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Business Travel Travel Tips Vacation Travel

Car Rental Hidden Costs – Are they DRIVING you Crazy?

We’ve talked about this before, but I find that it’s always helpful to review the hidden costs of renting a car.
To begin, let’s say you’ve found a great rental deal for $20/day. Unfortunately that “great” rate doesn’t guarantee you a low-cost rental. Instead, upon returning your car, you find the price has skyrocketed and the bill now includes sales taxes, airport surcharges, insurance, and licensing fees. By the time all the extra charges are added on, the guaranteed result is a severe case of sticker shock … and a final cost double the initial alluring base rate.
So how can you avoid the shock of pricing overload? Here is a summary of car rental surcharges and a few tips for how to cut costs on your next rental.

Taxes and Airport Surcharges

Sales tax and airport charges vary considerably from state to state, and you won’t be able to avoid state and local sales taxes. Many local governments also charge fees to fund their own development projects, such as convention centers or sports stadiums, and some car rental companies also include a daily surcharge for economy recovery fees.
But avoiding airport charges is simple and something to always consider. You can eliminate airport concession recovery fees and customer facility charges by picking up and dropping off your car at an off-airport location. Weighing the possible inconveniences and the price of additional transportation to and from the airport against the concession fees charged by the airport location is, however, a must as doing so could save you more than 15% of your total price.

Insurance

This is usually referred to by rental companies as “collision damage” or “Loss Damage Waiver (LDW).” For an extra $25 – $30 a day, you can avoid liability for any damage to the vehicle, provided you’re not found guilty of gross negligence. Insurance is optional, although in a few states it is compulsory and built into the basic car rental cost.
So, before you purchase the extra insurance, check to see if your regular car insurance covers you in a rental car. Some policies do. Most credit cards also provide insurance if you pay for your rental with that card. Larger companies also include car rental addendums in their company insurance which also covers office equipment and the like. Keep in mind that limitations may apply to all types of coverage. If you’re not comfortable with the risk, consult with your insurance administrator or travel manager.

Gasoline Charges

Returning a car with an empty tank will create an extra charges to your bottom line.  In most cases you’ll want to fill up before you return your vehicle. However, car rental companies now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish.
Keep in mind that there is no refund for unused fuel, so you’d be paying a little extra for the convenience of skipping the trip to the gas station. Also, you may be able to find a better per-gallon price by shopping around on your own.

Drop-Off Charges

An extra fee is usually charged if a car is returned to a different location than where it was picked up. This fee varies by location. In some instances there is no charge, however you could pay more than $1,000 for picking a car up at LAX and dropping it of at JFK plus around $0.35 per mile.
If your corporation has a car rental contract make sure it notes a “one way” rate. The rates will be higher than your normal corporate rate but will save money in the long run.

The 24-Hour Clock

If you rent your car on Wednesday and return it on Thursday, most companies charge you one day only if you return it within 24 hours. Some companies will give you a 29-minute grace period before hourly charges kick in and after 90 – 120 minutes you may be charged for the full extra day. Some rental car companies are also now charging a late return fee of $10 per day.
Make sure you check the terms and conditions in your rental documents.

One Day Surcharges

Picking a car up only for one day will cost you more if those days are Monday through Thursday.  Because of the yield management process, it is more expensive for the car rental company if you pick your car up in the morning on Monday through Thursday and return it the same day. It eliminates the possibilities of another traveler needing that car for two or more days at a time. The one day surcharges are $5 to $7 over the normal daily rate and are “hidden” in the rate so you will not recognize you are being charged extra. Corporations can sometimes get this fee reduced or waived when negotiating a car rental contract.

Age Penalties

Renters under the age of 25 may have to pay additional fees of about $25 – $30 per day. Those companies who rent to drivers under 21 often charge much steeper surcharges. Those over 70 may also have to pay extra (if they’re able to rent at all).  Age restrictions vary by country and franchise, so be sure to check ahead.

Frequent Flier Fees

Car rental companies often charge a small fee when you request frequent flier miles for your rental. The fee varies by airline and can range anywhere from a few cents to $2 a day. Another choice would be to opt for the free day program instead of earning miles. There is not a charge for earning free rental days and are usually earned for every 15 days rented.

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Travel Management Travel News Vacation Travel

Car Rental Companies – Covering It All

With the recent announcement of Hertz purchasing Dollar & Thrifty, all three major car rental companies now cover everything from corporate business to leisure travel business. The purchase announced earlier this week is in the amount of $1.17 billion in cash and stock. The purchase of Dollar & Thrifty will significantly expand the vacation/leisure portion of their business.
Hertz is already the world’s largest car rental company by locations and with this latest transaction it boosts their total to 9,800. “Together we will be able to compete even more effectively and efficiently against other multi-brand car rental companies, offering customers a full range of rental options in the U.S.,” Hertz CEO Mark Frissora said in a statement.
The three major U.S. car rental companies, each with two or more large brands are Hertz, Enterprise Holdings Inc. (Enterprise & National) and the Avis Budget Group. Enterprise Holdings Inc. has 7,600 locations, the Avis Budget Group has 6,900 and Hertz now has 9,800.
Competition is always the name of the game and Monday’s announcement comes after the Avis Budget consolidation in 2002 and Enterprise’s acquisition of Alamo and National in 2007. Advertising, marketing and commercials seem to be on the increase as well, follow these links for a little entertainment (some old, some new). To rent your next car, contact Christopherson Andavo Travel at 801.327.7700 or 303.740.3000

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Business Travel

Shall I drive my own car… or rent one?

Owners, financial guru’s and sourcing managers, mileage reimbursement is a huge expense when employees drive their own cars for work purposes.  Did you know that based on a reimbursement rate of $0.50 cents anything over 120 miles driven by using a personal car is more expensive than renting one?   Companies both large and small that require their employees drive their own cars are reevaluating the reimbursement process and switching to renting cars instead.  Enterprise and Hertz (their off airport locations called Hertz Local Edition) both have programs that will bring your rental car to you.  The car will be delivered to your home in the morning and then you drop it off at the rental office and they will take you home.  It’s very slick and easy.  Here are a couple of other reasons why renting a car makes more sense then driving your own.  1- Less chance of breaking down on the road.  A rental car will usually have less miles and the necessary maintenance will have just been done.  Plus if it does break down you don’t have to foot the bill for the repairs.  Yes!!!  2- Less wear and tear on your own car.  Consistant long distance driving will wear your car out much faster than normal.  Save those miles on your own car and put them on a rental.  3- Renting a vehicle will give you the opportunity to try out a car you might want to own some day.  With National Car Rentals “choose your own car” program you get to decide from several makes and models which car to drive.  Perhaps a PT Cruiser… or a hot Dodge Charger has been on your list to try out.
Here is a mileage calculator link by Enterprise Car Rental that will help you determine if driving a personal car versus a rental car would be the greatest value.  Plug in the numbers and it will automatically calculate it for you.  Rental rates are based on current Enterprise daily rates and are also changeable.
To reserve your rental car contact any one of our professional travel consultants at 801-327-7700.  You’ll drive away happy!

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Travel News

Attention all rental car drivers

Cashless toll roads are becoming a huge problem for car rental companies who in turn are hiring third party collection agencies. These agencies then tack on outrageous fees which show up on a renter’s credit card bill sometimes months later.
For instances on my last trip to Denver I did not sign up for the daily toll road access fee figuring I would not need to travel on E-470 (cashless toll road) which is exactly what happen. What if, however, at the last minute my meeting ended late, there was a horrific accident on I-225 backing up travel for hours; what would I have done? Most likely wanting to get home that evening I would have taken E-470 in order to make my flight and then worried about the fee later. With some rental car companies you have a choice of a daily toll fee of $8.95, or $32.95 a week…OR… by declining a fee and then driving on a cashless toll road receiving fines long after your expense report has been completed, approved, and paid.
In Jeffrey Leib’s article in The Denver Post, Nov 29, 2009, “Cashless E-470 takes toll on rental-car drivers in the form of fines,” he talks about how irritating the problem can be and how one traveler was fined $125 – only $11 being toll fees.
Christopher Elliot on his blog, www.elliot.org discusses this same problem, http://www.elliott.org/blog/are-car-rental-companies-overbilling-customers-for-toll-violations and how charges and fines are also showing up months later for supposed traffic violations, http://www.elliott.org/blog/help-my-car-rental-company-charged-me-for-running-a-red-light.
In other words – BE AWARE!!

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Travel News

Those hidden charges when you travel

As I was sitting here trying to come up with a good topic for today’s article, I took a call from a client who wanted to know why the airfare that I quoted yesterday had gone up $50.00 and why the advertised price on the airline website showed a lower price until it was booked, when the price jumped up considerably.
I explained to my client that airfares are not guaranteed until the ticket has been issued.  He said that he knew that but he couldn’t believe that the airlines would raise the fare that much and that quickly.  I then pointed out that domestically the airlines change fares about a million times a month according to a number of industry reports.  Sometimes they go up and sometimes they go down but they change constantly.  What was harder to explain was the fact that the base price of the airfare had remained unchanged overnight, what changed was the fuel surcharge.  The fuel surcharge is a means for the airlines to cover the higher cost of fuel without having to raise the fare.  Why would they want to do that?  It’s really a case of marketing and nothing more.  The airlines have learned that if you can advertise a low fare, you get increased business, even if the actual cost include taxes, surcharges, etc. is significantly higher.  People plan on going and once they get into the process of booking, they don’t like to back out, even if it is more expensive than they had originally thought that it would be.  There are those out there who accuse the airlines of bait and switch, I’m not one of them because they aren’t offering one thing to get you in the door and then switching to a more expensive item, no, I think what they are doing is deceptive but it doesn’t really fit the traditional definition of bait and switch.
Let me give you an example of what I mean.  Right now, Icelandic Air is offering a roundtrip fare from New York City to London and back for $68.00.  That is the advertised price.  There generally is an asterik that directs your attention to the fine print.  Some restrictions apply, the price doesn’t include taxes, fuel surcharges, etc. and so forth.  This disclaimer allows the airlines to advertise one price but that price doesn’t include a lot of what you might expect to be included in the price of an airline ticket.  In the case of Icelandic Air, the base fare is $68.00, there is currently a fuel surcharge of $111.00 in each direction or $222.00 roundtrip, so just for the seat and the fuel, you are looking at $290.00.  Then comes the taxes that are levied on your airline ticket.  There is the $5.50 Customs User Fee, the Immigration and Naturalization Service Fee of $7.00, the US tax of $32.20, the Animal and Plant Health Inspection Fee of $5.00, the USA Passenger Civil Aviation Security fee of $2.50, then there is the British tax of $73.42, the Air Duty fee $34.59 and last but by no means least, the Passenger Facility Charge of $4.50.  That’s $156.55 in government imposed taxes and fees.  That brings your grand total to $468.55 for the airline ticket that is advertised at $68.00 roundtrip.
And to be fair, we can’t single out the airlines for this, the car rental companies do the same sort of thing.  The daily rate for your car rental might be $45.00 a day, plus taxes and surcharges.  A couple of weekends ago when I rented a car and they were running down the list of fees, which included a fee for recovering the cost of doing business at the airport and an “energy surcharge”.  When I asked about that one I was told that it had to do with covering the cost of filling the vehicles up.  I pointed out that I return the car full or they charge me some outrageous amount per gallon to fill it up or if I’m going to be doing a lot of driving I take the prepaid fuel option.   Either way, I’ve already covered the cost of filling up the car.  I don’t think it is right to ask me to pay to cover the cost of me filling up the car.  When I asked the representative of the car company, he told me that it actually goes to cover cost of things like lights and such.  When I pointed out that was part of the cost of business, he told me that the car rental companies are afraid to raise their rental rates for fear of driving off customers and so they have followed the airlines lead in tacking on fees that hide in the fine print.  And here again, let’s not forget the 12% to 20% in taxes that State and local governments impose on car rentals.  It isn’t unusual for taxes and fees to make up 35% of the final bill on a car rental.
Lest you think that this trend is confined to just airlines and car rentals, hotels are just as guilty for adding charges, like resort fees for amenties that you may or may not use or a fee for “free local” calls, even though you are using your cell phone or a number of other creative revenue sources that hotels believe that they can bill their customers for without it negatively impacting their bookings.  The problem with most of these fees is that the hotel doesn’t allow you to opt out of them, which would seem to make them part of the room rate.  And then you get the taxes and fees charged by State and local governments that are used to build sports arenas or are used to fund other local projects that the local voters don’t want to pay for.  This is called taxing those that can’t vote you out of office.  There is a downside, if these get to be too painful, conventions and tourists will stay away.
While I understand and truly appreciate the need to turn a profit.  I think these companies are underestimate the ill will that these practices generate among consumers.  If you visit any number of consumer travel related websites and read the comments or follow travel discussions online, you see a lot of comments alluding to the fact that customers feel like they are being taken advantage of by many businesses in the travel industry.  While the consumer may be powerless when all the airlines or all of the car companies, etc., adopt the same practices, it doesn’t mean that they like it and it certainly isn’t viewed as good customer service.
I would suggest that it makes sense to unbundle certain costs however when one unbundles fuel from the cost of a flight, I have to ask, exactly what is the customer paying for with the base fare?  Shouldn’t that be included in the airfare?  Likewise, if it is unbundled, doesn’t that imply that the fee or item is optional and the consumer should be able to opt out of it.  For example, the fee for each checked bag allows passengers who travel light to choose not to check a bag, whereas those who need to take more along on their trip, can pay for it.  With some of these fees, the consumer is not given that option, in which case, I believe that cost should be included with the base rate charged for the service.
As far as government imposed taxes and fees, I understand the motive of taxing those that don’t have a say however one needs to be careful not to kill the goose that lays the golden egg.  If the taxes and fees get to be too burdensome, people will decide to go elsewhere.  Anyone remember New York City when their room taxes and fees were hitting 20% and conventions and tourists started going elsewhere.  And when you have taxes and fees on an airline ticket that are double the base fare, that seems excessive.  While there aren’t many options to flying transatlantic, it may discourage people from traveling and that is bad for all of us.
So next time you think that the price you are paying is too much, take a look at the breakdown of what you are being charged.