Guide to low-risk car rental

Car rental contracts operate in favour of the rental companies, but you can reduce your risks.
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  • Updated:21 Apr 2008


Car rental signage

In brief

  • Contracts from major national car rental companies have improved since Victoria introduced laws preventing unfair terms in contracts in that state, but there's still room for improvement.
  • Extra fees and contract exclusions can be surprising — compare what the prices cover and check contracts before you sign up.

Please note: this information was current as of April 2008 but is still a useful guide today.

Renting a car

Renting a car at the travel destination offers the freedom and flexibility to make the most of a holiday. But nearly everyone knows of someone who’s been ripped off renting a car, or has encountered problems themselves.

At CHOICE we hear lots of stories about unfair rental car contracts, dubious damage claims, loopholes in insurance cover, outrageous excesses, misleading pricing information, inconvenient mechanical problems and onerous restrictions on use.

In 2004 Consumer Affairs Victoria looked at car hire terms and conditions, in the context of introducing laws to prevent unfair terms in consumer contracts. Unfair car hire terms include those that:

  • Allow hire companies to unilaterally vary prices and other terms and conditions.
  • Require the hirer to agree the car is in sound mechanical condition when it’s collected.
  • Put unreasonable restrictions on where the vehicle can be used.
  • Allow the company to debit the hirer's credit card without informing them first.

The biggest players in the car hire industry subsequently changed their contracts. These changes were rolled out nationally, although smaller companies that don’t operate in Victoria may still include such conditions in their contracts. In Queensland, for instance, consumer complaints about car hire experiences haven’t decreased since the laws were introduced.

All in all, the odds are still very much stacked against the consumer. Some companies continue to debit credit cards without adequately informing the card holder, claim alleged damage to vehicles of which the consumer was unaware (or which was pre-existing but not originally noticed), fail to indicate that they’ve shopped around for a repair deal that’s fair, and have policies with ridiculous exclusions like hail damage.

However, there are steps you can take to help ensure you get a fair deal when renting a car. This report will steer you straight.

CHOICE call for change

It’s not good enough that most consumers don’t have protection from unfair contract terms. CHOICE is campaigning for new national laws to ensure consumer contracts are fair.

When a dispute with a car hire company arises, we think consumers should have a convenient way to resolve complaints, especially where the dispute is across borders.

CHOICE wants to see an industry-wide dispute resolution scheme for this purpose. At present there’s only the state fair trading departments, which don’t have the resources to take on all cases, or the courts.



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