal auto insurance will provide collision coverage for rental vehicles, all types of rental charges might not be included. For example, many auto car insurance or credit cards do not pay the loss of use charges. Credit card coverage is secondary in nature, so consider buying a CDW if there is no other option. The best option to get protection against theft or collision is through a third-party rental car insurance. These are cheaper than the ones offered by car rental agencies.

·         Supplemental Liability Insurance: Liability insurance offers coverage for damage done to other’s properties and medical costs of the victims who got injured because of you. A minimum amount of liability insurance is required by all states, so if you already have auto insurance chances are you have liability coverage. The staffs at the rental agency may try to persuade you by telling that you do not have enough liability coverage, so it is essential to have supplemental coverage. If you are satisfied by what they tell you, get umbrella liability insurance which is a low cost policy added to the existing homeowners or auto liability insurance. This provides enhanced protection when you’re driving a rental car, without adding too much to your daily rentals.  

·         Personal Accident Insurance: While liability insurance looks after other’s benefits, personal accident insurance will provide coverage for your damages, injury, etc. The passengers travelling along with you will also be covered under this policy. In most cases, you are not required to buy this type of insurance since the benefits offered by the personal accident insurance is already covered by the health, car or life insurance that you already have. They are also covered under the mandatory coverage provided by the car rental agency. So you can safely decline to buy this insurance.

 ·         Personal Effects Coverage: This provides coverage for theft of personal possessions from the rental car. But the coverage has a fixed upper limit. The homeowners or renter policy already provides coverage, so make sure you check the policy before leaving home. If you are travelling with expensive jewelleries, costly electronics and other instruments, it is wise to protect them.  If you are not able to check the policies, keep a copy of the policy with you, so that you can refer it whenever needed.

The easiest way to buy a rental car insurance is to research on the types of policies available and their respective coverage. Review the personal auto insurance and credit card benefits thoroughly. If you still find yourself in a confused state, get in touch with a third party insurance company and ask about the possible alternative. Tell them about your existing policies and get their opinions about buying extra insurance from car rental agencies. Even if you check ‘yes’ on the car rental contract, there are ways to waive off the insurance. Return it to their office right on the next day and ask them to cancel the insurance.

To make your vacation or trip, memorable, it is important that you make the right choices. If you are sure you don’t need additional insurance, firmly say a ‘NO’.

Things to Consider About Your Auto Insurance before Renting a Car
In most cases, your auto insurance will provide enough coverage for you when you drive a rental car, but there are situations when you might not get the coverage at all. If you are in doubt about any situation, which can void the coverage provided by the auto insurance, get in touch with the insurance provider at once and get all the queries cleared. Some things to consider are:

·         In case, a person who is not included in your personal auto policy drives the rental car and a mishap occurs, the person and the damages caused by them may not be covered. Get an answer about this from the auto insurance provider.

·         In many cases, the coverage provided by the personal auto policy is not enough. Even if it covers collision damage for a rental car, the limit may be equal to the value of your vehicle. If the rental car values more than your personal car, then you may have to pay for the extra damage from your pocket. In such cases, calculate the amount of coverage that is not available and consider buying a supplemental insurance.

·         Several personal auto insurance does not offer coverage for business trips. Most of the auto insurance companies do not cover vehicles that are used to deliver business items like materials, supplies, food, etc. if such is your case, call your insurance provider and get an answer.

·         Insurance coverage for long term rentals is very tricky. Most of the credit card companies offer coverage for 30 days maximum, so what would you do if you need a car for a longer period of time?

·         Coverage by your auto policy and credit cards may not be valid for foreign countries. Look out for the other options available.

·         Some special types of cars and vehicle may not be covered under the rental insurance provided by the credit card companies as well as you auto insurance. Check it well before hiring a car.

Often times, you face situations where you have no other way than to buy additional insurance. If you are in such a situation, get in touch with a third party insurance provider and ask about the available options. Many times you can get policies equivalent to the insurance offered by the rental agencies but at cheaper rates. Why would you spend extra, when you can save money by buying smart? Do some extensive research on available rental insurance and shop around to find the best insurance policy with best rates.

Reasons You should not Take Additional Rental Car Insurance
Buying a car rental insurance is the trickiest decision that you have to make while renting a car. Many times people end up buying additional insurance that they actually don’t require and this adds something around £5 to £30 per day on their rental expenses.

According to National Association of Insurance Commissioners (NAIC), about 42% of the renters are unsure about the insurance coverage when they are out to rent a car. And 34% of renters among them will buy additional insurance to make sure they are well protected while they drive, even if they have to pay excessive money. This automatically helps the car rental agencies to rake up their profits.

People make this mistake since they don’t know their auto insurance well. They are also unaware about the benefits provided by the credit card companies. Even if they are not completely covered, some form of protection is always available. The leading credit card companies like American Express, Discover, Master card and Visa, all offer car rental insurance and are ranked 1st, 2nd, 3rd and 4th respectively, based on the how clearly they mention the coverage and how easily can the claims get paid.

These companies offer collision damage and theft protection on rental cars as a perk for being a member with them. To make sure you make the credit card coverage available, you have to use your credit cards to pay the entire rental bill. You cannot buy a supplemental insurance from the rental agency. If you mistakenly, buy one the credit card benefits for rental cars become void. Even though such benefits are available, 1 in 4 consumers are in totally unsure about the coverage provided by their credit card providers.

Rental car coverage offered by credit card companies have their own limitations, so you should know the types of cars covered, the extent of coverage provided, before you rely on  credit cards for protection. Some companies will not pay for damages done due to driving on unpaved roads, while some others would not consider exotic cars and vehicles with open beds like trucks. Many credit card companies would cap the rental duration at 15 days, while others would offer coverage for a maximum of 30days and no more.    

Here is a glimpse of the rental car coverage offered by the leading credit card companies:

·         American Express: All types of cards issued by American Express offers insurance and rental coverage for damage to tyres and rims, towing charges and accidents that occur due to driving on dirt and gravel roads. In most cases the coverage is available for 30 days. The company also provides coverage for loss of use of the rental car and insurance deductible. The limitations are – some type of cars like SUVs, trucks, etc. are not covered.

·         Discover: The rental coverage provided by the cards issued by Discover end up to 31days. Loss of use on the auto insurance is not covered, while coverage is available for damage to tyres and rims, towing charges and accidents occurring due to dirt and gravel roads. Vans, trucks and luxury cars are not covered under the rental insurance provided by Discover.

·         Master Card: Rental insurance is only available for the World cardholders. For World cards the covers lasts up to 15days and for World Elite card holders the coverage is available for 31days. The towing fees, damage to tyres and rims are covered and accidents occurring on dirt and gravel roads that are well maintained by the city are covered. Insurance deductible and loss of use is covered, but no protection for trucks, vans and luxury cars are available.

Visa: The rental insurance benefits are available for all types of card holders. Insurance deductible, towing charges and loss of use are covered under the rental insurance. Accidents on dirt and gravel roads are not covered and the coverage is available for 15days domestically. Coverage for damage of tyres and rims are also not covered. Vans, luxury cars and trucks are not covered under the rental insurance offered by Visa.
In many countries like Italy, Ireland, Australia, Jamaica, etc, credit card rental insurance is not accepted by the rental companies. If you’re going on a business trip, make sure your personal auto insurance offers coverage for business car rentals.

Why do the car rental staffs pressurize you to buy additional insurance, even if they know you are adequately covered by your own auto insurance or the credit card company you are using!? Here is the reason why they will:

The car rental insurance offered by the car rental agency is highly priced. Much more than what you can obtain from a third party insurance company. Insurance is a high margin item for the rental agencies. Being able to sell rental insurance, the car rental agency is able to make huge profits just like the other rip-offs which include GPS navigators, extra child seat, prepaid gas charges, etc.

The truth is that the rental agencies obtain these insurance for very less but sell them at high rates to their clients, which increases their daily rental bill considerably. Selling products other than the car and the mandatory insurance coverage is essential for the employees for their livelihood. Many employees feel guilty about doing so, but in order to get promotions and salary hikes, they have to show high sales on their part.

Rental car insurance can be the biggest car rental rip off. When you stand at the car rental counter, you be offered with various forms of the same rental coverage and you’ll be expected to make the decision in a fraction of a second. There will be hundreds of people standing in the queue, pushing you to complete the formalities fast and on the other side of the counter will be a person persuading you to sign a contract with the rental insurance offered by them – this might make you go insane, but you will have to make the decision under this tremendous pressure.

To make the process smooth, review the auto policies and credit card benefits thoroughly before leaving your home. If you find you don’t have enough coverage, talk to the insurance providers and know about other options. Under all circumstances, insurance bought from a third party provider is cheaper than that bought from the car rental agency. The rental insurance offered by credit card companies is secondary, so make sure you evaluate the auto policy well.

If you already own a car, chances are that you have enough coverage and there is no point in buying additional rental insurance. But if you see, the employee takes you to a point where you have no other option than to buy rental insurance, choose the CDW or Collision Damage Waiver and nothing else. All other types of insurance offered are utter wastage of money and will be covered under the health, homeowners or car insurance policies that you already have.

Remember, when you are on a vacation, you are prone to spend more than what you have decided – shopping, sightseeing, outdoor activities, there is a lot that you have to explore. So it is wise to keep the rental costs minimum.  Carry your essentials, know your insurance coverage and return the car with a full tank – this ensures that most of the rip-offs are taken care of.

Author Bio: Vineet Agarwal has been long associated with V1 Technologies which offers world class Website Design, SEO & PPC, Domain & Hosting, Mobile AppDevelopment and other similar services. Aside from being a dynamic entrepreneur, Vineet is an avid traveller and loves exploring new countries and culture. Discount car rentals interest him largely and he has been extensively sharing his knowledge with friends and peers about discount car rentals and mistakes to avoid when hiring cars. 

Tuesday, 21 July 2015

Why Do Rental Vehicles Have Mileage Restrictions

Car rental is an absolute necessity whether you plan a trip or want a replacement for your car, which has landed up in the repairs shop. There are numerous benefits of renting a car; however, the most basic one is that it is a cost-effective way to add mobility to your daily life. Most of us have the impression that the only things we have to consider while renting a car are paying the rental amount (whether daily, weekly or monthly), return the car with a full tank, pay the taxes and in some cases buy an insurance, even if you have one in place.

What we don’t consider is the mileage charge.

Most of us have the impression that car rentals with unlimited mileages is standard, but that’s far from true. Not very long ago, it was almost impossible to rent a car without buying a CDW (Collision Damage Waiver, an insurance that car rental companies provided). In most cases, it was not required since the travellers or renters had their own car insurance policies, which covered rental cars or the credit cards they used to hire the car offered them this coverage. Soon the car rental companies understood that this way of making profits were turning sour and they made the insurance optional. Only people who did not have car insurance or those who were not covered by their credit card companies were required to buy insurance from the car rental companies.

The profits of the car rental companies lowered further since the renters look advantage of unlimited mileage. This resulted in lower resale value of the vehicles since the resale value is determined based on condition of the car, mileage, age of car, etc. Consequently the car rental companies were not getting enough return on investments and it was essential for them to find out ways to improve profits. Soon the rental agencies imposed free mileage caps on their rental vehicles. In most cases, they offer free mileage till 100 miles and after that it becomes chargeable. This enabled car rental agencies to recover their losses and improve their return on investments.

Do You Really Pay for Mileage When Renting a Car?

When you hire a car you have to pay more than just car rental. If you are hiring a car for the first time, chances are you might frown at the rental charges and will be busy comparing the rates with different agencies. Once you find an agency that boasts of offering the lowest rental charges, you surely will feel elated, since you have got the best deal ever! But wait, have you considered the taxes, the gas charges, early return policy and most importantly the mileage charges?

These can add a twist in the story and what seemed to be the best deal can turn out to be a rip-off! The worst part – there is no hard and fast rule about the mileage charges. It can vary with each state and it is solely up to the car rental company to decide how much they are willing to charge you. Different locations of the same car rental agency may charge differently. So be very careful when calculating the cumulative amount for your car rental.

Here are a few things you should consider when hiring a car:

Mileage Fees

With each mile the value of a car is depreciated. Whether it is your own car or a rental car, this is true. The resale value of the vehicle gets lowered with each mile it travels. Car rental companies take this into consideration and compensate the depreciating value by charging you for the mileage you drive. The charges vary with individual companies – while some agencies would offer unlimited mileage for a flat fee, other would charge you on a per mile basis. Some would offer a free mileage and charge for miles above that.

Hiring Contract

The rental agencies will make you pay for the mileage whether you pay it separately or the charge is part of the rental fee. A few car rental companies will let you choose an unlimited mileage plan with high rate or charge on a daily basis with lower rates. The plan most suitable for you will depend on your travel requirements.  

Unlimited Fees

If you are not certain of your driving needs, an unlimited plan is suitable for you. Unlimited mileage plans are not the same with all car rental agencies. Some would offer you to drive unlimited miles within the same state while others will allow you to go cross borders. Many companies charge a onetime fee for unlimited mileages. The GPS system provided within the rental car helps the agency to track where the vehicle is being taken. Any suspicious act can attract unpleasant consequences.

Mileage Caps or Allowances

If you are not choosing an unlimited mileage plan, the rental agency will restrict the number of free miles per day or over the entire rental period. You will have to pay extra for each mile over the mileage cap. The vehicles are provided with an intelligent system that gives the rental agency every detail about the miles covered. The mileage cap or allowance differs with each car rental company.

Hiring Luxury Vehicles

If you choose to hire a luxury or specialty vehicle be prepared to pay the premiums rates. The charge per mile also goes up depending upon the type of car. Don’t be surprised if the mileage allowance is diminished and the per-mile charges are hiked for specialty vehicles.

Consider Your Driving Plans

Chalk out your driving plans well ahead of time so that you can choose the mileage plan wisely. Planning to drive cross borders will require you driving long hours and you will cover great distances at once.  But if you want to hire a car just for airport transportation or some sightseeing, you may opt for limited mileage plans.

Compare Costs

As said earlier the charges per mile vary with individual companies so make sure you check the rates with many companies before finalising. In many cases, where the rental company charges high rates for limited mileage plans, choosing an unlimited plan might save you a lot of money. So make sure you make an informed choice.

You got to have a plan so that you don’t end up paying all your savings for the car rental. You can hire a car on the weekends when the car rental fee is less compared to that on weekdays. If you save on the car rental you can use that money for paying for the extra miles. In some cases, hiring for long term proves to be less expensive than hiring on a daily basis. Make sure you talk about the packages the car rental agencies offer. Look for deals and discounts and check whether they are valid on the mileage fees or not.
You can negotiate with the mileage cap and have it extended to some extent, so that if you are not on a tight schedule you can cover the free miles and then wait for the next day. Though it might not be suitable in all cases, you can give it a try. There’s nothing better if you can save money. One other way to save on the extra miles is, take the short route to the destination. Take help from the locals and ask about the shortcuts. Refer to Google maps and find out if there are other routes to your destination.

Choosing Between Limited and Unlimited Rental Car Mileage

Confused about which car rental plan to choose? You’re not alone, many travellers and renters have to go through the same dilemma. With so many factors to take care of – insurance, mileage charges, extra charges, gas charges, etc it is quite natural to get messed up. To able to make the right decision you should know the various plans in details.

When you’re renting a car, the agency will set a maximum mileage limit per day or total mileage for the entire tenure. Once you go across this mark you’ll have to pay for the extra miles. You therefore have two options, either choose for a cap on a daily basis and pay for extra miles or go on for an unlimited mileage plan with a flat fee.

While limited mileage tends to be cheaper than the unlimited plan, there will be situation when the latter will be more cost-effective. Think about travelling cross-borders – you’ll have to drive long distance at a time so the unlimited plan would be apt. Unlimited plan is also suitable for people who are unsure about the distances they have to cover during their trip.

To make things easier for you, here are some tips that will help you to identify which plan suits you the best.
·         How Far Will You Travel: In most cases we focus on the places we’ll be visiting but never take into account the distances to be covered. In order to determine the best plan, this is vital. Calculate the distance you’ll travel throughout the renting period and add some extra miles, just in case you get lost. Now if you see you have to cover long distances, an unlimited plan would be suitable. If the distances are not too much, a limited mileage plan would be fine.

·         Check Whether Unlimited Travel is Available: If you’re renting from a local car rental agency chances are that they won’t allow you to drive their cars out of the borders. In such cases, you’ll not be able to get an unlimited mileage plan. Once you know the travelling needs, go around and check the packages available with the car rental companies.

·         Extra Charges: Limited mileage plans have a flat fee for each day and you pay extra for the extra miles. But in case of unlimited plans you may have to pay extra charges to have peace of mind. So make sure you know about all the charges that would be levied.

·         Check The Fine Prints: It is necessary to go through the contract and read the fine prints, especially if you are taking a limited plan. Check the number of miles you’ll be getting free every day. Also check what amount will be charged for the extra miles. If you fail to check these details before driving away the car you can land in trouble. If you have negotiated the price or the number of free miles, make sure they are included within the contract.

·         Go Along with Your Gut Feeling: Don’t let the car rental companies persuade you to take a particular plan. Evaluate your requirements and rent accordingly. It is evident that car rental agencies are out there to make money, so they’ll offer you the most expensive packages. Consider the limited package and see how much it costs and then see how much you have to pay for the unlimited package for the same trip. Now whichever is lower, go ahead with that package! If you see that both are pretty equal, then it is advised to go along with the unlimited plan, since you don’t have to worry about paying for the extra miles.
It is good to get quotes from various car rental agencies and then compare then to find the most suitable plan. You can also ask for quotes from one agency and show it to the other agencies and negotiate the price.

Avoid Paying Mileage Overages

Many people choose leasing over buying due to the fact that they can drive a new car every few years and leasing on all situations is cheaper than buying. You pay a flat fee for the leasing and the miles you are allowed to drive. The monthly payments would be lesser and you will not have to worry about repair and maintenance issues. That’s all, it’s that easy!

Actually it’s not. Say you rented a car to commute to your office and back home and the round trip takes 10 miles. So you hire a car based on that and then suddenly you get a better job offer which is 20 miles from your house, so now the round trip takes 40 miles. As you know, you will pile on extra miles and you’ll have to pay a hefty amount for that. Not only you, many others like you have faced the same dilemma! The first thing that pops up in your mind is, why do car rental agencies have limited mileages?

Here is the answer: Right from the moment a car is being driven, it starts to depreciate both in condition and in value. The more the car is driven the more will be the loss in value. Car lease payments are based on the expected depreciation during the lease tenure. The lesser the car is driven; the higher will be its lease-end residual value. If the leased car travels more than the allotted miles, the depreciation will be higher and thus you will have to compensate it by paying extra. Lease mileage allowances are measured in annual miles, say for example you lease a car for 12,000 miles per year, so you have a cap of 1,000 miles each month and you must be able to restrict the total lease-end miles to prevent yourself from paying extra. The mileage rates are specified in the lease contract and they cannot be negotiated.
Now if you are already expecting to exceed the annual cap, here are a few obvious options you have:
·         Pay for the extra miles. The amount charged for the extra miles differs with each agency, so be prepared.
·         Park the car and look for other means of transport. If you are expecting to exceed the allotted mileage, park the car once the allotted mileage has exhausted. To avail this option, you should have friends who are willing to drive you everywhere or consider carpooling.
      Start saving so that by the end of the lease you are in a situation to pay the extra money. You have already signed the contract and there’s no way out. You’ll have to stick to the terms and conditions and if you’ve already exceeded the mileage limit be prepared to pay extra.
If you’re not willing to do any of the above, here are a few tips how you can save yourself from paying mileage overages.


There’s enough room for negotiation. When you lease a car from a dealer make sure you discuss the lease terms and ask for higher limits. You may have to pay some extra money but at the end of the lease you’ll be a winner. Though you’ll not get a refund if the total mileage is not covered, you don’t have to pay extra, that’s a big perk. Calculate the miles you’ll be driving on an average per month, multiply it with 12 to get the annual miles and add some extra miles to be safe. Now negotiate with the dealer based on this number.

Budget Miles

Just like you save some money for emergencies, you should save some miles for future. Divide the total allotted miles by 12 to get the monthly allowances. Now make sure you save some miles each month, so that in case you have an emergency you can use this log. The car agency will not check whether you are using up all the monthly allowances, they will look at the mileage at the end of lease. How and when you use is totally up to you.  

Have Other Transportation Choices

If you find that you are piling up extra miles, look out for other transportation methods for a few days to get back on track. Consider carpooling to your office or take a public transport like bus or train. Once you’re back on track and have a few extra miles in hand you can start driving your car again. One effective way of saving miles is by taking turns to drive to the office along with friends. This way you’ll save fuel costs, save miles on lease and the carbon footprint will also be lower. Travelling like this will be cost-effective and environment friendly as well.

Purchase the Car

At the end of your lease term you’ll have an option to buy the car. This can be good since you know the car, the way it has been handled and the amount of depreciation it has already gone through. This can be a smart financial move as well, since you don’t have to pay for the extra miles that you have piled on and you’ll not be charged for excessive wear and tear, if there are any.

When leasing you agree to pay for the depreciation of the vehicle, now if you choose to buy it you have to pay the residual amount (part of the car’s actual price) that you’ve not already paid. So if you had leased a car with 12,000 miles and ended up using 20,000 miles and then you choose to buy the car, you pay the price of a car that has travelled 12,000miles rather than paying for the 20,000miles. So it becomes a bit tricky here. Have all the calculations done and then make the final decision.

Many people think of ending the lease early to avoid paying for the extra miles, but that’s never recommended. Early lease ending might get expensive. Many car rental companies charge a hefty amount as penalty of you end the lease early. Buying the car before the lease ends is also not a good options since the overall cost increases. The leasing company calculates the early buyout price which is higher than the purchase price on lease end. That added with the car loan, sales tax can become a hefty amount. So it’s wise to wait until the lease ends.  

If the situation is opposite, that is you have extra miles in hand at the end of the lease, you won’t get a refund unless you have bought miles upfront. In most cases the lease company refunds the unused miles if it is purchased upfront.

To avoid all the unpleasant situations, it is essential that you keep a track of the miles used and resort to methods that will prevent extra miles from piling up.

Beware of Unlimited Mileages Plans

Unlimited mileages can make you feel great since you can drive as much as you can, go wherever you wish to. Car rental companies advertise rental and leasing plans in such a manner that people get delighted and sign the contracts without going through the contract or reading the fine prints. But before you actually plan road trips and long vacations, make sure the unlimited mileages actually apply. 

Most of the car lease contracts have restrictions on the areas you can drive. If you ever drive outside these areas, you have to face unpleasant consequences. If you have plans to drive cross borders make sure you let the agency know that beforehand. Also before getting overwhelmed with the unlimited mileage plans read the fine prints carefully.

If you fail to stick to the area limitations you may have to face one or combination of the following consequences:
      Reversion of the entire rental or lease plan from the overwhelming ‘unlimited plan’ to a strict flat fee. This can range from 75 cents to $1 per mile, which is huge.
       In case you have a breakdown, you may have to pay a hefty amount which is higher than double the actual cost.
      The extra insurance that you bought while leasing or renting the car might be cancelled. This means extra burden on you if you face mishaps.

Another Big Alert: The GPS Tracking System
In the past when tracking systems were not very advanced, renters took minor risks to deviate from area restrictions. But in today’s world technology has made it possible to track every inch you drive. With the advent of GPS tracking systems, the rental agency is able to track the exact location of their vehicle and there is no way you can stop this.

More and more rental companies are equipping their vehicles with such advanced tracking systems. GPS systems are also used to keep a track of the driver’s driving behaviours. Many car rentals prohibit racing, excessive speed, and other such driving malpractices. Two most common prohibitions imposed by car rental companies are:
      No one other than those signed as ‘additional drivers’ can drive the car. This applies to your spouse, adult children and even a valet who parks your car. So make sure you read the contract well, even though this seems to be a rare problem.
      You may be restricted from driving on paved roads. While you can never anticipate a paved road, the contract restricts you from driving on paved road.

The bottom line is before you rent a car carefully read the contract and the fine prints. If you have special requirements like you have plans to drive in a rural area where you expect paved roads, let the company know beforehand. Any other such requirements should be sorted out before signing the contract. If special modifications are made to the contract, they should be included in the contract with a seal or signature of the car rental staffs.

One Way Car Rentals
When you go ahead with a car rental you’ll be offered with a lot of choices – daily, weekly, monthly packages, mileage options, and choice of returning car with full gas tank or paying upfront and more. To make the travelling smooth and comfortable, it is essential that you choose the right packages so that you don’t have to pay hefty fees.

One way car rental is becoming popular these days with travellers across the world. If you choose a one way car rental you are allowed to pick up the car from one location and return it on another location. This gives you flexibility and you can also get deals and discounts to make your travelling even more soothing. 

Choosing a one way car rental often eases the mileage restrictions so you don’t have to worry about paying extra when you return the vehicle.

Why choose One Way Car Rental?
It may seem weird but being able to drop the car at a different location proves to be beneficial at some situations. One way car rentals would be your perfect choice when:
      When Moving Base: If you are moving to a new city and have plans to drive, a one way rental would be ideal for you. You may want to return the car at your destination without having to drive back to the point from where you picked up the vehicle. One way rentals will also provide you with the necessary transportation facilities. Once everything is in place, you can return the car to the desired location.
      Moving for Business Meetings: Many people have to travel around the world for attending meetings and conferences. A one way rental is ideal for such people, since they are able to pick up a car when they arrive to the city and leave it at the airport site or a location close to the airport before leaving. This is cost-effective as well as the most suitable way of moving around.
       Planning a Vacation on Cruise: if you have plans to take your family on a cruise you can hire a car and drive to the embarkation port and leave the car in the nearest site. If you choose to hire a car throughout the vacation you may have to pay huge parking charges and the chances of wear and tear are high. Instead if you opt for one way travel you don’t have to worry about the wear and tear and it will be less expensive than flying. When you return hire a car and leave it close to your home.

One way rentals are perfect when you want to drop your children to a new college in a new city. So when you wish to have a car for a limited period of time and want to save on your flight expenses consider a one way car rental. This way you won’t even pile up extra miles and you don’t have to pay extra money. One way car rentals prevent you from retracing the steps on your vacation.

Things to Consider When Opting For One Way Car Rentals
Most of the major car rental companies offer one way car rental, though you should check the availability before booking. It is essential that the car rental company has a branch in the location you are willing to drop the car. Some small car rental companies also offer one way rentals but chances are rare since they do not have too many car rental locations. So it is best to get in touch with a number of car rental agencies and see what they have to offer. Before you sign the contract you need to consider the cost of hiring a car for one way car rental.

Cost of One Way Rental
Even though one way car rentals offer many benefits, it may be expensive but less expensive than taking a flight. This way of travelling is expensive than normal car rental because of high base rates and drop-off surcharges. The drop-off surcharge if levied since you leave the car at a different location and the agency has to get the car back to the original point. Even if you find a leasing agency that does not charge you the drop-off surcharge, the base rates would be higher compared to the normal car rental charges. Even though there is not much you can do about the rates, here are some tips that will help you to lower the base rates to some extent.

Shop Around for Choices: it is always recommended to go around take quotes from various car rental agencies. Discuss about travelling needs and ask how much they are willing to negotiate. Check rates on online travel websites which offer car rental services. Some websites will allow you to compare the values side by side. Match, compare and then go for the best deal.

Coupons and Discounts: Many car rental companies offer coupon codes which can be used during booking to save on your one way car rental. Many car rental websites also offer coupon codes and discounts which can help you save a lot on car rentals. Check websites of leading car rental companies and see whether they are offering special discounts.  

Look for Seasonal Discounts: At certain points of the year the car rental companies move their vehicles from one point to another for various reasons. If it so happens that the destination for the fleet of cars and yours is the same, you might be lucky to get good rates for the one way rental. Make sure you call the car rental companies and ask whether they have any such offers in store.

Consider Driveaways: In many cases, a car owner pays a driveaway company to move his vehicle from one point to another. Driveaways are great options for people willing to drive a car at low cost without having to rent a car or piling up miles for their own cars. You need to pay fuel costs after the first tank gets exhausted along with the tolls. To take advantage of such driveaways you should be above 25 years of age and should have a clean driving record.

You also need to deposit some cash which will be refunded when to deliver the car at the final destination. Driveaways are great for people who are flexible with their driving needs and are able to plan last minute. You can search for driveaway companies online or check the yellow pages.

No matter which plan you choose, whether limited, unlimited or one way rental make sure you take care of the other factors also. It’s not just the extra miles, there are various other factors that can make your rental bill go skyrocketing. Many car rentals employees feel guilty about the rip-offs but they get paid for it. Here are some confessions of a former rental salesman about the various ways in which the car rental agencies suck out money from their clients.
     Rates are not fixed: In most cases the rates offered are not fixed. The staffs are trained in a manner that they offer the rates as per the requirements of the clients. If someone is out there to hire a car no matter what the rates are, he would be offered double the actual rates. On the other hand if there are too many cars in-house they may offer you base rates.
           Rental Insurance: Most of us know we don’t need extra rental insurance, but the staffs at the rental agencies would persuade you to take one until you sign the contract. Once you are roped in to add extra coverage the profits for the car rental company doubles.
           Weekend Special Prices: Car rental companies offer special weekend rates since there are too many cars and to maintain the reputation and cash flow, they offer you base rates. Places which attract too many tourists or agencies located close to a busy airport won’t offer you discounts even on weekends since most of their cars would be out.
         Rates Depend On The Staff’s Mood: You will get a great deal if the employee is in a good mood – believe it or not. All negotiations depend on how the employee is feeling when you’re negotiating. The chances of having a good deal with better rates increases if you walk up to the agency to drive the car rather than having you picked up from a point. So if you can save money and have a cheap deal, it is worth taking the pain.

Hiring a car can be very tricky and if you miss out on anything, be assured that you’ll have to spend all your savings paying the rental bills. Right from the duration of renting, to the rental policies and specially the mileage restrictions, all have to be taken care of at a time.

It is true that the type of car rental plan you need depends on your travelling requirements, but being able to plan ahead and take out time to research on various factors that affect the rental plans, can actually help you save a lot of time and money. There are pitfalls at every inch and it is up to you to save yourself from these traps. Next time you plan to go out on a vacation or on a long trip, make sure you get the best car rental deal!

Author Bio: Vineet Agarwal has been long associated with V1 Technologies which offers world class Website Design, SEO & PPC, Domain & Hosting, Mobile AppDevelopment and other similar services. Aside from being a dynamic entrepreneur, Vineet is an avid traveller and loves exploring new countries and culture. Discount car rentals interest him largely and he has been extensively sharing his knowledge with friends and peers about discount car rentals and mistakes to avoid when hiring cars.