Ed Perkins points to the deceitful but unfortunately effective practice of insurance upselling by front-desk employees at car rental agencies.
Agents told [customers] that although their [credit] cards covered damage to the vehicle, they didn’t cover the additional “loss of use” fee the car company would collect for the rental revenue lost while a damaged car was out of service. That statement is a flat-out lie.
Loss of use is included in the CDW (collision damage waiver) provision of credit card coverage. If your card has rental car insurance built in, then you should be fine. (Check your card’s fine print to see if you have the coverage in the first place, of course. If you don’t have the rules governing your card’s benefits, call your bank and have them send it. If you don’t have the coverage, get a card that does.)
This “loss of use” story is a sales pitch I’ve gotten before at the time of rental, most memorably and insistently from a desk agent at Advantage Rent-a-Car at the Phoenix airport. I’ll never forget that guy. He kept telling me over and over again how much Advantage charges for “loss of use,” and how neither my own auto insurance nor my credit card would cover it. It was his aggressive hard-sell, and the snotty attitude he copped after I declined his coverage again and again, which cemented my policy to never rent from Advantage ever again.
Bottom line: Never trust a car rental agent to tell you what your existing insurance covers. Not when they try to tell you about the insurance provided by a credit card, and not when they try to tell you about your own policy.
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February 27th, 2007 at 2:05 pm
Huh. I’d wondered about that. Rented from the desk (something I’d not done in years) in LAS the other day, and got this spiel.
April 4th, 2007 at 10:35 am
i bet your fancy card dosent coner 3rd party liability.
April 4th, 2007 at 10:40 am
cover sorry
April 4th, 2007 at 10:56 am
“Fancy card” ??!
And what does 3rd party liability have to do with loss of use, anyway?
April 13th, 2007 at 3:03 pm
[...] to car rental late-return grace periods? – Rental car agent blows smoke up my backside, redux – Loss of use? Get lost. « Trans-Atlantic low fare competition heating up: Zoom and [...]
May 2nd, 2007 at 10:17 am
DOWN TIME!!!
This is a person who has worked for Budget rent a car for well over 8 years. I can tell you from experience that 98% of your auto insurances do not cover loss of use. They cannot control how long vehicle sits in shop rental co takes vehicle gets repairs done then bills insurance besides your ded and your primiums going up there is also the responsibility of down tim. 14.99-25.99 seems like a small price to pay….
May 30th, 2007 at 1:03 pm
I am aware of the credit card companies that do cover loss of use or loss or revenue. The problem with you rental companies is that you will never send the support for it because you guys know it is bogus. So if one car is in being repaired why cant you rent out the other 10 that are just sitting in your lot waiting to be rented out. How are you losing revenue when you have cars just sitting in your lot to be rented? It is a bogus charge and everyone knows. If you have no cars left in your lot of that class why not send the support (fleet utilization log)showing that so the credit cards can pay you for it?
October 1st, 2007 at 12:12 pm
Its simple and if you have never worked in the rental car business you would not know this but guess what it comes down to this. If You damage a vehicle we cannot rent that vehice and you stupid stupid person(Comment by Jon) dosnt relize that if we cant make the money on the car you will pay for the revenue we lose even if ther is 10 cars left that is 40+ dollars a day we lose to that vehicl..
Think of it this way if someone dammages your car what does the insurance do! RENT YOU A CAR so you can go to your usless and stupid job. No diffrent they just dont pay you for the loss they rent you a car….
October 1st, 2007 at 12:32 pm
Quentin: No namecalling, please. That’s not acceptable here.
Putting Jon’s question in a slightly different angle:
If there is any car on the lot, and a renter can get another vehicle, how do you justify loss of use? Do you produce fleet logs, or just the log of that vehicle? Or neither?
Further, how is the duration of the loss of use actually calculated? Actual time in the body shop?
I’ve rented cars that had dents and dings. And I would bet good money that the previous renter got hit with a loss-of-use charge. Jon’s comment may have been an oversimplification, but it’s clear where he’s coming from.
October 5th, 2007 at 1:41 pm
Ok first Jon sorry about the name calling greatly applogize. Next In most cases if its bigger than a Quater or Pierces the paint you will be charged for the damage and loss of use. No logs are needed because when we send the bill to your ins. co. it is listed in the Itimized statement. Next think of it this way if damage a windshiled on a new car to the market and car mfgs. have not started to produce the part we cannot rent the vehicle w/ a busted windshield. We have to wait untill the windshield comes in. Oh and by the way if you read the fine print on most if not all rental contract it states about loss of use. We can have the argument all night long if this is a correct practice or not but it still comes down to this dont want to pay down time take CDW
October 5th, 2007 at 8:08 pm
Interestingly, Ed Perkins (who wrote the article originally referenced in this post, back in February 2007) revisits the issue of loss-of-use this week, 8 months later. Here’s the link:
http://www.smartertravel.com/travel-advice/beware-gaps-in-credit-card-coverage-for-rental-cars.html?id=2442326
I’m quoting the most relevant parts of Ed’s article below:
December 5th, 2007 at 9:27 pm
[...] – Loss of use? Get lost. – Reader mail: Why would I want to upgrade my rental car? – Reader mail: What happened to car [...]
December 6th, 2007 at 7:13 pm
Travel in Mexico…..things really have’nt changed all that much since my first Mexican holiday in 1967 after boot camp.
Imagine that: One still has to be ever so careful of the Mexican toristo industry. You can still easily wind up in jail or in great credit-card debt. They know how to screw you just enough so that we keep coming back anyway.
January 3rd, 2008 at 4:28 pm
Just make sure you notify (file a claim) your card holder company as soon as possible after the accident.
I was hit with additional expenses two months after the accident, well after I thought the insurance company had it all covered.
VISA has a 45 day period to report claims. After that ………
January 26th, 2008 at 4:32 pm
Some alpha male AA jock in a dodge ram in Rock Hill SC tried to pull the LOU crap on me (figuring as a Doc I could afford it), and I didn’t bite. I needed a car b/c I had totalled another and got injured in the process.
This is why we need socialism in this country.
…and as for the Gent who went to Mexico…
I studied medicine there for two years and Don’t ASK!! never again would I go back to those corrupt gringo haters. They shaft each other too which is why they are all getting out and coming here. I registered my car legally and they confiscated it and I needed a lawyer to get it back. And they all new G-D well that the majority of students registered their cars ILLEGALLY as tourists but never did anything to them. What a miserable hypocritical society they have.
April 16th, 2008 at 5:47 pm
Too funny to read the various comments. Insurance companies don’t like hypotheticals like LOU. Nice to see the follow up with info on the credit cards. Unfortunately, most still don’t pay attention.
February 15th, 2009 at 8:47 am
love what mark ashley posted
you know if he had just listened to that advantage guy that he hated so much he would have avoided that issue. lol.
its not like the advantage guy did it for a living or anything.
let me pose this question.
lets say you have a 700 dollar credit limit on a bank of america, capital one, or other visa card….and you never use it. you still have an active CDW policy on that card…but you pay them nothing for it.
why in hell would they pay for the full cost of a 20,000 dollar car, and expensive loss of use charges, towing, storage fees, etc.
they wouldnt, they would find some reason not too.
just dont be cheap, be safe, buy the stupid coverage, and dont worry about it. You shouldnt go on vacation unless you can afford to do so.
February 1st, 2010 at 5:43 pm
[...] consideration is rental car coverage. Because of Visa’s more generous loss-of-use coverage in the case of damage to the car, I always use a Visa when [...]
February 2nd, 2010 at 12:24 pm
Do the math. CDW coverage is insurance. Insurance is a bet that you make that something bad will happen. If your standard auto insurance and cc cover everything but loss of use, then the entire risk you are insuring against is this loss of use charge. Say the rental car company got you for a month at $30 dollars a day… $900. How much would it be worth to insure against that expense? If cdw coverage is offered at $25 a day, then you’d be betting that you have an accident that results in 30 days loss of use once every 36 days you rent a car. If you don’t expect to have one accident (or stolen car) every 36 days, then decline the insurance and save money in the long run. Just make sure you have an emergency fund in case the worst does happen.
May 16th, 2010 at 2:29 pm
welll if you dont take the LDW you will be screwed especially in FL it happened to me I had to pay thousands and thousands out of pocket because my insurance only pays for so much ….they lied to me and said i was covered when it happened they covered me up to the depreciated value of my own vehicle they did not cover ANYTHING .. not taking the coverage is dumb thing to do ….. Don’t be stupid take the LDW everytime …
June 11th, 2010 at 1:30 am
Too funny to read the various comments.and this site is nice and more information Say the rental car company got you for a month at $30 dollars a day… $900. How much would it be worth to insure against that expense
sophia
September 18th, 2010 at 11:41 pm
Loss of use will be abused. The rental company has ZERO incentive to get the car back from the bodyshop if they can charge loss of use a rental rate for a car just sitting in some repair lot and not racking up any miles.
The body shop can take a month to do a repair that should have taken 3 days to complete and they rental company will tell them to just take their time since they could care less.
They do not have to prove that the car would have been rented during that time (all cars of the class all rented out every day during the repair period), so they may be getting paid for a car that would not have been rented those days anyway.
It’s a scam if there is nothing to force them to not drag their feet.
January 10th, 2011 at 4:21 pm
Obama and the federal government should regulate or take over the rental car industry.
Enough iwth the abuses!!
February 21st, 2011 at 5:57 pm
My rental car was stolen with all our luggage/wallets/laptops/etc, about 16 hours after we got the car, while we were swimming in the ocean in Puerto Rico. We were left stranded in our bathing suits with no money, no identification. This was day 1 of our 2 week vacation. My wife was livid, it ruined the trip. It was even a little difficult getting a hold of family to wire us some cash. We rented the card with Discover Card. Turns out (in the fine print) that loss of use insurance is only covered in case of physical damage, it’s not covered for a car that’s completely stolen! We’re still dealing with this mess. The rental company is still charging us over $840 a month as if we are still there using the car but we’ve been back in the continental states for months. We are fighting to get those charges to stop and be credited back. We don’t know what the eventual loss of use fee will be but Discover has already stated that they don’t cover it and neither does our regular car insurance. Our personal stuff, computers, clothes, snorkeling gear, camping gear, cash, phones, … are not covered either and our home owners deductible is $2000 so the approximately $2500+ loss of items is probably not worth claiming. This was a really bad experience and it’s doesn’t seem to have an end to it.
March 11th, 2011 at 5:58 pm
You MUST read the fine print in your credit card account agreement to see what will be covered and what will not be covered. I have 4 credit cards: 2 MasterCard, 1 American Express, 1 Discover card. The details are all different.
Two cards state flat out that they DO NOT cover loss of use.
One card is silent on the topic.
One card says it will cover loss of use but ONLY after the rental company provides a detailed utilization log and can PROVE that it had not other cars to rent at the time the car was out of use. Good luck getting that info from a rental company.
Meanwhile the rental company will still charge YOU and its up to YOU to get reimbursed by your credit card.
July 12th, 2011 at 10:58 pm
http://www.denverpost.com/travel/ci_8625501
Read this article it spells it all out….nobody has mentioned diminution of value yet which for you people too cheap (i.e. too poor) to pay this charge could bankrupt you. Get a brain, use it to make money (not working the crap jobs you probably all have) then maybe you’ll be able to afford things in life and not worry about a measly 25 bucks a day of extra insurance that could possibly save you thousands.
August 21st, 2011 at 6:03 pm
Pretty good article, and decent of Mark to stand up and say that this RAC insurance is not so cut and dry as he once thought. When you buy that insurance from the RAC company they don’t even look for damage when you turn it in.
That article from the Denver Post says only a small percentage of people buy the insurance at the rental car counter which makes me feel like a bit of a rube, but I don’t want the hassle if something happens.
Good comments accept for the obvious, tacky, rude, RAC shills.
RAC= rental car company