Holiday car hire: how to avoid the add-ons that can double your bill

Greece and Portugal are the priciest places to hire a car this summer, while Florida is the cheapest, according to a survey of holiday hotspots. Research also revealed just how much the various add-ons – from child seats and satnavs to the rental firm’s own excess insurance – can add up. It found that in some cases they can easily double the cost, although many can be easily avoided or reduced.

Sorting out car hire can be one of the most stressful parts of arranging a holiday. Even with a relatively good-value deal there is the worry that when you arrive the desk will have closed for the evening, or run out of cars or given yours to someone else etc, or you will be subjected to unpleasant hard-sell tactics. And when you get home there’s the fear that money will be whipped off your credit card to pay for damage you didn’t cause or for mysterious “traffic violations”.

But there are steps you can take to avoid any hassle. The survey looked at the cost of hiring a compact family car, such as a VW Golf, for a week this summer (29 July-5 August) in 15 countries: Australia, Canada, Croatia, France, Germany, Greece, Ireland, Italy, Portugal, Spain, Switzerland, Turkey, the Netherlands, the UK and the US. Six companies were compared: Hertz, Avis, Budget, Europcar, Enterprise and Sixt.

The research by website iCarhireinsurance, a provider of standalone car hire excess insurance, found that the average basic cost across all 15 destinations was £301. But if you are persuaded to buy the various extras the final bill is more like £626. The £301 masked wide variations. The US, represented by Florida, was cheapest at £196, followed by the Netherlands (Amsterdam) at £207. Priciest by some distance was Greece (Crete), where the basic cost was £488, followed by Portugal (Faro) at £398. However, even these averages hide big variations. For example, in Crete the cost ranged from £336 at Sixt to £684 at Europcar.

Here’s a guide to avoiding the pitfalls:

Get a move on
Some of the cheapest deals will probably already have gone. There are lots of price comparison websites, and two that Guardian Money has previously given a plug to are Holiday Autos and Rentalcars.com. The good news is that, as of the start of this year, the main sites have had to make sure motorists are shown the true cost of hiring before they buy. This followed action by the Competition and Markets Authority, which last year wrote to around 25 businesses to tell them their pricing must be “transparent”.

Only buy the basic package
Firms make their profits by selling add-ons, and in particular overpriced excess insurance. The hire price usually includes insurance for a major crash or write-off, but leaves you responsible for the first portion – the excess. So staff will often try to persuade you to buy their insurance to bring the excess down to zero, but it can be super-pricey. There are lots of different types, such as “super collision damage waiver”, “super theft waiver” etc, and some will also try to sell you tyre and windscreen cover.

Instead, buy an independent annual policy. Two of the main providers are Insurance4carhire, at £39.99 a year for Europe, and iCarhireinsurance, at £37.99 or £2.99 a day for Europe.

The car hire firm will still charge the agreed excess, but you reclaim it when you get home. The drawback is that car hire desks will often seek to block a sizeable sum – perhaps £1,000-plus – on your credit card for the duration of the rental if you don’t buy their insurance. So make sure your card has enough credit.

One driver usually reduces costs
The survey found that an extra driver typically adds £48 to a week’s hire.

Say no to a satnav
You could end up paying £72 a week, according to the survey. Download a free app such as HEREWeGo on your phone to access offline maps for more than 110 countries.

Take your own car/booster seats
The typical charge at a rental desk was £51 – though Hertz in Milan and Barcelona charged £110 and £82 respectively. Ryanair charges £20 return to take your own if it’s pre-booked online, and with easyJet they are free.

Check the car thoroughly
Mark every blemish or scratch on the rental agreement. Also check the spare wheel and whether the car is full of fuel (if it is supposed to be), and note down the mileage. Once you have marked all the damage on the form get the rental desk to sign it. Take a video or photos as extra proof. When you return the vehicle, ask staff to inspect it and, ideally, to sign a confirmation that there is no new damage.

Keep hold of the paperwork
Do this even if the rental passed off uneventfully. In the following weeks keep an eye on your credit card to make sure promised payments are made, and that you’re not hit with extra charges.

The best cards to use abroad

A new report claims consumers are being “fleeced” to the tune of more than £5bn a year by making bad currency decisions, writes Rupert Jones.

The research by currency firm FairFX says this includes £190m in ATM fees for withdrawing cash abroad, £644m in debit and credit card fees on purchases, and £380m lost as a result of people opting to pay in pounds instead of the local currency (the “dynamic currency conversion” trick).

However, there are cards out there that won’t charge a penny in loading fees or other bank charges when you use them overseas in shops, hotels and restaurants, or to withdraw money from cash machines.

These include the Halifax Clarity credit card. It applies MasterCard’s exchange rate at the time you make the transaction. But be aware that there is no interest-free period on cash ­withdrawals – you’ll be charged a typical 18.9% APR from the day you take the money out.

Metro Bank’s debit and credit cards, meanwhile, are fee-free within Europe, and Nationwide’s FlexPlus packaged account debit card offers commission-free and fee-free cash withdrawals abroad. However, it costs £10 a month. The commission for purchases in a foreign currency is 2%.

If you haven’t bought your holiday money yet, shop around. MoneySavingExpert’s online currency site TravelMoneyMax compares rates and ranks them after fees and charges.

Meanwhile, there are lots of prepaid cards with differing fees, rates and terms. Decent names include Revolut, FairFX and WeSwap. Unfortunately, Travelex is scrapping its popular Supercard, which offers fee-free spending abroad, though if you have got one you can continue to use it in foreign stores until close of play on 23 July.