Most consumers have no idea just how expensive renting a car could be, if things go wrong. In some cases, hitting a pothole will see you charged for the entire repair, regardless of your “waiver”.
The emergence of low-cost airlines has made inter-city travel more affordable for South Africans, and has been a huge boost for the country’s car rental industry.
But the combination of longer queues at airport car rental depots, and the inexperience of first-time renters, puts many in an extremely vulnerable position.
There’s too little time for the on-duty agents to run through the many pitfalls of car rental for consumers, and few people take the time to read the company’s terms and conditions online beforehand.
All of which often results in a credit card shock for those who’ve had a mishap with their rental car.
One of the most common misperceptions is that of “insurance”.
The car rental industry does not insure its vehicles: it “self-insures” by means of a waiver system.
Clients can choose between standard waivers or more expensive super waivers, which limit their liability for the costs associated with damage, theft or loss of the car.
So if the car needs fixing or replacing as a result of what happened to it during the client’s rental period – regardless of who was to blame – the client pays only a portion of that cost and the rental company pays the rest.
In the case of standard waivers, the renter pays a lot more for the damage repair or replacement than if they’d opted for the more expensive super waiver.
But what almost never gets disclosed at a car rental counter, when you’re being asked to sign next to the circled waiver costs, daily mileage limits and the like – are the many circumstances which could cancel your waiver altogether and leave you responsible for the entire cost of replacing or repairing the car.
Such as travelling on a gravel road, hitting a pothole, water damage, damage to the undercarriage of the car and not reporting the accident or loss to the company in time – one company gives clients just three hours in which to report the damage or loss of a car.
You may know what you’ll have to pay if the car you’ve hired is damaged or stolen while in your possession, but in many circumstances, you’ll be paying far more than that amount, if not charged for the entire loss or damage repair.
Driving on “unsuitable” roads is a major issue, for starters. That old joke about the best 4x4 being a rental car is not quite so funny after reading the terms and conditions of the rental companies’ agreements.
Several exclude pothole damage from their liability waivers, which car renters will no doubt find alarming, considering the state of many of our roads and how expensive it can be to repair such damage.
The waivers generally don’t apply to undercarriage damage either. And the waiver is invalid if, at the time of the incident, you were over the legal alcohol limit or not adhering to traffic and driving regulations.
Here are some of the other things I found on several rental company’s websites, under Terms and Conditions.
Note how much the time given to the renter to report theft or damage to the company – for the waivers to be valid – varies between the companies.
TEMPEST
In the event of damage or loss, the renter is liable for two and a half times the standard or super “reduced liability” amount where:
The vehicle is uneconomical to repair – generally referred to as a write-off, or driven on “unsuitable roads”, including gravel.
The incident happened on the weekend.
Where the damage is more than R50 000.
Waivers are negated altogether if (among other things) the renter fails to report an accident or damage to Tempest and the police within 24 hours of the accident, and theft of the car within TWO hours of the theft.
BUDGET
Damage caused to the vehicle by potholes, dust storms, gravel or sand is excluded from the liability waiver – you pay in full for such repairs.
Tyre, windscreen and undercarriage damage is excluded if no theft or collision of the vehicle has occurred.
EUROPCAR
Standard and super waivers exclude tyre and windscreen damage.
The renter is responsible for double the limited liability amount applicable where the vehicle has been written off. The waiver is negated by the renter’s failure to report the theft of a vehicle to Europcar and a police station within SIX hours of the event.
AVIS
Avis may charge the renter either the actual amount of the loss or damage suffered, or any reasonable amount, at its discretion, if the loss or damage has occurred in a situation where no physical contact is made with another vehicle or animal or object or person – irrespective whether waivers were opted for or not.
Super collision, damage or theft waivers do not cover:
Damage caused by water.
Damage or loss if the renter does not report this to Avis within THREE hours of them becoming aware of it.
Damage and/or total loss caused as a result of the vehicle being driven on a road that was not suitable for that vehicle “as determined in the sole but reasonable discretion of the company”.
FIRST CAR RENTAL
Waivers don’t apply to damage to glass, mirrors, lights, tyres, rims, hubcaps, windscreen or undercarriage, if no collision has occurred. Waivers don’t apply if the damage was caused by water, if the car hit a pothole, or was driven on sand or gravel roads, or if the renter “failed to ensure that the vehicle’s lubricant levels are maintained”.
TIPS WHEN RENTING A CAR
I asked Southern African Vehicle Rental & Leasing Association president Marc Corcoran for the body’s view on the transparency issue, and for advice to consumers when renting a vehicle.
“The industry constantly tries to find the balance between speed of service, courtesy and processes to deal with queries,” he said.
“But, without question, there is always room for improvement and, in particular, trying to cater for those who have not rented previously on their credit card.
“Our view is that our members, when reviewing their procedures, must continue to look for further opportunities to highlight some of the more important conditions and consequences.
“This is to ensure that a customer has had adequate opportunity to familiarise themselves with the consequences of a transgression of their car-rental conditions.”
The association advises consumers to pay attention to the following when renting a car:
Review the rental terms and conditions in advance of collecting the vehicle (these will be available on the member’s website).
When considering the daily rental rate offered for your preferred vehicle, as a minimum, always check the applicable liability due in the event of damage or theft (this will vary depending on the waiver selected).
Take note of the applicable daily kilometres.
Pay attention to any exclusions that are highlighted in a special rate.
When you collect the rental vehicle, inspect it and report any damage to the company representative.
When you return the rental vehicle, ask the rental representative for a pro-forma invoice to ensure that you don’t have to pay any additional charges when you leave.
CASE IN POINT: TEMPEST PLAYS FAIR ON WEB AND IN SMALL PRINT
Michael Richardson of Cape Town had no idea of the implications of handing over his credit card when he hired a car from Tempest last November, while taking part in a squash tournament in Ekurhuleni.
“I needed to get to and from the venues so I arranged car hire at a small kiosk in the Boksburg hotel complex I was staying in. I asked for the cheapest model and deal, as I was only going to be travelling about 10km a day,” he said.
“The only question put to me was whether I wanted the ‘upgraded damage waiver’ at R15 a day, and I said I did. I was not advised of any other limitations, except that I would be liable for any traffic violations. No problem.”
He drove off in a Chevrolet Spark and parked the car outside the squash courts in the grounds of a complex in Boksburg.
“But when the sun set, the skies opened with hailstones, the likes of which we don’t see in Cape Town.”
Richardson returned to his hotel in a hail-damaged Spark.
“I completed the damage report and assumed that was the end of the matter.”
But it wasn’t. The following month he was alerted via an SMS from his bank that Tempest had debited his credit card with an amount of R4060. An SMS from Tempest, confirming this, followed.
When he contacted Tempest he was told it was “my share of the cost of repairing the car”.
That’s when he discovered how the waiver system worked.
He felt not enough was done to draw his attention to this.
Asked how Tempest disclosed the waiver issue and its implications to its clients, the company’s marketing and commercial director Mellindree Narayanasami said Richardson had accepted the super cover waiver by signing this on the form, which reduced his liability to R2000 on his chosen car group.
“Acceptance of the reduced liability does not, however, take away full responsibility for any damages.”
“This point is clearly reflected in our terms and conditions, on the website’s terms and conditions, as well as on the reverse of the rental agreement. The client also read and accepted this, reflected by his signature.”
Richardson was charged the super cover waiver amount of R3000, plus a R570 assessment fee and a claim admin fee of R490 and the invoice was posted to him.
The total cost of repairing the damage to that car was R26 700, Narayanasami said, and Richardson was only charged R4060.
“Tempest Car Hire absorbed the net loss of R22 640.”
“We understand that it’s an emotional issue and certainly no one likes to have an unaccepted amount debited off their credit card, but we draw your attention to the fact that we suffered a greater loss, and in every respect honoured Mr Richardson’s transaction… and handled it in an exemplary manner.”
Narayanasami said the company did “advise clients that a waiver does not negate all responsibility while a vehicle is in their possession”. She didn’t specify whether that advice was verbal – expressed by the agent to the renter before the keys were handed over – or merely contained in the terms and conditions on the back of the agreement and on the company’s website.
READ THE SMALL PRINT
No car rental company employee has ever discussed anything about waivers with me, other than my choice of standard or super waiver, and I hire cars often.
The companies do disclose everything on their rental agreements on the websites, so legally, they are covered. Most consumers, sadly, do not read. Very few would go on to a website, seek out the terms and conditions, and spend minutes reading them.
And at a busy rental counter, even fewer are likely to read the small print on the reverse of the form before signing.
If they did, many would probably have misgivings about the deal, given the extent of their risk. - Pretoria News