Friday 15 December 2017

The car-hire mire

Nick Trend

We're all familiar with 'price confusion' -- the way that travel companies make it difficult to work out the final cost of what you are buying until you are so far into the purchase process that you have lost the will to look for a better price elsewhere.

You know that even if you find a lower rate, there will almost certainly be more extras to add to it during the booking process.

No-frills airlines, led by Ryanair, are the past masters at constructing low basic fares, which only some passengers may actually end up paying, and which rise sharply once the 'extras', which many consider to be essential, are added.

Flying to Prestwick last week with that airline, it would have doubled my fare to check-in a suitcase. So I travelled light, and ran the gauntlet of two Ryanair employees policing the boarding gate with a pair of scales each, to make sure that no one was trying to sneak past with a cabin bag weighing more than 10kg (22lb).

Car-hire companies work in a similar way when it comes to quoting a base price, excluding extras. If anything, meaningful comparisons are even more difficult to make than with air fares and it can be quite hard to work out what that final bill will be.

The psychological warfare does not come in the form of a pair of scales, but through playing on customers' anxieties in other ways.

On that same trip to Prestwick, my €79 hire car would have cost another €34 at the desk if I had not been prepared to run the risk of paying a €640 excess in the event of damaging the car. As I usually do, I decided to take the risk -- €34 is a huge premium to cover a potential €640 loss over a couple of days.

That risk was relatively modest, however, compared with some of the excesses that have started to appear on car-hire contracts. In France and Italy, excesses commonly reach €1,500.

In Sydney, you could expect to pay up to A$7,700 (€5,500) in some circumstances.

A typical amount for Spain is now about €600-€700, compared with about €400-€700 five years ago. To reduce these excesses to zero might cost nearly €21 a day.

To see how this affects the cost, I compared two quotes for a Group B standard car hired from Nice airport. For an Opel Corsa rented for a week from March 8-15 by a 50-year-old driver, I was quoted €216 on the Holiday Autos website.

The excess listed was very vague: €600-€2,400 (you don't find out the exact amount, or the hire-car company supplying the car, until you reach your destination). But I could remove that excess -- both for damage to the car and in case of theft -- by paying €38 extra. So the total bill was €254.

At first sight, a similar car booked on the Europcar website looked slightly cheaper at €215. The excesses were €592 for damage and €718 for theft. To annul the latter and reduce the former by about half, you pay more than €116 extra. Total bill: €331.

So the car that first appeared cheaper is much more expensive once the cost of removing or reducing the excesses is factored in.

One way of getting around the confusion caused by excesses is to buy an independent policy, which covers a single hire or multiple hires over 12 months. Try carhire, or insura You'll pay from about €3 a day, or €50 a year, which is generally less than the amounts charged by hire-car companies.

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