Guide to low-risk car rental

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


Check what's included

In addition to the basic cost of renting a car, there are many other surcharges and fees that may apply. When shopping around, check whether the following are included or additional — you want to compare apples with apples.

You may be charged:

  • Fees for additional kilometres (if it’s not an 'unlimited kilometres' deal).
  • Administration fees.
  • Government stamp duty.
  • A surcharge for drivers under 25.
  • Hire of equipment such as a baby seat or GPS navigation device.
  • GST — even these days, GST isn’t always included in all listed prices.

Also, watch out for:

Premium location surcharge

Also called an 'airport recovery concession', this fee aplies to pick-ups from airports. It's usually a percentage based on the total cost of car hire (including excess reduction cover, additional kilometres and one-way fees). It’s not just a one-off charge on the day you pick up, so if you’re renting for a longer period, think about taking a taxi to a different pick-up location. Airport drop-offs aren’t affected in this way, though you may incur a small penalty for different pick-up and drop-off locations.

Vehicle registration recovery fee

This is a surcharge to recover the cost of registering a rental vehicle. It applies to all vehicles and varies according to state.

Fuel penalties

If you’re supposed to return the car full of fuel and don’t, you may be charged a premium rate.

One-way trip surcharge

There may be a surcharge for one-way car rental, where pick-up and drop-off are at different locations. It’s not always charged, but check first.

Electronic toll fees

Passes are required for 'cashless' toll roads in Sydney and Melbourne, and use of these roads without the appropriate pass can incur fines and handling fees from rental car companies. If you suddenly find yourself on one of these roads, passes can be purchased within a certain period afterwards from the toll road operator.

Credit card capers

Many people are unaware that when they give the rental car company their credit card details, the company may do one or more of the following:

  • Deduct a security deposit, rather than simply hold the details of the card. This will be refunded if there are no claims against you, but in the meantime it could leave you short of credit and even cost you interest.
  • Deduct the full limit of your damage liability, even if the damage is minor and unlikely to cost that much, or if you weren’t at fault. You’ll be refunded whatever is owing at a later date.
  • Debit your credit card without warning you first — for example, if it decides you’re liable to pay for repairs that you knew nothing about.

CHOICE thinks it’s unacceptable for car hire companies to debit a credit card without authorisation. In Victoria, where laws have been introduced against unfair contracts, rental car companies are not permitted to include terms in their contracts that allow them to make unexpected debits from consumers' credit cards.

Regardless of this, clauses such as: "You authorise XX to charge all moneys payable to XX under the Rental Agreement to Your credit card or charge account" still appear.

The Western Australian Department of Consumer and Employment Protection successfully advocated on behalf of two consumers in this situation, returning thousands of dollars to them. If you’re similarly charged, the Department suggests you strongly question such deductions with the company. If you have no joy, contact your state fair trading department for advice.

Finally, if you think you can outsmart the system by using a low-limit credit card as security, you might be in for a nasty shock. Credit card companies may honour claims against your card over the so-called limit — and charge you an over-limit fee of around $30.


Sign up to our free

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments