Steer clear of these 5 car-rental traps

By Liz Pulliam Weston

Renting a car is getting trickier by the day.

Finding a good deal has gotten harder. Automakers have cut back on discounted sales to big fleet buyers, leading rental companies to raise their rates. Local governments have piled on new taxes. In addition, many franchises are charging fees for things that used to be free.

Meanwhile, getting an upgrade to a bigger car could result in financial disaster, since some common rental vehicles are often excluded from insurance coverage.

Here are the traps to avoid when you're navigating car rentals:

Trap No. 1: Limiting your search

Unfortunately, there's no single Web site that always has the best deals. There's also no single car category that's always cheapest.

To find a good rate, you'll need to scour the Web. You might start with a major travel site like Expedia, Travelocity, Orbitz or the travel section of Microsoft's Bing (Microsoft is the publisher of MSN Money), then check out the prices at Hotwire.com and Priceline. Finally, explore some of the rental companies' sites, looking for specials. Once you've booked, check back at the various sites periodically to see if you can get a better deal.

The earlier you start looking, the better. Booking weeks in advance allows you to hedge against future price increases, but you're not locked in if rates should drop. (In most cases, there's no penalty for canceling a reservation if you find a cheaper rate later.)

Also, don't assume that smaller is always less expensive. Some agencies began slashing rental rates on SUVs and larger cars after customers balked at the expense of filling bigger gas tanks. If you need the extra space or won't be doing much driving, these bigger cars can be a bargain.

Bonus tip: Consider convenience as well as price. You might get a better quote from an off-brand agency, but you could end up paying in longer lines or less-frequent shuttle service. If time is an issue, consider joining some of the major car-rental companies' frequent-user clubs, which can speed you through the checkout process.

Trap No. 2: Not factoring in taxes

State and local governments have discovered the perfect patsies: rental-car drivers. In many areas, various government-mandated charges make up 20% to 40% of the total bill.

Even airports that didn't have such fees in the recent past, including Los Angeles International and New York's John F. Kennedy, now lard them on. At LAX, for example, car renters pay "airport concession" and "customer facility" fees as well as a "California Tourism Commission assessment." In other words, tourists to La La Land get to pay the state to lure other tourists to La La Land.

Some of these fees relate to the cost of building and maintaining airports, but others subsidize municipal projects a driver might never visit. In Boston, for example, rental-car drivers pay a fee to help pay for the city's convention center. LAX's fees include one an airport facility that hasn't been built yet, said rental-car-industry expert Neil Abrams.

The fees are "an epidemic, and it's only gotten worse," said Abrams, a former Hertz executive and founder of travel-research company Abrams Consulting Group in Purchase, N.Y. "At the end of the day, it hurts the travel industry."

Government agencies have been able to add these charges "with impunity," Abrams said, because they're levied on rental-car drivers who don't live or vote in the area -- a situation he calls "taxation without representation."

Here are some ways to cope:

• Look for full disclosure. Make sure the booking site allows you to see all taxes and fees before you commit. Most of the major travel sites, including Expedia, Travelocity, Orbitz and Hotwire, show you total costs that include these charges.
• Consider renting off-site. You'll still pay taxes and some fees if you rent from a chain's downtown or suburban location rather than its airport site, but the total is likely to be less. You'll have to weigh the cost and hassle of getting to the alternate location against any savings.
• Reconsider whether you really need a car. Particularly in big cities, you may discover that relying on shuttles, taxis and public transportation actually costs less than renting (and parking) a car. If it's a toss-up, consider that many airports keep their rental-car facilities in distant lots, which can add 30 or more minutes to the time it takes to get to your flight.

Trap No. 3: Letting add-on fees empty your wallet

Rental-car companies have taken a cue from banks and learned to nickel-and-dime their customers for big profits. Here are some of the major fees to watch out for:

Late fees. Most agencies use a 24-hour clock that starts when you pick up the car. If you get the vehicle at noon, you're expected to return it by noon on the final day of your contract. Get stuck in traffic on the way to the airport and you could face a hefty fine.

Many agencies offer a 60-minute grace period, but after that you'll face steep hourly rates. Be late enough, and you'll be charged for an extra day. If you got a cheap weekend rate or other special deal, those late fees could really jack up your total cost.

"You could potentially pay more (in late fees) than you did for the rental," said Anne Banas, executive editor of SmarterTravel.com.

The best cure is prevention. Check local traffic conditions and leave plenty of time to get to the airport.

Fuel charges. If you fail to fill your tank before returning, the agency could charge you $5 a gallon or more for the missing fuel. Prepaying for a full tank isn't usually the best alternative, though, since any gas you don't use is essentially a donation to the car-rental company's bottom line. Most of the time, Banas said, you're better off skipping the prepaid options. Instead, look for a convenient gas station as you leave the airport and use it when the time comes to return your car.

Bonus tip: Make sure the tank is full when you get the car. If it's not, insist that the agency rep note the fuel level on your rental contract so that you don't wind up paying for the last driver's gas as well as your own.

Additional or young drivers. Some rental companies allow you to add another driver at no charge; others slap on a fee of $25 or more. Drivers under 25 often face a surcharge that can range from $10 to $80. These fees may not be disclosed before you book; you'll need to ask.

Continued: Mileage fees, equipment rentals

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