Car Hire - damage excess refund & CDW, what & why??

BlueJewel

Recently booked car hire through a website. The price included collision damage waiver (CDW). After making the booking I was emailed to say that I had not brought damage excess refund (DER) which was another £76 for the whole rental period. After asking several times (about 4) what DER was and how it differed from CDW I was still none the wiser.
Last time I hired a car back for use overseas was in 2008 and I don't remember being asked about this DER.
I was emailed this reply last:
"As it stands, if anything happens to the car you will be charged the excess (also known as own risk or deductible) of up to €1,140. As it stands, if there is any damage and you get charged any of that excess amount you would pay it out and lose that money.
If you have our cover and anything happens, you would pay the amount charged for the damage and we would refund you the amount you have paid in full, as opposed to losing the money. So it is a decision of taking the risk on the excess amount or choosing to cover it so if anything happens you will not lose the excess. "

To muddy waters I rang another car hire firm and asked them, they called their version of DER, Super CDW and is €15 per day of hire, so far more expensive.
Am really confused can anyone enlighten me on DER/SCDW and let me know if I should get this or another car hire scam??

I should say there was no mention of DER/SCDW on either website at any time when reading terms or when booking so a hidden cost (?).
Thanks

benjus

CDW is basically comprehensive car insurance, but with a high excess. When you collect the car they will reserve the excess amount from your credit card, and unreserve it when the car is returned undamaged. If there are any issues they will take some or all of the excess (and they do tend to take it all, even for minor issues).

If they do take the excess and you don't have further insurance to cover it, your only recourse is to dispute the transaction with the credit card issuer. This can work if they are taking the pish with made-up charges, but if there is actual damage to the car you will probably just have to pay up.

To get rid of the excess you can either buy top-up insurance from the car hire firm, or get 3rd party add-on insurance. See the Insurance section of this page for details: http://www.moneysavingexpert.com/travel/cheap-car-hire

apt

It is usually much cheaper to buy excess insurance from a separate company, but the car hire company will block an amount equal to the excess when you collect your car.

headpin

You also need to check on the amount of any excess. In some places, New York for example, the law requires that rental cars are hired with all insurance and that the excess is zero. There are some exclusions, but very few.

Also many other locations the excess can be zero as well. Companies make a nice earner from selling these add on insurances that are not needed or much cheaper as a stand alone policy.

The wording that you need to be wary of in the response to you are:
"up to 1140 euros" - that covers any amount from 0 to 1140. What you need to ask is exactly what is the excess on the group of car you are hiring and what the exclusions are. Exclusions often include glass, keys, wheel rims, tyres and the underbody. You can then take a view on what risk you may be exposed to.

If you do decide you want the peace of mind of covering all the excess and exclusions then a stand alone policy is the answer, not the rental company's expensive offering. A worldwide stand alone policy costs around £4 per day. European cover is cheaper. You'll pay the same for the whole rental period on a stand alone policy as for a day or two of the rental company's offering.

There are links on the site for car hire excess insurance, or otherwise just google. But shop around as there are price differences.

zagfles

Yes, they nearly all pull this con. You think you're fully covered but then find there's a massive excess, often not till you pick the car up! You're lucky they told you in advance!

Some companies will claim there's no excess, but then say tyres, underside, glass etc aren't covered, but can be for an additional premium!

As above get a separate excess insurance, eg insurance4carhire. And make sure your credit card has a sufficient limit so they can reserve the excess amount. Note that some hire companies will actually charge then refund the excess amount rather than reserving it.

BlueJewel

Right, thanks everyone for the replies. It has certainly given me a lot to think about.
I agree that understanding T&C is just not always possible even for someone like me with a few brain cells! However, it seems that I should get this damage excess refund (or whatever they call it) but shop around and take care about what it covers.

2sides2everystory - your post hints at the fact that even if I do get the extra insurance from somewhere else, I may not be covered for all the bits on the car once I get to the car hire desk in Finland - is that right?
Do you really think that there is an extortion racquet going on??

Agree some legislation would help in this area, maybe even contacting OFT?

BJ

headpin

No insurance, no matter how comprehensive or who sold by will cover 100% of anything that could happen. In particualr malicious damage by the hirer or driving under the influance, drinks and/or drugs, will void the insurance and you will end up paying.

You also need to undertsand that CDW and LDW are NOT insurances, the rental company are waiving (the W on the end) their right to claim against you for the level cover being offered. There could be an excess and there will likely be exclusions.

The stand alone policies will generally cover you for any costs the rental company hold you responsible for. However, the rental company will still normally reserve any excess or other similar sum against your credit card pending return of the hired vehicle and their inspection of it for damage and the like. If they then do decide that you have incurred their wrath, and you haven't taken out their product that covers this angst, then they will charge your card. If you have taken out a stand alone policy, you will then be able to claim this amount back from them. I have taken out these policies but fortunately have never had to claim, so I cannot say how easy or co-operative the insurer may be. But, reading reviews they seem to act as reasonably and fairly as you can expect an insurer to act. You also need to be aware that these stand alone policies do have a limit on the amount of cover provided. Often around the £3000 mark. This should though be more than adequate to cover agaist any claims by the rental company so long as you have taken their basic product that covers CDW and/or LDW apart from an excess. The other reason for these policies is that they will cover you for the normal exclusions of tyres, rims, galss, keys, underbody and the like.

If you hire a car abroad for more than two weeks in a year (either continuously or on a number of separate occassions), then I would also suggest you may find an annual stand alone policy to be more beneficial, as they are often not much more expensive than separate cover for 14 days total.

What you may be wary of is that many hire companies (especially in Spain and the Med) will say that they do not recognise the stand alaone policy and you need to take out their cover. They are pulling a fast one though. They do not have to recognise the stand alone. It is covering you not them. Theu can still charge you any excess if you have incurred it and you then claim that money back from the stand alone insurnace. Do not fall for this old chestnut. The rental comapnies, especially where I have indicated, are very good at putting the !!!! up hirers when they have just arrived after a long journey.

Also make sure, if you still have to pay anything when picking up the car, that they do not charge your card in sterling at some silly exchange rate that they will profit from. It will nearly always be better value paying in the local currency and getting the CC exchange rate, even after any loading is applied. Again, some Spanish hire companies are renown for pulling this trick too.

zagfles

2sides2everystory wrote: »

With respect, benjus, I am not sure it is a good idea to try to define CDW in 2012. There is now so much evidence of abuse of the term and using it and other official sounding acronyms to deliberately wrongfoot customers that it might be best to advise every MSE'er to pick a rental company (NOT a broker) and then very carefully check what THEIR definition is in THEIR small print. Trouble is, beyond names like Hertz, Avis, Europcar, Sixt, most punters don't know the difference between an actual rental company and a mere broker. I hate having to suggest that MSE'ers need to check Ts and Cs because very few have the necessary skills to interpret them, but seriously, this perennial car rental rip off thing has evolved into an absolute and very dangerous minefield. It is crying out for total regulatory reform.

And zagfles, how confident are you that "separate excess insurance" actually dovetails with every rental company's terms? You can't be anywhere near 100% confident. I have already warned recently in these forums that some rental companies are laying enormous risks back on the punters which are unlikely to be items covered by insurance4carhire or any other such company e.g. engine damage. And even if the damage IS the type covered by personal "separate excess insurance" policies the normal limits of such policies are not high enough to cover the spurious limits offloaded back onto punters when you refuse their own "insurance".

You're right in that it's getting a complete nightmare, I tend to use the big names who do tend to have reasonable T&Cs. Excluding engine damage is ridiculous. Last problem I had was with Hertz where the clutch went - this was 2 years ago - I had excess insurance through insurance4carhire but didn't need it as Hertz didn't charge anything, as they shouldn't, and recovered us about 100 miles to where we were staying, and got me a new car the next day. Only whinge was they charged me for the half tank of petrol I'd used in the first hire car at a rate well in excess of the garage rate.

Manninagh

2 sides2everystory, I'm very intereseted in your link to Herts ' Term & Conditions, but am unable to come up with a link to Hertz at Orlando airport.

Any chance of pointing me in the right directions, thanks.

zagfles

2sides2everystory wrote: »

All good so far. Then try changing the location - look at the same page for say 'AGP' (Malaga Airport). Some 'orrible numbers appear.

The numbers on the left are if you don't take CDW - this is usually the full value of the car. Excess insurance is for CDW excesses - ie the number on the right. These are well within the usual limits for typical excess insurances like insurance4carhire. Just checked their website and their limit is £4000, the max CDW excess in that list is EUR2100.

Every car hire I've ever booked has had CDW included in the price, I think it's mainly corporate hires which don't include CDW as companies often have their own insurance.

nickyboyfloyd

I'm going to Orlando next month with Thomsons and the holiday package includes free car hire with Alamo. Last went about 5 years ago and still remember the feeling of getting stung for about £300 for 2 weeks insurance upon arrival (I insure my own car at home for a year for less than that). Reading the smallprint, I can see that only "Liability cover with 3rd party protection to $20k" is included. Presumably I won't be allowed to drive away from the airport without at least adding CDW and some sort of excess waiver? Thompsons helpfully offer me an upgrade to include CDW, the above protection to $1m and taxes/airport fees, all for only £19 per day (£266). A direct search of Alomo's website suggests I could get the above cover (oh, and the car of course) for £234. Makes me wonder whether it would be prefereable to ignore the free car included in the holiday package and go directly to a Car Hire company. I'm not sure whether to consider this or go for a standalone policy but either way, I don't want my holiday spoiling with a £300 bill for a 'free' car at the outset. Can anyone help me?