Steer clear of these 5 car-rental traps

One-way charges. If you're not going to drop the car off at the same location where you picked it up, you may pay a lot more -- or you may not. The cost depends on a number of factors, including the agency, the cities involved and even the type of car.

Let's say you want to pick up a full-size car at the Miami airport and drop it off in Dallas two days later. If you looked only at the per-day rates, you might bypass the $105 or so charged by Avis, Alamo or Budget and hop instead on the $47.99 daily rate offered by Dollar.

That would be a mistake, though, since Dollar is the only one of the four companies to slap on a "drop charge," and it's hefty: $505.44. That brings Dollar's total bill to nearly $720, compared with around $260 for its competitors.

What if you wanted to make the same trip in a little more style? You might assume a luxury car would really set you back, and that would be true with Hertz, Thrifty or Dollar, all of which would charge you more than $700 for the two-day trip. But Alamo and National would charge half that -- around $350. Similar car, same route, big savings.

Bottom line: Don't assume you'll have to pay through the nose for a one-way ride. Cast a wide net and check out the prices for various types of cars at various agencies before you book.

Mileage fees. You can still find these charges at smaller agencies and specialty rental companies. Typically, you're allowed a set number of miles, with an added fee of 15 cents to 50 cents for every mile you drive over the contract's limit. If you're renting from a small company, inquire about mileage limits and try to stay within them. Or, better yet, opt for an agency that offers unlimited mileage.

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Extra cleaning charges. Do something really disgusting in or to your rental, and you may pay dearly for it. Most rental agencies reserve the right to charge you a premium for any deep cleaning that's required before they can rent the vehicle to another customer. So if somebody gets sick in the car, spills something gooey or doesn't quite make it to the potty, you might save some money (and embarrassment) by paying an auto detailer to clean up the mess before you return the car.

Bonus tip: Even if the mess isn't egregious, you should clean it up and discard any garbage before returning the car if you want to keep the agency employees happy. A happy employee may be less likely to turn you in for that scratch or rat you out for a not-quite-full tank.

Various equipment rentals. Navigation systems, ski racks, child car seats and satellite radio can each boost the cost of a rental by several dollars a day. Whether the convenience is worth the cost is an entirely personal matter. You should also know that your request for a certain item doesn't guarantee its availability. If it's really important -- like that car seat -- consider bringing your own.

Trap No. 4: Paying for damage that's not your fault

Most major car-rental agencies now hold renters responsible for damage caused by "acts of nature," including hail storms, floods, tornadoes, hurricanes and other disasters. Even if you couldn't have predicted the act or prevented the damage, you're on the hook.

Less catastrophic damage can get you in trouble, too. Many rental agencies charge drivers hundreds of dollars for relatively minor dings or scrapes.

If you don't do a careful walk around your vehicle and report existing damage to the company before driving away, you could end up shelling out for damage caused by the last driver. When you return the car, consider taking a few photos or a short clip with your camcorder or video-enabled phone as proof you brought it back in good shape. If it's dark and you're stuck without a flash camera, ask a car-rental employee to drive it to a better-lit spot for your inspection.

If you do get saddled with a repair bill, you may have insurance or other coverage that will pay it, but even that is problematic. See below.

Trap No. 5: Getting lost in the insurance maze

The usual advice you hear -- skip the coverage the rental-car company offers you -- is way too simplistic.

In general, the coverage you've got on your personal vehicle will carry over to a rental, says Loretta Worters of the Insurance Information Institute. Your homeowners or renters policy probably covers your personal property if it's stolen from the car.

But if you've dropped comprehensive and collision coverage on your own car -- something many people do to save money on older vehicles -- you don't have that coverage for your rental, either. That means you could be held responsible for damage to or the theft of your rental.

"That's a big issue that most people don't think about," Worters said.

You might be saved by your credit card, particularly if it's a gold or platinum version that promises to pay for damage to a rental car. Even then, though, there are limits. For example:

• Certain vehicles, including SUVs, luxury cars, pickups and vans, often aren't covered.
• Long-term rentals (over two weeks, for example) may not be covered.
• Losses caused by an unauthorized driver or a driver who violates the rental agreement typically aren't covered.

If you get popped for driving under the influence, for example, or you take the car out of the geographic area designated by the contract, your credit-card issuer probably won't pay.

There's no shortcut: You need to review both your auto-insurance policy and your credit card's benefit guide. (If you don't have those handy, call the companies and have them send you copies.)

You also might consider taking the rental-car agency's coverage if you've had an at-fault accident recently or a series of other claims against your auto insurance. That way, you won't have to notify your insurer if you have yet another incident. The few bucks you'll pay for the coverage could be dwarfed by higher premiums or the hassle of finding another insurer after yours drops you cold.

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston’s award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Updated Nov. 12, 2009

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