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Hiring a car can be a great way to get around on holiday, but if you're not careful the extra costs on car hire contracts can drive you to distraction.
So how do you go about getting the best deal?
Shop around
It's much cheaper to shop around and book a car in advance than when you arrive at the airport. Hertz, for example, charges a basic price of £239.05 if you pre-book a Ford Fiesta for a week in Ibiza but £262.44 if you leave it until you get to the airport.
In some destinations pre-booking is essential, otherwise you might turn up to find it's impossible to hire a car at all, let alone at a reasonable price.
Brokers and comparison sites such as Travelsupermarket and AutosAbroad.com can help you find and book the cheapest deal.
On arrival
When you arrive, insist on getting what you paid for. Many car hire firms will try and talk you into upgrading to a better car (for an extra cost, of course) or will attempt to give you an inferior car you didn't order.
If you don't get what you paid for, then the car hire firm is breaching the contract and you're entitled to claim back the difference in cost between the car you booked and the one you end up with.
Before you drive away, check the car thoroughly. If you find any damage, no matter how small, mark it on the car diagram with the contract and get a salesperson's signature agreeing to the damage.
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Excess
One of the biggest problems holidaymakers have with car hire firms is the level of excess they have to pay in the event of any damage to the car while it's in their possession. Forget the £200 or so that's standard on a car insurance policy - excesses on hire cars can be shocking: £500 or £600 is standard but you can fork out up to £1,000 on some models.
And don't expect the car hire firms to be particularly forthcoming about the level of excess either; researching excess levels for this article took more time than you'd expect.
Collision damage waivers
To reduce the amount you'd have to pay in the event of a claim, car hire firms offer something called a "collision damage waiver" (or CDW), either included in the price you're quoted or priced separately. From the name you might think this would waive your liability in the event of an accident. Think again.
If you hire a Mercedes S350 CDI through Hertz, the price includes a CDW, but you'd still have to pay up to £974 in the event of a claim. Opt out of the CDW and you could have to pay for the full value of the car - £48,000 or so - in the event of an accident.
To reduce the excess further, Hertz offers "super cover". However, you can only buy this when you arrive at your destination and there are no prices quoted online. This makes shopping around in advance tricky to say the least.
Other hire car companies use similar tactics and may refer to the extra cover as "super collision damage waiver" or "damage excess insurance". But don't assume this extra cover will get you out of paying anything if the car's damaged in your possession.
If you read the small print you're likely to find that this won't cover damage to certain parts of the car, such as tyres, windscreen or lost keys.
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Excess insurance
Research by protectyourbubble.com found that, for a standard four-door Ford Focus hired for a week in Europe, Hertz would charge £109.24 for super cover, bringing the driver's liability down to zero.
Rival Avis charges customers £108.50 for seven days' excess insurance. However, unlike Hertz, Avis' cover only reduced the excess from £850 to £100.
An alternative is to buy a separate policy before you go that will cover excess payments plus damage to parts of the car not covered by the car hire firm's policy. Protectyourbubble.com charges £3.02 per day or £21.14 for a standard seven-day car hire in the UK and Europe.
Fuel
Different car hire firms have different policies regarding fuel, so make sure you know what you're agreeing to. In some cases you'll be expected to return the car with a full tank. Fail to do so and they could charge you well over the odds to fill it up again.
If you need to return the car with a full tank, check where the nearest petrol station is to the car hire return depot. And of course, find out if your car runs on petrol or diesel - get that wrong and you'll be charged for any repairs needed as a result.
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Extras
Watch out for extra charges on car hire contracts too. If you need a baby or child seat you'll need to pay more; €21 a week if you're hiring a car in Ibiza with HolidayAutos, for example. A satnav will set you back €21 a week too, as will adding an extra driver.
All this is assuming you're aged above 21. Some car hire firms won't hire to drivers under 21 - or even 25. Holiday Autos requires drivers to be 21, but they'll pay more than drivers aged 22 and over. As an example, hiring a Ford Ka in Ibiza for a week will cost £255 for a 21-year-old, compared to £170 for drivers above that age.
Extras cost more for young drivers too - €74.97 a week for a child seat or €97.58 a week for a satnav with Holiday Autos.
Returning the car
Most car rental agreements are made on a daily or 24-hour hire basis. Therefore returning your car late may add an extra day's rental to your bill. Check the time you have to return the car and make sure you're back before then.
On returning the car, wait while staff inspect it, then ask for a copy of the final report. If there's nobody there to inspect it, or if they don't have time, note this on the rental agreement.
When you hire a car, you'll be asked to leave your credit card details so the car hire company can bill you for any extras incurred. Many people hand back their rental car at the airport only to find a few weeks later that their credit card has been stung with hundreds of pounds in extra charges they knew nothing about.
Don't be afraid to challenge these charges if you think they're unfair. For example, ask for evidence of how much repairs cost. Some firms will try and bill you hundreds of pounds for a chipped windscreen or small scratch.
Related links
What to do with unused travel money
How to find the cheapest flights
Work out exchange rates using our currency converter
