How to cut the hidden costs of holiday car hire

There are several ways to trim your holiday car hire bill and pre-empt unpleasant surprises. Ruth Jackson-Kirby outlines some of the best.

Airport car hire desk
Holiday car rentals can be expensive
(Image credit: © EyesWideOpen/Getty Images)

Foreign holidays are back, which means travellers are once again grappling with the colossal hassle of holiday car hire. One key problem to watch out for is excess car insurance. When you hire a car, it comes with third-party insurance, but the excess is usually astronomical – as high as £1,000. When you collect your car, you will be given the hard sell to buy extra insurance to protect you from having to pay the excess. This costs £189 on average, according to The Times.

Avoid it completely by taking out your own excess policy before you go on holiday. iCarhireinsurance, for instance, charges around £35 for a week, or you can take out an annual policy for roughly £45. Then make it clear that you do not want the car-hire firm’s excess policy when you collect your car and check the paperwork before you sign it to make sure you don’t get stung with a policy you don’t want.

Don’t fall foul of the car hire fuel policy

Then there’s the fuel policy. The best option is to go for a full-to-full deal. This means you need to return the car with a full tank, or you’ll be charged an inflated price for the car-hire firm to fill it back up.

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The other option is full-to-empty, which means you pay that inflated price for a full tank of fuel and you then need to try and use it all up before you return the car. You may not use a full tank and it is nigh-on impossible to return a car with an empty tank, so you’ll be paying over the odds for fuel you don’t use.

Beware of unwanted hire car upgrades

Watch out for a bill for an upgrade you had no say in. During the pandemic car-hire firms sold much of their fleet and they have struggled to rebuild them owing to a global car shortage. So it is more likely than ever that you won’t get the car you booked. If you get a smaller car than you wanted, you should receive a refund to reflect the downgrade.

If you get a bigger car you shouldn’t have to pay any extra – it should be a free upgrade. Make sure this is agreed and on your paperwork before you accept a different car.

Make a thorough inspection of the car

When you collect your car (and when you return it) allow time to inspect the vehicle thoroughly for damage. Take a video or several photos when you collect it and again when you return it. That way you have evidence of any pre-existing damage and the state of the car when you gave it back in case there is a dispute over repairs.

If it is dark when you collect the car, make a note to that effect on the paperwork and do a full inspection as soon as you can.

Use a credit card

Finally, always pay for car hire with a credit card. That way if there is a dispute you can’t settle with the car rental firm you can take the matter to your credit-card company and ask for a refund from them. Under Section 75 of the Consumer Credit Act your card provider is equally liable for the transaction.

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.