Paying up front for rental car nicks and scratches

by Christopher Elliott on October 27, 2010

The late-model Chevrolet that Sukumar Thanawala rented from Thrifty Car Rental in Munich in the spring looked “absolutely fine” when he returned it, he said.

But a few weeks later, Thanawala, a software designer from Naperville, Ill., noticed that the rental agency hadn’t refunded his $763 deposit. When he asked why, Thrifty furnished him with a photo of a barely visible nick on the car door and a small scratch on one bumper. “You have to look really hard to find it,” Thanawala said.

Thrifty had done what by some accounts is becoming more common when a rental car is damaged: It had pocketed his deposit.

Randy Harris, president of Khoury Alternative Claims Management, a San Antonio company that handles damage claims for car rental companies, says that charging customers immediately for damages used to be rare. “The only time that I have seen it is when a car rental company knows the claim is going to be above the renter’s insurance deductible,” he said.

Even then, the standard operating procedure – at least until now – has been to ask renters whether they want to settle the damages. “It’s something they would agree to, and the claim would be settled on the spot,” explains Robert Barton, president of the American Car Rental Association, a trade group.

But what if there’s no agreement? Consider what happened to Carri Schoeller, a real estate agent from Orlando, when she recently returned a rental car to Enterprise in Phoenix. A representative “eagerly went around the car like Sherlock Holmes” looking for damage, Schoeller said, and found a few scratches that she maintains were pre-existing.

“We were hauled over to the processing office and our $256 bill jumped to $772 – of course, taken from our credit card without our authorization,” she said.

The car rental industry’s aggressive position on damages makes some sense: A badly scratched or dented car can’t be rented and doesn’t hold its value when a company tries to sell it. But many customers charge that damage claims are a source of profits to car rental companies, which ding them for normal wear and tear and even when the evidence that they caused the damage is circumstantial at best.

I’ve been fielding a high number of queries from travelers about bogus damage claims. In the past, it’s been relatively easy to fix these problems, because car rental companies waited until they received a damage estimate, repaired the car and calculated their loss of use before presenting a customer with a bill.

Unless a company could prove that a customer had harmed a car, travelers simply refused to pay. Charging the customer immediately takes away that leverage.

Kathleen Hernandez, a spokeswoman for Thrifty, said some domestic and international locations now keep an additional charge slip in case one of their cars is damaged, which is what happened to Thanawala. “In the event there is damage to the vehicle, the location retains the deposit until they are able to get an estimate on the damage repairs,” she said.

Although she said the damage to Thanawala’s car had been properly documented, Thrifty agreed to refund his deposit.

Enterprise typically asks customers who don’t buy its damage waiver but return a damaged rental vehicle whether they want to pay their insurance deductible. “We offer this as an option for customers who prefer to immediately take care of that portion of the claim,” said Laura Bryant, an Enterprise spokeswoman. “And only with their authorization.”

But if customers are unsure about their deductible or want to see an estimate or an invoice, the company’s practice is to bill them later for damages. Enterprise dropped its claim against Schoeller and refunded the $500 it had charged her in apparent violation of its own policy.

You don’t have to be a consumer advocate to know that car rental agencies shouldn’t ask customers to pay for dings and dents without knowing how much the repair will cost. Or that customers should refuse to pay until they see an invoice from the body shop. But it might help to know that if you’re ever stuck with a charge on your card that you didn’t authorize, you can – and should – formally dispute the bill.

If you damage a car, you should pay for it. But all in good time.

(Photo: darren 131/Flickr Creative Commons)

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  • edward rudow

    i now make it a habit of photographing the car at the time of rental and on return . I also take a pictire of the location and time stamp the photos

  • Lyn G

    Taking pictures of a rental car is a good idea for gross damage, but are you going to photograph every square inch with a macro lense to document any small dings or scratches? Why not take out supplemental insurance from the credit card company you’re renting with? I take the AMEX car rental insurance coverage which adds a flat $18 to the entire rental (no matter how long you have the car), covers me for $100,000 in damage, is primary, has no deductible, and most importantly, they handle everything. It even works with foreign rentals, although you have to call them and get the coverage extended for international use. I have only had to use it one time, and when AMEX took over, the car rental company backed down. I don’t know if the other major cards like Visa and MC offer this but it is certainly worth looking into.

  • Robert

    I wonder how many times the same small scratch is found upon inspection when a car is returned and then different renters get billed for the ding that never gets repaired?

  • W.M.

    I typicaly rent from Alamo/National, and have never had a problem. However, on a recent business trip to Syracuse, NY, I had a rental through Enterprise. Upon return, the agent walked walked around the car, carefully surveying it, until he found a small dent that frankly was only visible if you looked at it just right. It surely was present when we picked the car up. He started to make a big deal of it until he realized that the corporate agreement we rented the car through fully covered all damage. They were clearly fishing, and I bet they’ll try to hit the next renter for the same dent. I have a feeling that they probably get paid several times for some scratches, as you know they aren’t fixing them.

    I’ll be staying away from Enterprise for my leisure rentals.

  • DaveS

    Enterprise tried to charge me for a small scratch I knew I wasn’t responsible for. I simply said no, and the agent went back to his computer and said, what do you know, the scratch had already been there before and someone failed to note it. Right. Due to my business, I have to use that location sometimes, but now I always take my time before taking the car and always tell the agent that not long ago they tried to charge me at this location for damage I didn’t do. I really rent cars just as rarely as possible now (cut down my rentals at that location from 12 to 3 last year), and I wonder if they don’t realize their tactics are keeping customers away.

  • Nigel Appleby

    About 10 years ago I rented a Ford Explorer and had the misfortune to collect a stone through a light. The cost was below my damage deductible so was billed to my credit card about 3 months later. I don’t have a complaint about that as it was with my agreement, but I have always wondered how many other renters paid for it as well in that 3 months.

  • Aglaia761

    As a frequent traveler, I’m constantly renting cars. I go over every car with fine toothed comb and note each and every ding and scratch. Typically there is not enough space to list each and every ding on the rental agreement, so I just bring a notebook and have the rental agent sign, print, and date it.

    I also take pictures of the major dents and dings and make sure they’re time stamped.

    for those of you who are members of rewards clubs and don’t have to hit the counter. there is usually an agent inside the facility who handles returning cars or you can request that the agent at the gate come out and verify.

    It takes an extra 10-15 min at most and is worth it to save thousands of dollars in false charges

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