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Renting a car on holidays? How to ensure you’re paying the best price and not being gouged

On The Money: With rental car prices across Europe set to remain high, we look at ways to lessen the burden

With the holiday season upon us, many people’s minds will turn to car hire in the days and weeks ahead. File photograph: iStock

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Conor Pope
Fri May 26 2023 - 06:00

With the holiday season upon us, many people’s minds will turn to car hire in the days and weeks ahead.

The good news is that we are unlikely to see the dramatic price spikes that were recorded for car hire services all over Europe last summer as the industry struggled to cope with a post-Covid bounce.

The bad news is that prices are going to be higher than they were.

According to British consumer watchdog Which?, holiday-makers can expect to pay at least 50 per cent more for a car in the main holiday destinations across Europe this summer when compared with 2019.

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That means a modest family car for two weeks in July or August could cost anywhere between €700 and well in excess of €1,500 depending on the destination and the demand at any particular time.

The basic laws of supply and demand are behind much of the price spiral.

Car hire companies all over the world have faced enormous difficulties trying to restock their fleets due to an ongoing semi-conductor shortage which has meant car-makers worldwide have been obliged to slow or halt production of some models.

Car-makers have also steered their business in the direction of individual consumers rather than bulk-buying rental firms in order to maximise profits.

In times past, rental firms could order vehicles in bulk and avail of substantial discounts, but it is a seller’s market, and they are suddenly the manufacturers’ least attractive market.

So what can people do to ensure they are paying the best possible price in the weeks ahead and not being gouged?

The first question people should ask is if they need a car. Many people go for rentals as much out of habit as necessity and when things were cheap that might have been okay.

But if the car isn’t going to get much use, a suddenly wildly expensive rental might spend much of its time in your company sitting idle outside your hotel, apartment, caravan or tent while you spend your days splashing about in the pool or sea.

So before you do anything else, check to see if the place you are going has a decent supply of taxis and public transport. If you do a bit of research and learn how to use public transport in other countries, you could save yourself a fortune. A visit to wikivoyage.com will tell you virtually everything you need to know about the transport options in your destination.

If you do need a car, ask yourself: do you need it for the whole holiday? A car booked for a week of a fortnight break would allow you to do the big shop and visit the key sites and water parks or wherever else you’d like to explore, after which you could return to the more docile life of a holiday-maker.

By reducing the length of time you hire a car for, you will obviously save money on the actual hire but you might also find a better deal is on the table.

Picking up a car at an airport comes at a cost. Even if the companies involved wanted to cut a deal, it would be difficult as airports impose a surcharge on them, so if you hire a car in a town away from an airport you can expect to pay as much as 30 per cent less.

Remember when booking, shopping around is essential.

Don’t just go to the big companies whose names you recognise. Check aggregators like skyscanner.ie. It searches dozens of car hire companies as well as brokers and travel agents and allows you to filter the search results based on fuel policy, air conditioning, transmission, pick-up, car size and a lot more. Small brokers can cost less.

Check out the big players’ websites too however – they frequently have deals that can’t be topped.

You can also think about the type of car you need. In times past you might have just hired the big car with the big boot. By getting a smaller one you can save a lot of money. The journeys may not be as comfortable but you will save money.

Book as far ahead as possible for the best deal. Make sure you get a copy of the terms and conditions. And don’t just look at the bottom line - check the cost of extras you might need. There can be huge discrepancies in the cost of a booster seat, additional driver cover, and so on.

Avoid companies with a full-to-empty fuel policy if at all possible. They make you pay for a full tank of petrol and return the car empty. They will charge you twice the price of petrol at garages nearby and you will rarely get to use all the fuel you pay for. The best hire companies give a full-to-full option.

Insurance

When picking up the car, you will almost certainly be asked if you want extra insurance.

Think hard before taking out super collision damage waiver insurance. Typically the cost of car rental includes insurance cover for major incidents, but consumers have to pick up the tab for minor ones.

Depending on the car hire company and the contract in place, a holiday-maker could be liable to pay the first €500 of damage done to a car, or as much as €2,000.

But excess insurance can cost almost €30 per day which, in some instances, can be more than the actual car hire. Instead of buying super collision damage waiver insurance in an airport, take out an annual policy at home that offers full cover with an Irish insurance company.

Ask about the rental firm’s procedures in the event of a breakdown and make sure you put the emergency number in to your phone.

Don’t forget to check the clutch. How do you do this? Just put the car in fourth gear, depress the clutch and slowly let it out while stepping on the accelerator. If it releases fully without the vehicle stalling, there is likely to be a problem. Make sure it’s not your problem by asking for a different car.

Make sure you have enough capacity on your credit card to stand a hefty deposit. Companies will either freeze €1,000 or take it before refunding it when you give the car back.

Return the car when the rental company is open and have it inspected by an employee who looks competent.

If you have to return the car outside working hours, take pictures of the car when it has been parked in the designated area. Mail the pictures to yourself.

And remember to keep an eye on your credit card to ensure that no sneaky charges are added in the days and weeks after you get home.

You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.