CAR RENTALS: HOW TO AVOID GETTING TAKEN FOR A RIDE
By Carla A. Fried

(MONEY Magazine) – Sun block is not all you need to avoid getting burned on your next vacation or business trip. If you plan to rent a car, pack a magnifying glass and calculator. Once you read the fine print of the rental agreement and tally charges excluded from the enticing advertised rate, you may wish you had also brought along some Pepto-Bismol. . At first glance the rental rates emblazoned in advertisements are appealing, but a closer look exposes car-rental firms as masters of trompe l'oeil. The Better Business Bureau of Metropolitan New York recently documented deceptive tactics of 29 rental firms. Advertised rates for one-week rentals ranged from $59 to $295, but once the BBB added on fees for a variety of common options, the actual rental cost was $108 to $439.65. With some pre-trip planning and research, however, you can steer clear of these onerous rates. Consider, for example, the option that can put the biggest dent in your wallet: the collision damage waiver (CDW), which absolves renters of financial responsibility if the car is damaged in an accident. The CDW now costs about $10 a day, up from just $3 to $4 a few years ago. According to Tony Schrader, deputy commissioner of the Iowa Division of Insurance, this daily charge is about 10 times higher than collision coverage should be. Rental agents frequently bully customers into accepting this exorbitant protection by reciting alarming accident statistics. Moreover, some firms -- Hertz, Alamo, General and Thrifty among them -- have recently increased pressure to accept the waiver by making the renter responsible for damages caused by theft and vandalism. Then too, most rental firms now hold you accountable for the full value of the car, up from a $3,000 maximum liability two years ago. The end result? ''Unless you are sure of your own coverage, it is easy to be intimidated into yielding to the rental firm's pressure,'' says Schrader. That could be an expensive mistake, according to J. Robert Hunter, president of the National Insurance Consumer Organization, a nonprofit consumer advocacy and information group. Says he: ''At least 60% of the drivers don't need the extra coverage because their personal car policy already insures them.'' If your personal auto policy does insure rental-car damages, you can save money by refusing the CDW. But before you do, make sure your policy provides sufficient coverage, especially if you rent from a company that holds drivers liable for theft and vandalism as well as accidents. Remember too that any claim you make to cover rental damages could cause your auto-insurance deductible and premium to increase. In addition, you may have to pay the rental firm for damages quickly and then wait to be reimbursed by your insurance company. If you don't have auto insurance, your credit card may provide alternative relief from the weighty CDW charge. By charging your rental on a gold or silver MasterCard offered by the Dreyfus Consumer Bank (800-847-9700; $25 and $16 a year), for instance, you receive up to $25,000 of coverage for damage and loss caused by accident, vandalism or theft. MasterCard and Visa cards issued by Chase Manhattan Bank offer similar coverage for the full value of the car (800-633-0458; $20 and $45 for the Premier card). American Express recently announced it too provides comprehensive coverage for gold and platinum card members (800-327-2177; $65 and $250 a year). Check with your card issuer to see whether car-rental coverage is provided. If so, the credit- card issuer will cover only charges not absorbed by your insurance policy. In addition to the CDW, the clerk at the checkout counter will rattle off more options than Baskin-Robbins offers. For example, insurance coverage for personal injury and theft of belongings, usually mentioned in tandem with the CDW, can cost another $1 to $4 a day. ''I feel sorry for renters who've never been through the drill,'' says Jane Moss, executive director of the American Car Rental Association, which represents car-rental companies and franchises. ''If you aren't familiar with the procedure, the experience of renting a car can seem confusing.'' Adding to the confusion is the competitiveness of the car-rental industry. The four major rental companies that have about 70% of the market -- Avis, Budget, Hertz and National -- generally have base rates 20% higher than discount companies such as Alamo and Thrifty. Yet, until you add up all the ''incidental'' charges, you won't know which firm really offers the best deal. Use rental firms' toll-free numbers to do some comparison shopping. The major points you should consider: -- Type of car. The cost of compact, mid-size and full-size cars varies from city to city within each firm. As a rule, the bigger the car, the higher the rental rate. You can also save money by choosing a two-door car rather than a four-door, and by opting for manual transmission rather than automatic. Beware that rental companies may lure you with low advertised rates on subcompacts but often have only more expensive full-size cars available when you arrive at the checkout counter. To combat this bait-and-switch tactic, Barry Shiller of the California State Automobile Association suggests that renters reserve a car in advance and ask for a confirmation number and the name of the phone agent. ''You will have a better chance of the company honoring the quoted lower rate if you come prepared,'' says Shiller. You can also file a complaint with the company's customer service department. If you are not satisfied with the response, contact the local Better Business Bureau or the state department of consumer affairs. -- Mileage. If you plan to run up the odometer, be sure to hunt around for an unlimited-free-mileage package. Otherwise, you could be stuck paying as much as 30 cents for every additional mile over an allotted stipend -- that's $15 for every additional 50 miles. -- Additional drivers. Unless you intend to be designated the full-time chauffeur, you may have to pay another $10 a day to register a second driver. Also check if the company levies an additional charge for drivers under a certain age. Many rental firms tack on as much as $10 a day for renters under 25 years old. -- Airport fees. Renting from discount firms located outside major airports can be more expensive than renting from companies in the terminal in some states. Consider Florida, for example. If you rent from a firm that operates outside the property of the Sarasota or West Palm Beach airports, you will be charged up to 10% of your base rental rate for transportation to and from those airports. For a one-day rental, that could be just an extra $3, but a weekly rental with a base rate of about $200 will cost you an additional $20. -- Return site. In some major markets you may be charged for a second-site drop-off. You could pay an extra $30 to $50 if you return the car 50 miles from the initial rental site. If you stray about 200 miles, you could be hit with a drop-off fee of more than $100. -- Refueling. Check each company's refueling policy carefully. Most rental firms provide a full tank of gas when you rent the car and expect a full tank when you return. Unless you are hard pressed to catch a flight, refill the tank before returning the car to the rental outlet. Otherwise, you will pay as much as twice the going gas-station rate for refueling. At Alamo, however, it pays to return with an empty tank. For a required fee of $11.95, you receive up to three-quarters of a tank of gas when you rent the car, but you do not get credit for any gas in the tank when you return. -- Discounts. Substantial savings are available if you simply plan in advance. For example, if you are Los Angeles-bound, Thrifty will reduce the regular weekly rental rate on a compact car by 23% if you make a reservation one week in advance. Before traveling on business, ask if your company has discount arrangements with any rental firms. If a corporate discount isn't available, or if you are renting for personal use, check with any organization to which you belong for special rental deals. For example, the American Automobile Association (800-222-4357; yearly memberships range from $10 to $56) has 5% to 10% discount arrangements with Hertz and Avis.