Friday, April 23, 2021

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Car Hire Excess and Hidden Fees When Renting A Car in Australia

Car hiring companies are very notorious, so much that we have to put up our ‘A’ game each time we are hiring a car. Car hiring companies always have a way of extorting unsuspecting customers, its either they fix hidden charges that’s not on their catalogue or they make you buy insurance coverage that you don’t need in the first place. Although hiring a car is sometimes necessary, it could be a very frustrating experience, no thanks to the hyper-smart car hiring companies.

Imagine booking a vehicle online for a fair price only to find out that there are other charges and the original cost had somehow doubled. These hidden charges don’t only come up before you drive away in the car, they can be hidden charges at every point of your lease. The worst part is the list is endless; here are a few you should watch out for:

Premium Location Surcharge

The Premium Location Surcharge (PLS) is an additional surcharge charged by the car rental company when you hire a car from an airport or some city and remote locations. This surcharge is usually added to your rental vehicle cost, and it works on percentage, it is determined by the location you’ll be picking the vehicle from. For locations in Sydney especially airports you’ll be paying for PLS. This hidden charge is by percentage usually within 3% to 30% of the rental cost and will be charged on all the elements of your rental, just like VAT. You should be able to see the fees a car hire company will charge you in the terms and conditions of your booking.

Car Rental Excess Insurance

If you are hiring a car in Australia, the agreement usually includes coverage for a big crash, but you who will have to pay the first AUD$ 4,000 to AUD$ 8,000 (also known as “excess”). That’s why, car rentals try to convince tourists to purchase super CDW insurance so that they can get coverage for the first AUD$ 4,000 – AUD$ 8,000. However, car rentals charge steep premium in return, as high as AUD$ 150 a week, compared with AUD$ 50 a week when you purchase it separately. When you get to the rental company’s counter to get your rented car, the representative will try to offer you to purchase this coverage. This expense is added to the rental costs.

Insurance products sold by car rental firms are not a good deal. Aside from being overpriced, they have a lot of exclusions hidden in the fine print. Rental companies also exaggerate the cost of repairs and find imaginary damages. What many renters don’t know is that rental firms do not profit off their vehicles but earn money from other things they can bill to the customers, such as insurance. One way to reduce these costs is to purchase RACV car rental insurance. Another way, which is even cheaper and provide wider coverage, is to purchase 3rd party car rental excess insurance for your coming trip in Australia.

Additional Driver(s)

When you hire a car, the terms may stipulate that only you is allowed to drive the vehicle, this means your spouse and kids are not allowed to drive. Your insurance coverage may not cover damages caused by the additional driver. There are some friendly terms applied to this rule though, by some insurance companies at least. An example is a fact that; authorizing your spouse to drive your rented car during the period of the insurance may not necessarily require the extra driver fee. Another is that the extra driver fee may be charged for about 5 days only. However, the additional driver fee is still an excess payment to look out for when insuring a rented car.

Young Driver

In Australia, the legal driving age starts from 21, this means if you are less than 25, you don’t have up to 5 years driving experience. Your lack of enough driving experience means you are a high risk driver, and will be charged extra by most car hiring companies in Australia. What’s worse? The charges continue on a daily basis, irrespective of rental length.

Off-grid Driving

If you intend to do more than mere self-transportation to and fro certain locations, you certainly should be prepared to pay more. Driving on unpaved roads is an example of this and most car hire companies don’t allow it. Those who do, ultimately charge heavily or require the renter to pay fines if such intentions hadn’t been disclosed prior to renting, especially if such vehicle is later discovered to have been taken over mud, which had been somehow scooped into the engine.

Late Fees

The payment of some fine is a generally established charge in virtually all institutions across the globe, and car hiring in Australia is not excluded. Being an hourly charge, rent for a car is due every 24 hours and renewal becomes necessary, lest you will have to pay the late fees before the next cycle of billing. However, in Australia, car hire companies often allow an extra 59 minute before rent is considered as due. Therefore if you often fall into the clutches of late payments, I’d suggest you seek companies that allow such grace of an extra hour.

Car Accessories

Car accessories such as child booster seats, child support seat, and GPS are at the are common hidden fees car hiring companies include to the total cost of hiring a car in Australia. Other accessories such as mp3 players and car chargers don’t attract an accessory fee since they do not require special techniques to fix in a car. The good thing is that the accessory surcharge often only goes up to 10 days. If rent goes beyond ten days, you will not be required to pay for those accessories any longer.


Other car hire excess charges exist, different hiring companies have different methods of including these charges to the total cost of hiring a car. Its important that you take note of these charges and try to be a step ahead of the hiring company. It’s therefore, falls on you to make adequate research and ask questions about your chosen rental company before closing a deal with them.

Thanks for reading.
Feel free to ask questions if you need further assistance.

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