Hiring a car abroad: How to avoid cost traps

Do you want to rent a car for your holiday? To avoid problems, take your time when looking for a rental car. Pay attention to what is and is not included in the price. And don't forget about insurance: even a small scratch can be expensive.

We explain what to look out for when hiring a car abroad and where the tricks of the rental companies and agents lurk.

What to consider when booking a rental car

Compare car rental companies' offers. There are often early booking discounts or savings. But don't go for the cheapest offer straight away.

Make sure that all the services you want are included in the price. For example, if you only add insurance, no mileage limit, additional drivers, a navigation system or child seats on the spot, it can be expensive.

Make sure you check the reliability of the provider: testimonials on the Internet can give you some information.

Important: There is no legal right of cancellation when booking a car online. The general terms and conditions will tell you if and when you can cancel free of charge. Some car hire companies allow last-minute cancellations, most 2-3 days in advance, a few not at all.

What is the difference between the online booking and the rental contract?

Do not rely on the fact that the online booking and the contract are the same. Make sure you check the contract before you sign it.

Many holidaymakers believe they have already signed a rental contract when they book a car online. This is usually not the case. The car booked online is only reserved.

The actual rental contract is not signed until you get to the car rental location and may not be the same as the online reservation. Additional insurance and extras can then be booked at the counter.

There are "black sheep" in the industry who add such extras to the bill without the renter's knowledge. If you are not careful, you can quickly end up paying double the original rental price. As the money is charged to the credit card on file, the fraud is often not discovered until much later.

A tip

If the contract is written in a language you do not understand, you can have it translated using your mobile phone's camera and a translation app (such as Word Lens or Google Translate).

Beware of additional insurances

Some car hire companies insist that you take out additional insurance. Not only do they exert psychological pressure, but they sometimes refuse to hand over the vehicle. Do not get involved.

If you do not want to take out additional insurance, insist on receiving the vehicle at the conditions reserved. If the rental company refuses, you should immediately inform the management of the rental company and also the intermediary you booked through (also known as a broker or organiser).

This way you can prove that you were put under pressure and did not agree to take out the insurance. At the same time, you will increase your chances of getting your money back, either for the unwanted insurance or for the prepaid rental fee if, for example, you have to give up the car altogether.

Comprehensive insurance yes - but only once

If you are hiring a car, it is advisable to take out fully comprehensive insurance with no excess.

You may already be insured through your credit card or membership of an automobile club. It is best to find out before you book so that you are not unnecessarily insured twice.

It is usually possible to take out comprehensive insurance with no excess directly with the car broker. In this case, you should make sure that you are not forced to take out a different type of insurance when you pick up the car. The reason for this is that the car rental companies do not make any money from insurance via a third party. This means that the staff at the counter will be even more motivated to force you to take out their own, often unnecessary, insurance.

Problems with GOLDCAR or Firefly?

The Italian competition authority AGCM has already fined the car rental companies GOLDCAR and Firefly several times for unfair business practices. Most recently in 2017 and 2018.

In addition to the aggressive advertising of additional products, the subsequent calculation of micro-damages (small scratches and dents) was also objected to.

Read more on the ECC Italy website.

Unfortunately, these sanctions only have an effect in Italy. In other countries, especially in Spain where Goldcar and Firefly also operate, there are still many consumer complaints. The main reason for complaints continues to be the additional insurances imposed. Other companies have long been in the spotlight for dubious practices.

Beware of No Show Charges

"No Show" means that the reserved car is not collected at the agreed time and the reservation is forfeited.

The prepaid rental fee is usually lost. It does not matter whether you have booked the car for one day or three months.

Example sentence from a car rental company's general terms and conditions: 

 [...] AFTER your rental is due to start (or you just don’t turn up) you’ll receive no refund [...]

The reason for not showing up is usually irrelevant. Often travellers are unable to collect their hire car because their flight is delayed or cancelled. Car hire companies and agents show little leniency, even if the flight delay was caused by bad weather and the customer was not at fault.

If you know you will not be able to make it to the car rental counter on time, you should call to let them know. This may help, but is not a guarantee that you will not be charged the no-show fee.

Major companies with no-show clauses that are unfavourable to consumers include Rentalcars, DoYouSpain and Argus Car Hire (CarTrawler).

Withholding the rental price without handing over the vehicle is illegal under German law. However, many agencies are based abroad, for example in the UK or the Netherlands. In some cases, the legal interpretation of the permissibility of such clauses differs there.

For a better understanding: When you book through an online portal, you reserve a car through an agent. You usually pay the agent the full rental price in advance. If you do not show up ("no show"), the agent keeps the money. So the car rental company gets nothing and does not hand over the car. For the agent, however, it is a lucrative business. In addition to his commission, he keeps the full rental price.

Car rental deposit - a credit card is often required

Almost all car rental companies require a deposit to cover any damage to the vehicle. This is usually done by placing a block on your credit card.

If a real credit card cannot be presented, or if the credit limit is insufficient, some car hire companies may refuse to hand over the vehicle or require additional insurance to be taken out.

Important to know: Most free credit cards issued in Germany (Visa and Mastercard) are now debit cards. This should be noted on the card.

Real credit cards usually cost extra. But even with a debit card it should be possible to leave a deposit. If the car rental company is intransigent, you should complain directly to the management and the agent and document this.

ECC Germany has received complaints about the following car rental companies, among others, refusing to accept a debit card at the counter: 

  • Goldcar
  • OK Mobility
  • Sicily by Car
  • Active Car Rental
  • Green Motion 
  • ClickRent

Important when collecting and returning the vehicle

When collecting the vehicle, the driver's licence, identity card and a payment card made out to the name of the main renter must be presented.

The rental company should make a written record of any damage to the vehicle. Even small scratches and dents should be carefully documented.

It is best to take photographs or a video showing the condition of the vehicle.

Avoid returning the vehicle outside office hours. In this case, you have no control over the contents of the return protocol. In addition, you may be held liable for any damage that occurs until the station opens. This is particularly the case if the vehicle is parked in a public place.

Full refuelling policy

When you book a rental car, look for a full tank arrangement. This means that you will receive a full tank of fuel when you pick up the vehicle and must return it with a full tank.

In most cases, the full-mileage agreement is cheaper than the flat-rate fuel fee charged by the car rental company.

Traffic accident involving a rental car

If you are involved in a traffic accident with a rental car, you must comply with the obligations set out in your insurance policy.

This includes calling the police and filling in an accident report, even if no other vehicle was involved.

Failure to do so may result in you having to pay for the damage yourself, even if you are insured.

You must also contact the rental company immediately after an accident.

Parking tickets and fines: Who has to pay?

The hirer of the vehicle is liable for traffic offences. The relevant authority receives the driver's details from the car rental company.

Please note: Compared to Germany, fines abroad are significantly higher. In addition, EU member states are increasingly making use of the possibility of holding traffic offenders liable across borders.

Most car hire companies charge a processing fee (around €40) for passing on driver details. This practice is not without controversy. The Italian competition authority ruled in June 2022 that such a processing fee is illegal in Italy.

However, it is likely that car rental companies in other countries will continue to charge a processing fee unless there is a court ruling in that country prohibiting it. If you disagree, you can try to have the money charged back to your credit card. In this case, the landlord would have to take the matter to court, which is unlikely.

What you should know about car rental booking websites

There are many ways to get a rental car:

  • Directly with the car rental company: on site or via the internet.
  • Intermediaries often come into play when booking through a platform. Be aware that many intermediaries are based abroad, which can lead to difficulties in the event of a complaint, e.g. if changes are requested to the booking, because of unfavourable no-show clauses or the refund of the excess in the event of damage.
  • Price comparison sites provide an overview of prices. These are then passed on to the car rental company or agent.

Who do I contact and when?

The booking portal is responsible if you want to change your booking, for example to extend the rental period or add another driver.

If you have any problems with the rental car, always contact your contractual partner, the car rental company.

Remember: The more companies involved, the more difficult it is to find the right contact person in case of problems.

FAQ: Frequently asked questions about booking a rental car abroad

Third party insurance is always included in a rental car.

In the event of an accident, it covers damage caused by you to third parties.

However, your own injuries and damage to the rented vehicle are not covered by compulsory car insurance. You can take out one or more additional insurances to cover yourself.

Comprehensive insurance is designed to cover damage to the rental car. 

Strictly speaking, there is no such thing as fully comprehensive insurance for rental cars. Instead, you agree an exclusion of liability with the rental company, i.e. the rental company waives its right to compensation if you damage the rental vehicle.

The extent of the waiver depends on the terms of the contract.

There are basically two types. One with an excess and one without an excess. These are often abbreviated on the rental agreement as CDW (with excess) or SCDW (without excess). There are also other names.

Important: Some parts of the vehicle may be excluded from the insurance cover, e.g. glass, underbody or tyres. Be sure to check this.

In addition to a valid driving licence, a minimum age is often required to rent a car. The rules vary from country to country and car rental company to car rental company.

However, as a general rule, you must be at least 21 years old to hire a car. If you are under 25 or a novice driver, you may have to pay an additional fee.

Important: It is not only young drivers who should find out about age restrictions in advance. Older drivers over the age of 69 may not always be able to rent a car or may have to pay a surcharge.

Whether or not you can drive the car abroad is specified in the contract.

There may be differences depending on the destination country and vehicle category. Sometimes it is allowed without restrictions, sometimes you have to pay an extra fee and sometimes it is forbidden. 

Whatever the case, make sure you comply with the terms and conditions. Driving abroad without permission can result in a hefty fine.

Note: It is possible for car hire companies to track rental cars using GPS transmitters.

A one-way fee is often charged if you do not return the car to the same location where you picked it up.

For example: You collect the car in Madrid and return it in Barcelona.

The one-way charge is usually not included in the reservation. It is calculated on the spot and can be very high, especially for cross-border trips.

Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.

Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.