Taxes and Airport Surcharges
Sales tax and airport charges vary considerably from state to state and from country to country. Unfortunately, you probably can't avoid state and local sales taxes -- or the European equivalent, the value-added tax (VAT), which can be as high as 25 percent. (Note that in some countries you may be entitled to a partial refund of the VAT.) Many local governments also charge fees to fund their own development projects, such as convention centers or sports stadiums.
However, you may be able to avoid the airport charges -- such as concession recovery fees, customer facility charges and the like -- by picking up and dropping off your car at a non-airport location. Be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location -- which can total 10 percent or more of your total price.
Editor's Note: We recently got an email from a reader wondering whether the airport concession fee could be avoided by not picking up your rental car as soon as you get off the plane. If the reader went to his hotel first and then returned to a rental location near the airport to pick up his car, would he still have to pay the fee?
According to Neil Abrams, founder of Abrams Consulting. a car rental consulting and travel market research organization, the answer is yes. "If the rental location is at the airport, the rental agency is contractually required to pay the concession fee to the airport," Abrams says -- no matter whether the renter is a local or has just flown into town that day. The same generally applies to near-airport rental locations, though he notes that the fees and requirements for these properties may vary from airport to airport.
The bottom line? If you don't want to pay the airport concession fee, check out your rental options downtown.
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One of the most common extra charges is for insurance, often referred to by rental companies as Collision Damage or Loss Damage Waiver (CDW or LDW). For an extra $10 - $30 a day, you can avoid liability for any damage to the vehicle, provided you're not found guilty of gross negligence. Insurance is optional in most U.S. states, although in a few states (and some foreign countries) it is compulsory and built into the basic car rental cost.
Before you purchase the extra insurance, check to see if your regular car insurance covers you in a rental car. Most policies do, at least for domestic rentals. Many credit cards also provide insurance if you pay for your rental with that card. Keep in mind that limitations may apply to both types of coverage, and that an accident in a rental car may affect the rates on your existing car insurance policy. If you're not comfortable with the risk, purchasing the extra insurance may be worth it.
Other optional insurance coverages include Personal Accident Insurance (PAI), Personal Effects Coverage (PEC)
and Additional Liability Insurance (ALI), which you can purchase from the rental company. Again, your best bet is to check your existing policy to see whether you're comfortable with the coverage you already have.
You will often pay a high premium for returning a car with an empty tank, so you'll probably want to fill up before you return your vehicle. However, most car rental companies now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish.
Note that there is no refund for unused fuel, so you'll likely be paying a little extra for the convenience of skipping the trip to the gas station. Also, you may be able to find a better per-gallon price by shopping around on your own.
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An extra fee may be charged if a car is returned to a different location than where it was picked up. This fee varies by location and distance. In some instances there is no charge specified, but instead the base rate will be higher than it would for a rental that picks up and drops off in the same location.
The 24-Hour Clock
Early Return Fees
Most major rental car companies allow for unlimited mileage within the same state or country, but it's a good idea to double-check before you reserve a car. Many smaller, local companies charge mileage if you exceed a given daily allotment. Another caveat: Some "special" rates may not include unlimited mileage, so be sure to read the fine print.
Some states allow car rental companies to charge extra to recover the costs of licensing their cars. You may not be told about this fee in advance, so make sure to ask.
Varying Rates and Peak Season Surcharges
Rental car companies' rates vary a great deal from city to city, and sometimes even within the same city. Make sure to shop around. Be aware that you may pay a specific surcharge for traveling at a "peak" time.
Frequent Flier Fees
Car rental companies often charge a small fee when you request frequent flier miles for your rental. The fee varies by airline.
Many of the above charges, including airport fees, underage driver surcharges and local taxes, also apply to international rentals. There are also many country-specific fees and charges to keep an eye out for. For example, theft insurance and CDW are mandatory in Italy, and there are highway charges for cars driven in Austria or Switzerland; you'll need to purchase a sticker to avoid paying a fine.
If you don't have an international driving permit, you may also have to pay for a temporary permit, which can cost $10 to $20 or more. For more on international driving permits, see International Car Rental Tips .
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