It's pretty much a given: at least one thing has to go wrong when you're travelling. And there's quite a good chance it'll be car hire: one in 10 Aussie travellers have run into trouble when hiring a car, both here and overseas, according to latest CHOICE research.

CHOICE canvassed a nationally representative sample of 1100 Australian travellers to find out their biggest problems with car rentals. Young travellers (18-34 year-olds) were significantly more likely to have problems with car hire here in Australia than other age groups.

For those experiencing problems with car hire, these were the top three troubles:

  1. Hidden fees (40%)
  2. Preferences not delivered (30%)
  3. Unclear terms and conditions (26%)

If you're hiring a car within Australia you have some protections under Australian Consumer Law, but internationally you'll be subject to the consumer laws of the relevant country.

Did you know some travel insurers will provide cover for your car hire excess? Find out which ones do in our free and unbiased travel insurance review. Or find out how to reduce your car hire excess here.

Hidden fees

Hidden fees and charges seem to be the biggest problem when it comes to car hire, with nearly four in 10 people who hire a car experiencing the pain of unexpected costs.

If you've ever hired a car you're probably familiar with the great rate creep, as unforeseen fees and charges suddenly appear on your bill. Here's a bunch of potential extra charges that you should be aware of before you drive.

Administrative fee

It's common practice among car hire companies to charge an unavoidable administrative fee of around 3.5% on top of the total cost.

Vehicle registration recovery fee

This fee is often tacked onto the quote and charged as a daily rate to recover the compulsory costs of registering the vehicle.

Credit card surcharges

Depending on what credit card you pay with, surcharges tend to vary from 1.5% to 4.95%. Following on from the RBA's ruling in 2013, credit card surcharges should be limited to the "reasonable cost of acceptance" associated with processing the transactions. However, as we've pointed out before, it's not always the case.

Admin fees on tolls

If you're using a rental agency's e-tag system you'll be charged an additional admin fee. Some companies will allow you to use your own e-tag while others don't. Both Hertz and Redspot have a system where you can pay a rate per rental day for unlimited tolls, but it's pricey if you don't use many tollways.

Excess reduction

The base rate can be bumped up dramatically by paying to reduce your excess liability. As it's optional, the fees don't need to be disclosed up front, which makes comparing prices across providers tricky. However, there are other ways you can insure yourself against the excess.

The base rate can be bumped up dramatically by paying to reduce your excess liability, but there are other ways to insure yourself against the excess

Cancellation charges

A cancellation fee will generally apply if you don't cancel within a certain time period. Be careful as car rental companies can trick you into thinking there are no cancellation fees. For example, on Hertz's website we found an advertisement which read: "No cancellation or amendment fees*…*when the booking is cancelled within seven days of being made."

One-way/relocation fees

If you want to drop the vehicle in another location you'll likely be charged a fee for the convenience. You may also be slugged an extra charge for returning accessories to different locations. For example, Budget charges a $250 fee for its GPS system if it's dropped off at a location that it hasn't pre-approved.

Premium location surcharge

Certain locations (such as airports) will often have a premium location surcharge tacked on. For example Hertz charges a 28.5% fee if you're renting from Sydney airport. And the extra catch is that because it's a percentage, it's not just applied to the base rate, it applies to everything, including all additions such as excess reduction costs and GPS hire costs.

Additional driver fee

If you want more than one person to be authorised to drive the car, hire companies will often charge a fee per day for additional drivers.

Excess kilometres

There's often a limit to how many kilometres you can drive. If you go over this limit, you'll be charged extra by the kilometre.

Refuelling surcharge

If you don't return the car with a full tank, and haven't chosen a pre-paid fuel option, you'll be charged a premium fuel price for the convenience.

Young driver surcharge

Drivers under the age of 25 are often charged a surcharge. For example, Hertz and Redspot charge $16.50 per day while Thrifty charges $27.50 a day.

Early return fee

If you return the car early, some companies charge fees to compensate for loss of rental income, but you should still receive back the charge for the unused days.

Late fees

Some agencies have longer grace periods than others if you return the vehicle after the agreed time. After 30 minutes, Hertz charges for a half day and after 60 minutes that jumps to a full day. Thrifty gives a one hour grace period and only charges by the hour for the first three hours.

Fee for losing your GPS or accessories

Many of the accessories you rent with the car, such as the GPS, will likely not be covered by insurance, and you may be up for a hefty fee if you lose them. For example, Budget charges $495 plus an admin fee and GST if you lose a GPS unit. Even the most expensive GPS unit in CHOICE's latest test doesn't cost that much.

Run into trouble? Find out more about car hire and your rights here.

Preferences not delivered

If you book a car specifically because it's advertised as having certain features, it's pretty frustrating if the car hire agency turns around and says it's not available. And it happens to three in 10 people that have problems when hiring a car. The good news, if you're in Australia, is that if the car was advertised as having specific features when you booked, or if you were told it would have those features, then under Australian Consumer Law you're entitled to a car that fulfils that need. See more in our article on car hire and your rights.

Unclear terms and conditions

If you've ever been confused by some of the terms and conditions set out by car hire companies, you're not alone. In fact, we got a bit of a headache when we took a look.  And our research confirms this, with one in four Aussie travellers having trouble with unclear terms and conditions when hiring a car.

Reducing your car hire excess

Possibly the area of most confusion is what you are and aren't covered for if you have an accident. When renting a car in Australia however, there are essentially three elements you need to be aware of.

  1. Third-party: In each state and territory it's compulsory to have third party insurance to register a car. This covers you for injuries you may cause to other people, but oddly enough, doesn't necessarily cover you as the driver of the vehicle. So it's worth asking what protection you have as the driver.
  2. Liability: The rental agency's basic cover  is generally automatically included, although it's worth checking as Avis has a caveat saying the cover may not be available in all of its locations. The "basic" cover is often known as the loss damage waiver or collision damage waiver, but there's a range of names which can make it confusing. The basic cover essentially reduces your potential liability to a certain amount if you damage the rental car or other third party property. However, you'll still be liable for the excess, which varies across car rental agencies but is no doubt a hefty sum. The excess will often be even higher in the case of a single vehicle accident.
  3. Reduced excess: You then have the option to reduce the excess, sometimes to as little as $0. But reducing the excess can be pricey and is usually charged on a daily basis, and still may not waive all of your liability. There are other ways to reduce the excess such as through RACV or Tripcover. Some travel insurance providers have cover to reduce the excess – in fact, the majority of the policies we reviewed cover your excess liability to some degree.

Excess exclusions

Even if you think you've reduced your excess to zero there are still situations when you might not be covered at all and you'll be liable for the full cost of repairs. That's because there's always a handful of exclusions written into the contract. You'll generally be fully liable for damages if you do something which breaches the contract, such as driving on unsealed roads, or allowing an unauthorised person to drive the car. You can even be held liable for the loss of income to the rental agency while the car is being repaired if you breach the rental agreement. In addition, your liability for single vehicle accidents can't always be completely bought out, so it pays to check.

So, while it's dull, boring and confusing, it's worth reading the terms and conditions.

Some of the common exclusions which mean you may not be covered and could be liable for the full costs of repair include damage as a result of:

  • disobeying road rules or being in contravention of any law
  • driving outside any town or city limits in WA or NT between dusk and dawn
  • hail, flood, fire, storm or cyclone
  • driving on unsealed roads
  • having an unauthorised person drive the vehicle
  • using the incorrect fuel type
  • the driver being affected by alcohol.

Damage to windscreens, glass, tyres, wheels, roof and underbody are usually excluded as well.

Covering the excess

There are alternatives to covering the excess on your hire car. We found most hire car companies will charge between $19 and $34 per day, while buying domestic travel insurance will only cost you around $35 for five days.

 Car hire company products

  Basic excess liability* Reduced excess  Price to reduce excess (per day) 
 Thrifty  $4000  $500-$0  $26.99-$33 
 Avis $3017  $342  $24 
 Budget $2750  $330  $22.73 
 Europcar $3800  $1000-$0  $21.12-$34.56 
 Hertz $4000  $1210-$0  $19.09-$29.09 

Figures correct as of January 5, 2015. Figures may vary based on location, taxes, fees and surcharges. Comparisons based on a driver aged 25+ picking up and economy car from a suburban Sydney location. 

* Not including additional liability for single car accidents.

The alternatives: travel insurance or credit card coverage


Excess coverage 


 Worldcare Travel Insurance**












 Virgin Australia Velocity High Flyer card



 ANZ Platinum card



Figures correct as of January 5, 2015. Figures may vary based on taxes, fees and surcharges.

**For a driver aged under 50 travelling for five days alone.

Heading on holidays?

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