Pricewatch Q&A: All you need to know about hiring a car abroad

I am off on my holidays and will probably rent a car but don't want to be ripped off. Any tips?
Loads of them. The first tip is ask yourself do you really need to rent a car while you're away? The best way to make sure you're not ripped off by some dodgy car hire company is don't rent a car. If you pick a destination where car hire is superfluous and use public transport instead, you will save money – if not always stress. If you need to go on day trips, hire a car for a couple of days in the middle of your holiday rather than for the duration. If you hire a car for three days of a two-week holiday, you will save yourself at least €300.

Ah no, I need a car.
Okay, if you insist, but don't book at the last minute or even in the last two weeks before you need it. It really is a supply-led business and if you arrive at any airport and expect to get a car on the cheap you can dream on. Remember to always choose a diesel car, particularly if you plan to cover long distances.

Anything else?
Of course. You pay a premium for airport pick-ups so if you collect the car elsewhere you will save yourself a few bob. And never forget to be suspicious of upgrade offers – what might sound free might come with a fee. And look long and hard at what you are given. You might be in a hurry to get on the road but don't sign any damage form until you have actually looked at the car and if you see so much as a scratch, point it out to the agent and photograph it. Otherwise, being careless at the outset could end up costing you a packet at the end of your holiday.

I have heard talk of excesses. What do I need to know on that score?
When you rent a car you have some insurance as a matter of course but it is limited and excesses apply, sometimes excessively. Depending on the company and the deal you do, you could be signing a contract to pay the first €500 of damage done to a car or as much as €2,000 if you do a bad deal.

That's a fairly big gap?
 It really is. And companies use the big numbers to flog insurance. This is sometimes called car-hire excess and sometimes it is referred to as "collision damage waiver" or even "super collision damage waiver". It sounds sensible. It will protect you from having to pay the first part of any claim if your hire car is damaged or stolen.

Well that sounds smart?
No, it's not. In fact, it is one of the most costly traps set by car-hire companies and the one you will need to watch out for when you arrive at a rental desk – particularly when overseas and particularly if the journey from here to there has been particularly arduous. This is the moment when you will be at your most vulnerable. You might be hot, tired and stressed. You might have children hanging out of you and if you have been slow to get off the plane the queue might be long. So you get to the pick-up desk. When you get there the staff member hits you with the hard sell. They do this because they are on commission and the insurance can cost up to €30 a day – which quickly turns into over €400 over the course of a two-week holiday.

But do I not need excess cover?
It certainly is no harm to have it but it can be bought for much less. In fact, you can buy a whole year's worth of collision damage waiver insurance for less than €60. We asked a number of experts and the Allianz annual policy at €57.50 was highly recommended. And you don't need to have an existing policy with the company.

But these car-hire companies are reputable multinationals. Surely they are not ripping people off?
Some might say reputable multinational is oxymoronic. Car-hire companies have been accused of ripping off customers for decades. This summer, the main companies who do business across Europe all but conceded that there was truth to the accusations. A Europe-wide consumer watchdog review saw Hertz, Avis, Budget, Enterprise Rent-A-Car, Europcar and Sixt agreeing to introduce improvements to areas that frequently lead to complaints.

Such as?
The areas they agreed to look at were less- than-transparent pricing information, high-pressure sales tactics directed at confused consumers, fuel policies and damage inspections.

What do you mean by less than-transparent-pricing?
Frequently, the headline price seems very attractive so you decide on a certain company only to find out that compulsory charges are added towards the end of the booking process or worse still at the pick-up desk.

What else?
The companies have also pledged to do something about a "lack of transparency and potential unfairness" of fuel policies. The worst companies make drivers pay up front for a full tank of fuel and insist they return the car empty. This means you end up paying exorbitant prices for the fuel and then – unless you can return the car with a tank full of nothing but fumes – gift the company fuel at the end of the process.

Anything else?
Yes. Another way consumers are routinely ripped off is in the assessment of damage they are then charged for. All too often car-hire companies have been accused of charging for damage that renters insist they did not cause. They can do this because they have your credit card details and we have heard of multiple cases where money is taken from people's cards without warning after they have returned home. In circumstances such as this the chances of getting redress are very small.

So everything is okay now?
No, not really. The agreement reached will apply across the EU but the improvements will not be introduced before the end of the summer and a few of the measures that will be put in place will take at least six months. So the improved transparency when making a website booking and better information at the booking stage about optional waiver and insurance products and more transparent fuel policies and more upfront information about how pre- and post-rental vehicle inspections work, and better information on websites about local traffic rules and regulations in rental countries is still some way off.