New rules mean clearer fees for car hire customers
The topic of car hire fees can keep financial journalists and regulators alike very busy, and in 2014 the Competition and Markets Authority (CMA) put improving the situation for UK consumers at the top of their agenda.
One of the biggest areas of complaint came from younger hirers who turned up at the desk believing they had already paid for their car hire in full, only to be told that they were required to pay extra fees for fuel, that there was an additional charge as they were under 25, or to be informed that they ‘needed’ to buy extra insurance as the cover they had included wasn't sufficient to cover a whole multitude of possible holiday ruining costs.
The CMA’s initial step was to approach the larger car hire companies operating in the UK, (Avis, Budget, Enterprise, Europcar, Hertz and Sixt) and to demand these companies alter the way they displayed the full cost of car hire for their customers.
This year they are moving on a stage further, and have implemented a string of changes to be taken on by both car hire brokers and comparison services (which amalgamate prices from a series of hire companies and brokers) About half of all holiday car hires are booked through these types of companies so the CMA wants to be certain there is clear information for consumers in these following areas.
The comparison service firms now need to make sure that the price shown includes the following so called ‘mandatory’, or unavoidable fees:
• Young driver surcharges
• One way fees
• Fuel charges
And car hire brokers must, in addition to the above, ensure they deliver full information to the customer covering:
• Excesses and the cost of reducing or removing them
• Pre-authorisation or deposit levels
• Exclusions from the Collision Damage Waiver policy
• Winterisation fees (snow chains, winter tyres)
The new rules came into effect on the 1st January this year, and sites should now be operating with these changes in place. It is however a reasonable assessment that this is a huge change for an industry that includes not just the 6 big players of the industry but also tens of thousands of rental firms from all across the globe who need to ensure that they are meeting local legislation as well as the regulations set out by the CMA.
With so many changes to implement, it could be a while before all companies have everything is in place. The good news for Clarify customers is that we are way ahead with these changes. A quote with Clarify Car Hire will already include all of these fees listed above giving our customers a more accurate cost of their car hire .
An example of frustration felt by hirers is young drivers'fees. Many brokers neglect to ask drivers' ages, therefore they omit young drivers fees for those who are due to pay them on the basis they were not aware it was relevant. Others have chosen to cease offering one way rentals or any choices other than a Full to Full fuel policy to save them the hassle of reprogramming their systems to accommodate other options. This has the result of diminishing the alternatives open to consumers rather than enhancing the situation for users.
Clarify Car Hire quotes will also take into consideration other fees which are not yet under the focus of the CMA. Out of hours fees for those arriving late at night or after opening hours, or mandatory insurance fees for drivers over 70 (a common practice in Spain) are examples of fees that do not fall within the CMA’s guidelines at present but are included within Clarify Car Hire prices.
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