Hertz Rental Car

Renting a car is a lot like buying one: You know you're going to get taken advantage of, you just don't know how badly.

Last week, my wife relearned this painful lesson when a rental car associate transformed her $19.87-a-day online rental into $52.77-a-day package.

Here's how to avoid a similar fate -- and save as much as 66% off your next rental.

1. Shop Around the Right Way

Even though the rental car market is competitive, there's a wide range of rates in the industry.
All else equal, I found a $100 difference between renting a compact car at my local airport from Hertz Global Holdings (HTZ) for a four-day weekend versus Advantage -- never mind that Hertz owns Advantage.

Generally speaking, the least expensive car rental companies have value-oriented names. On the cheap side of the spectrum are companies like Budget (a subsidiary of Avis Budget Group (CAR)), Dollar (a subsidiary of Dollar Thrifty (DTG)), and Advantage. On the other end are Hertz, Avis, and National. The average price difference between these groups was nearly $67 -- or 23%.

While you can catch this by using an Internet aggregator like Priceline.com, Expedia, or Orbitz Worldwide, there is one glitch: These sites often do not compare add-ons like insurance and GPS devices. In the case of Hertz and Advantage, for example, I found the difference in price between comparable insurance policies was 40%.

2. Steer Clear of the Airport When You Pick Up a Car

Rental car companies do most of their business, and therefore make most of their money, from airport locations.

From the renter's perspective, however, renting cars at the airport involves a variety of additional taxes and fees -- not to mention, some companies charge more for the cars themselves if rented at the airport.

Here in Portland, Ore., the so-called airport concession fee alone ranges from $15 to over $30 for a weekend rental.

Although it's obvious that the best way to avoid this is to rent at a non-airport location, what isn't as clear is how much you can save by doing so. In my research, it chopped an average of $100 off a four-day rental. And in one case, the price dropped an astounding $160!

3. Refuse Any and All Add-Ons

The biggest opportunity to save on a rental car is to refuse any add-ons that increase the overall price.

A closely watched metric in the industry is the so-called "revenue per transaction day," or RPD, which measures the average daily rate customers pay to rent a vehicle. The objective, of course, is to grow it, and the easiest way to do so is by selling customers things like insurance contracts and navigation systems -- notably, items that aren't captured by the travel websites.

The best way to combat this is simply to say "no" when pushed to add anything else on, particularly insurance.

According to NerdWallet.com, a popular personal finance and credit card comparison website: "Not only does your primary insurance company often step in ... [but] Visa, MasterCard, American Express, and Discover all provide rental car insurance above and beyond what your primary insurer and rental company will offer."

In other words, buying insurance from a rental car company is effectively the same thing as flushing money down the toilet. And at $23.61 a day for the typical loss damage waiver, you better get your plunger out.

Was That Really 66% Savings? Yes, It Was

The title of this article promises to show you how to save up to 66% on your next car rental. Although that number sounds crazy, what's truly shocking is how easy it was to do so. Namely, by choosing the least expensive non-airport option and refusing the loss damage waiver, the daily price of a rental car here in Portland went from a whopping $93 a day down to just $31 a day. Not bad for a few extra minutes of work.

Motley Fool contributing writer John Maxfield does not have a financial position in any of the companies mentioned above. The Motley Fool owns shares of Hertz Global Holdings, McDonald's, and Priceline.com. Motley Fool newsletter services have recommended buying shares of Priceline.com.

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Read the fine print on your credit card if they cover you for rental insurance and you decline the insurance. If you get into an accident and the rental car you rented is in the shop for lets say 30 days. The rental company can charge you loss of revenue on that vehicle you rented for not making them money. They will charge you at the highest rate. Every state has different laws. Before you decline call your credit card company first.

July 17 2012 at 11:56 PM Report abuse rate up rate down Reply

Here's what I do. When I plan a trip I reserve a car, usually Dollar. Then the day before the trip I go back to the web site and they will have too many of some type of car and it will be deeply discounted, like half as much. Make a new reservation and cancel the first one. Money saved. If you get a renter membership card for the company, you can pre specify what you are willing to purchase in the way of extra fees. When I fly into Vegas, Dollar has a car waiting for me with my paperwork hanging off the mirror. I never talk to a sales person.

July 17 2012 at 6:30 PM Report abuse rate up rate down Reply

I had to read this article with amusement. Shop around, the author writes! That's very good advice, except here in northeastern Vermont, there is exactly one car rental agency in the village where I live, so it isn't like I have much choice in the matter if I need to rent a car! It's funny how so many people don't realize that not everyone lives in a major metropolitan area. A lot of people live in small country towns that don't offer much except for peace and quiet and no screeching horns or traffic jams!

July 17 2012 at 5:18 PM Report abuse rate up rate down Reply

People forget one thing - if you have an accident, the daily rental cost keeps going day after day if you do not have at least the collision insurance. It's called loss of revenue and goes on and on until the car is repaired. It can take a week just to get the car to the repair shop. Buy the collision insurance - if you have it, you just sign an walk away.

July 17 2012 at 10:28 AM Report abuse rate up rate down Reply
Lt Dan

I always take out the max on insurance because I plan on trashing that whipping horse into the the ground.

July 16 2012 at 10:49 PM Report abuse rate up rate down Reply

After working in the rental industry for over 15 years I will always take, at least CDW (collision waiver), this is actually the best add on if you drive a car you do not own. I`m disappointed in the author of this article, by saying you should refuse all add on`s, he is not taking in consideration that you might need some of these options if you are not covered by your own insurance and I can tell you for sure there are plenty on insurance companies and their policies which will not cover you in a rental. Always check before renting, never assume it will. If it does, you are still on the hook for your deductible.

July 16 2012 at 7:13 PM Report abuse rate up rate down Reply

I never buy the add on or insurance. Except in Las Vegas, I do buy the insurance, in the state of Nevada they charge you for the cost of rental while the car is getting repaired (so they say). Unfortunately I have to travel farther than the strip otherwise I would just cab it. I have excellent insurance coverage, and my credit card covers any damage. And every rental company said that insurance will not pay for car rental while getting repaired, and if you ever noticed, those are some messed up cars in that airport. Does anyone know different? I also take a picture whenever I drop the car off.

July 16 2012 at 6:24 PM Report abuse rate up rate down Reply

shop around,let your fingers do it on the key board.differant days of the week have differant rates.rent your needs.

July 16 2012 at 5:33 PM Report abuse rate up rate down Reply

There is nothing in this story that can helped me as a consumer when renting a car.As a matter of fact, if I followed your advice and not what I already know,my rental fees may be higher than ever.For one thing you mention Hertz,why not mention that Hertz and Budget have the highest fees when it comes to rentals, at and not at the airport.Another reporter who turns in a expense account and his/her employer pays the rental fee.

July 16 2012 at 3:33 PM Report abuse rate up rate down Reply

Also avoid renting at the rental office at a resort; I walked 1 block from the Del Coronado and got a rental at 1/2 the price. I generally take the sucker insurance outside the US because the problems of settling on a damaged vechile can be huge.

July 16 2012 at 3:00 PM Report abuse rate up rate down Reply