I try to make smart financial decisions for the most part.
But every now and then, I make purchases that are just wrong… so wrong for my wallet.
The latest case? Overpaying for a rental car.
On a recent trip, I rented a car from Enterprise at Philadelphia International Airport. My auto insurance company — USAA — gives its members discounted rates with certain rental-car companies, and Enterprise is one of them.
I chose an economy car with a daily rate of $22.57. I rented the car for two days. My total came to $243.63.
Yep, that’s over 10 times the daily rate. (And that’s not factoring in spending about $26 in gas to refuel before returning the car.)
Here’s the breakdown of my bill and the mistakes I’ll try to avoid the next time I rent a car.
Don’t Ignore the Fees and Taxes
The rate for the car was $22.57 a day, so I ended up paying $45.14 for the car itself.
I paid $76.33 in fees. This included a $20.33 concession-fee recovery to reimburse Enterprise for fees it pays to the airport, a $16 customer facility charge to fund a new car-rental facility at the airport, a $4 public-transportation assistance fee to go toward mass transportation funding and a $36 one-way fee because I needed to return the car to a different Enterprise location.
I paid $20.22 in taxes. This included a $3.23 vehicle-rental tax, a $4.07 Philadelphia vehicle-rental tax, $9.69 in Pennsylvania sales tax and $3.23 in Philadelphia sales tax.
And here’s the kicker: I paid $101.94 to opt for insurance and damage coverage for the rental car. There are multiple sheets of paperwork that detail what I paid for, but essentially the charges were $47.98 for a damage waiver, $12 for personal accident insurance and personal-effects coverage, $11.98 for roadside-assistance protection and $29.98 for supplemental liability protection.
Mistake #1: Opting for Full Insurance Coverage
The biggest money mistake I made when renting this car was paying for the full insurance coverage — which made up about 42% of my bill.
The reason I was traveling to Philadelphia was to visit my dad, who had just gotten into a serious car accident earlier in the week. When the woman at the rental counter asked if I wanted to purchase the total insurance protection, I agreed — just in case lightning struck twice and I also got into a major collision.
But the thing is… I could have avoided this optional charge altogether. It turns out, my auto insurance policy covers rental cars. Of course, I realized this after the fact when I was, er, looking up information for this article.
Learn from my embarrassing (and costly) mistake and perform your due diligence before purchasing extra insurance for your rental car. Don’t check just your auto insurance policy. Some credit-card agreements also include coverage for rental vehicles. If you’re a AAA member, check what that policy includes.
Adding to my shame, the rental agreement I signed even said the insurance offered may already be covered by another source. But it was buried in the four pages of terms and conditions that I didn’t even glance over.
It really pays to read through everything you sign.
Mistake #2: Renting at the Airport
I’ve always been told renting a car at the airport is more expensive than renting elsewhere.
The $20.33 concession-fee recovery and the $16 customer-facility charge were added to my bill just because I rented from the Philadelphia airport. I could have potentially saved money if I had found cheap transportation to get to another rental facility.
Sometimes the daily rates at airports are also higher compared to non-airport locations.
Mistake #3: Choosing a One-Way Drop-Off
It was hard for me to avoid this charge because I was flying out of an airport nearly 100 miles from where I originally rented the car.
However, the next time I need to rent a car, I’ll try to plan things out so I can pick up and drop off the vehicle at the same location.
The $36 I paid to change the drop-off location was more than the daily rate of the rental.
Mistake #4: Rushing Through the Process
Penny Hoarders looking for the best deals know the benefits of shopping around. I reserved my rental car after I had landed at the airport and picked up my luggage. I did not research prices in advance or do much comparison shopping to see what other rental companies would have charged me.
I might have found a less expensive rental if I had taken my time. At the very least, slowing down and reading through the entire rental agreement at the rental counter could have saved me over $100 in unnecessary insurance protection.
In my defense, I was worried about my dad’s car-accident injuries, and planning the trip was very last-minute. Making financial decisions when you’re tired and stressed is not the way to go.
Mistake #5: Not Paying Off the Charge on My Credit Card
When my next credit-card bill rolls around, it’ll include about $4.60 in interest because I didn’t pay off the rental-car charge immediately.
While that isn’t a whole lot of money, credit-card interest can quickly accumulate before you realize it. I’m still paying off debt from charges I made in 2013, and the interest is killing me.
If you’re using a credit card for a car rental, the best move is to pay off the charge as soon as possible — unless you’re still within your card’s 0% interest introductory period.
Excuse me while I go off and follow my own advice.
Nicole Dow is a staff writer at The Penny Hoarder. Writing about her financial mistakes was hard, but she hopes to inspire others to make better choices.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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