When you step up to a rental car counter, do you automatically anticipate an adversarial relationship with the agent? Lots of us do, and with some good reason: The fear that the agent will try to get us to pay for something we don’t need — or gouge us for something we do need — is real and rental car companies can employ tricks for those purposes. You can avoid some of these with careful planning, but others you can’t.
They push ‘insurance’ you don’t need
The biggest point of contention, almost everywhere, is the collision- or loss-damage-waiver (CDW/LDW). Legally it really isn’t insurance, but most consumers and many rental car agents call it “insurance” anyhow. And at somewhere around $30 a day, it can as much as double the cost of a rental.
Just how much is that cost inflated over the company’s actual financial risk? A few years back, one company told travel agents they could offer customers the unbeatable rate of $0 a day, provided the customer bought the insurance. Rental car companies repeatedly deny instructing agents to use hard-sell techniques to sell insurance; “deep throat” former agents report that compensation and advancement are often tied directly to insurance sales.
You definitely do need collision/loss coverage on a rented car, but you don’t have to buy it at the rental company’s inflated rates. You have three options: 1. Your own auto insurance may cover you, at least in the U.S.; 2. many credit cards provide no-charge secondary coverage; and 3. you can buy primary coverage for less than $8 a day from Insure My Rental Car and Protect your Bubble. Big OTAs also offer damage coverage for $10 a day or so.
The rental companies’ CDW/LDW has one big advantage: If you damage a car, you can return it and walk away with no further responsibility. With other insurance, you may have to pay up front and make claims later. But that freedom from responsibility comes at a high price to you — and a fat profit to the rental company.