The hidden costs of car hire
Car hire can look very cheap with prices for a medium-sized car costing as little £75 per week. But have you ever stopped to think about how they can afford to offer such low prices? Just think that car costs them £15,000 to buy so at that price it would take them almost 4 years to recoup their initial outlay and that’s before you even consider the costs of maintaining the car and running the business. Yet most rental cars don’t even make it to their first birthday with many of the large car rental companies replacing their cars every 6-9 months. So how do these companies make their money?
Basically what is happening is the car hire companies are offering the cars at a loss to entice customers in, then they make their money by selling a bewildering range of insurance policies and extras. By now they have already hooked you on the idea of hiring a car and use your fear of the worst to sell. Here are just a few of the most common types of insurance:
Collision damage waiver (CDW). This is the basic cover and it reduces your liability in the event of an accident. Without it, you could be forced to pay for the replacement cost of the vehicle.
Theft waiver (TW). The equivalent of CDW but protects against theft. Also known as theft protection.
Super collision damage waiver (SCDW). Reduces your liability to zero and covers tyres, roofs and windscreens.
Personal insurance (PI). Pays out if you kill or injure yourself or a passenger, usually covered on regular travel insurance.
Personal effects cover (PEC). Pays out if your property is stolen from a vehicle, usually covered on travel insurance.
To make matters worse the car hire companies have developed lots of fancy names to help market these insurance products making it virtually impossible for anyone without a legal degree to easily compare one companies offering with another. The first thing to do is check what cover if any you already have on your existing travel insurance policy as there is no point paying twice for the same cover. The next thing to check is what is included in the price, it’s usually just the bare minimum required by law so leaves a lot of things uncovered.
You’ll probably want some additional insurance (especially if your standard excess is very high) over and above what is included in the price but don’t just opt for cover from the car hire company. If you search around you’ll find standalone cover is substantially cheaper, often by as much as 70% which on a 2 week hire could easily save you over £100. If you are just hiring a car for a couple of days then the savings may not be worth the effort, but if you do this a couple of times a year then the savings on an annual policy are probably worth looking into.
Next they will try and sell you extras such as child seats, sat-navs. If you need a child seat then you may find it’s well worth packing to take with you and if you have a sat-nav in the UK you may find its a lot cheaper to buy overseas maps rather than hire this when you get there. In fact with many car hire companies charging in excess of £10 per day for having sat-nav in the car you could even buy your own for less than hiring it for 2 weeks!
Your car hire bill will still soar as you move closer towards booking as they’ll add compulsory taxes, airport pick-up fees, different location drop-off fees, young driver surcharges, additional drives fees and many more. Be sure to include the prices of these extras when comparing different car hire companies as they’ll often cost far more than the actual cost of hiring a car and most of these charges can’t be avoided.
Before you rush to book car hire for your next holiday make sure you consider whether you really need it. If it’s really only for getting to and from the airport and a few short journeys once you get to your destination you may find public transport is a much better option, or you may even find that taxis are cheaper.
How to find the cheapest hotel prices
Before you even start searching for hotels research the areas you want to stay in, this is particularly important if you are staying in a city as there is likely to be hundreds of hotels to choose from. This will ensure you focus your search and don’t get bogged down trawling through lots of unsuitable option. Once you have a rough idea where you want to stay then it’s time to hit the comparison sites.
Firstly start with the big name travel brokers such as Expedia, Hotels.com, Ebookers, Lastminute and Travelocity. You’ll often find these come back with very competitive rates that are hard to beat elsewhere. You’ll quickly notice that the number of stars hotels has varies by website so don’t pay too much attention to them as it’s a flawed system of rating hotels online. Instead check reviews on Tripadvisor which is a site that allows past guests to rate and review hotels. If there are plenty of good reviews then you have probably found a good hotel, but its worth remembering that everyone has a different view of what makes a good hotel. For example if you are looking at European hotels you will probably find plenty of Americans complaining about small room sizes, it’s not that the rooms are particularly small but more often just a case of them being used to far larger hotel rooms back at home.
Once you have found a couple of good hotels it’s time to see just how low you can get the nightly rate. I always start by looking at last minute prices as if I was going in the next week as these are usually the lowest possible prices you’ll ever be able to get. Armed with this information it is worth contacting the hotels reservation manager direct asking if they would let you book a room at this rate for the particular dates you want. Unless you are going at a particularly busy time then you’ll usually be able to negotiate the nightly rate down close to the lowest rates you have found for other dates as the reservations manager is normally authorised to go to this level.
If the hotel is not willing to negotiate the price you pay then ask for a free room upgrade or breakfast to be included etc. The value of this to you is far more than they pay for it and if it gets them a booking they’ll normally agree. Remember if you have found several suitable hotels then each individual hotel needs your booking more than you need them!
Finally if you are on a tight budget then consider staying in hostels as they may not have all the facilities of a hotel but they are usually well located and are a great option if you just need a bed to sleep in every night.