8

For the first time ever I rented a small car (I think it was an old Citroën C3 with lots of scratches) at Las Palmas de Gran Canaria for less than 24h.

I only paid €22.97 for the rental (including liability insurance, fully comprehensive insurance, theft insurance) and €9.25 for a Collision Damage Waiver Excess insurance. Booking provider was Argus and the rental car provider was Thrifty in cooperation with Hertz.

I was surprised that they had to block €730 for this kind of car. So how do they calculate the deposit amount?

  • 4
    Each company does it differently, so no firm rules. Likely insurance and deductible amounts figured into it. – user13044 Oct 15 '14 at 10:50
  • Each company comes up with their own rules. I don't think you can find one answer that would cover every company. Your best bet is to ask them, most likely. – Mark Mayo Oct 15 '14 at 11:52
19

€730 unfortunately isn't that shocking and in par with my experiences all over Europe.

It is either:

  1. Common practice imposed on any car rental agreement by the software the rental agency uses.
  2. The amount you lose in case you are liable for in case of damage or an accident. It is not uncommon for rental companies to still apply a deductible even if you have "full coverage" insurance. If this is the case it typically is in the small print of your rental agreement. The last time the default was a €2,500 deductible, which I could decrease by buying additional insurance. Still after paying the maximum amount a €620 deductible remained. The rental was a small Peugeot 307 for €39 per day, with an additional €16 to cover liability up to €620.

Also be aware that in most cases even if an accident was not your fault, the rental agencies will keep the block up until everything is dealt with. I had this some years ago when some one tail-gated me. I had to wait one and a half years before I got reimbursed.

  • 1
    +1 Not sure why the down vote, seems pretty accurate to me. – The Wandering Dev Manager Oct 15 '14 at 12:10
  • A recommendation is to also take pictures with your mobile phone at the rental location, especially if, as in the op, it appears the car allready has cosmetic damage. That way you won't be charged (as we were) for an existing ding. (I got the money back as fortunately the rental rep we dealt with backed us up - but it took 5 days of arguments and a spoilt trip) – Martin Jevon Oct 15 '14 at 21:33
  • 1
    The English-language terminology for eigen risico is “deductible”. – Relaxed Oct 15 '14 at 23:09
  • @MartinJevon I got a car damage description which listed every scratch and dent ;) So no problems at all. – user21844 Oct 16 '14 at 1:14
4

You need to check the details of the rental agreement, and especially the damage waivers. Likely the waiver is a policy (you mention it as insurance )which you can reclaim if you have an accident, and the company have blocked the excess off as they will charge you this if you have an accident. The way to avoid this is to make sure the deal is WITHOUT excess, that means they will not charge you in the case of an accident.

--Update

And in answer to the original question, the excess amount in the hold is usually based on the rental class (so I've seen a luxury class require 2000 eur+ on 2 separate credit cards against different banks), the figure likely represents at least the amount of the car rental company's excess on their insurance, so they make you take all the risk

  • Or find a credit card that covers your rental insurance. They exist (UK/US), unfortunately not in the country I live in. – user141 Oct 15 '14 at 11:21
  • Also except for rentals at airport, I have never found a rental company that is willing to give really full coverage insurance. – user141 Oct 15 '14 at 11:23
  • Yeah but that won't stop the car rental company from blocking the excess, just mean you don't need to buy their policy. I'm in Menorca just now, paid for the gold package, which got me a seat Ibiza 5 door for £62 for 1 week plus fee, total charge to card £77, plus no hold as it's without excess – The Wandering Dev Manager Oct 15 '14 at 11:26
  • 1
    that someone can only be the downvoter. Sometimes people downvote answers to an off-topic question. (While I feel the question is probably not properly answerable or overly broad, I wasn't a downvoter) – Mark Mayo Oct 15 '14 at 12:53
  • 1
    Ok updated to answer the question 😃 – The Wandering Dev Manager Oct 15 '14 at 13:42
1

There are two reasons for the deposit.

The first reason is that the deposit covers the difference repairing the damage and the cost of claiming for the damage on the insurance.

To reduce premiums, Insurance policies normally have an excess amount meaning they will not pay out on the first €x of any claim. Claim for €500 with a €200 excess and they will pay €300. You can pay hire higher premiums to reduce the excess.

In this case, if you return a car with a scratch, it could cost maybe €200 to repaint it as new. And another €300 when you include time and effort involved in getting it fixed and lost earnings from the car not being available hire out to others. Claiming on the insurance will get the hire company that €200 back (minus the excess), but cost time and effort and out-of-pocket expenses to make the claim. All of which comes out of your deposit.

The second reason is that even though you can almost always reduce or even eliminate the deposit by paying a higher insurance premium, the idea that you know you will lose up to €730 for even a small amount of damage, you are likely to be more careful while driving it.

-1

Not fully sure, but I believe the deposit is calculated based on the value of the car. And in Europe those small cars are priced similarly to much larger cars in the US.
While that car might seem small to you, for Europe it's a mid size family car similar to what you'd expect a Ford Taurus to be in the US.

Retail price new for one is around 20.000 Euro (give or take a few thousand depending on country, options, and specific version).

730 Euro deposit for a car like that doesn't sound bad at all, in fact it sounds pretty normal.

  • There is nothing suggesting the OP is based in the US, making this a mostly unrelated rant about the price of cars in Europe (plus the notion of “price of cars” in Europe is questionable in itself, there is a big difference between the Netherlands and Germany for example). – Relaxed Oct 16 '14 at 11:41

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