€2,000 SUMMER CAR HIRE RIP-OFF
Anger as Irish tourists face massive rises in insurance excess
HOLIDAYMAKERS are facing bills of over €2,000 if they damage their hire car abroad, the Irish Daily Mail can reveal.
In the latest travel rip-off, car-hire firms overseas have hiked the excess charges they impose on customers involved in an accident.
Tourists face an average excess of more than €1,300 on a holiday hire car, with one firm charging over €2,000.
It means holidaymakers face a massive bill they have to pay out of their own pocket if they have a prang – even if it wasn’t their fault.
Industry experts say customers now ‘have no choice but to buy excess
insurance’ before travelling abroad, which can cost up to €28 a day, according to AA Ireland. And one leading consumer rights representative likened companies’ behaviour to ‘cartel-type’ activity.
‘Excess’ is the amount of a repair bill that a customer has to pay before their insurance picks up the balance, and is seen as a way of reducing the cost of renting a car. Drivers are also told the only way to protect themselves from extra repair costs is to pay for costly ‘excess liability’ insurance.
One international car rental firm is already being investigated by Trading Standards officers in the UK over allegations of irregular billing. The European Commission is also ‘concerned’ over the costs and has urged consumers to report details of billing disputes to it or consumer groups.
When a hire car is damaged, the driver must usually pay the first few hundred euro worth of repairs – known as the excess – before the rest is covered by their standard insurance. But experts say excess charges are spiralling out of control and car rental desks use the astonishingly high figures to persuade drivers to spend hundreds on additional ‘excess waiver’ cover before they set off.
AA Ireland’s Conor Faughnan said: ‘We’ve been aware of this for a while and have had a number of complaints about car-hire companies to us in the AA. There are a number of incidents where people drop a car back in their opinion completely undamaged, and the next thing they know, there has been a significant charge applied.’
The number of people planning to hire a car on holiday is as high as one in three, according to an AA Ireland survey.
But just 37% of them have taken out excess insurance when hiring a car because of the extra cost and ‘lack of necessity’. The research, which was conducted through an AA Motor Insurance poll of nearly 10,000 motorists, also revealed as many as one in ten motorists who have previously hired a car abroad either paid for damage they disputed having caused or felt that they were pressured to pay for damage by the car provider.
Dermott Jewell, of the Consumers’ Association of Ireland, said: ‘Collision damage waiver is a well-known feature of car hire across the globe and when you do compare with different countries you see how much consumers going to these countries are being fleeced, purely and simply because they can.’
The average excess liability – the amount a driver has to pay towards a repair before their insurance company picks up the rest of the bill – varies greatly. It is €844 in Crete but almost €2,000 in Faro, Portugal, a study by the insurer iCarhireinsurance.com found.
Mr Jewell said the EC and consumer associations in Europe, particularly Portugal, were concerned at the trend. ‘The worry is from them that [the high costs] are affecting their reputation and they’re very upset,’ he said. ‘It’s not official but there are worries that there is some form of a “cartel-type” movement.’ Consumer campaigner James Daley, of Fairer Finance, said: ‘Car-hire excesses have multiplied over the past few years because comparison sites have driven headline prices down... It’s reached the point now where customers have no choice but to buy excess insurance. Most people buy this from the rental companies at overinflated prices.’
Care-hire firms Avis, Budget, Europcar and Hertz didn’t reply to requests for comment.
Comment – Page 12 christian.mccashin@dailymail.ie