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Wednesday, 15 July 2015 13:09

Car hire firms to provide more transparency to customers, says regulator

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Car hire firms are being made to act on customer complaints as regulators enforce new rules to make the industry more transparent.

Five of the biggest car hire firms in Europe have promised to act on customer complaints and the way they will be dealing with their customers, following reviews by regulators. These car hire companies include Avis Budget, Enterprise Rent-A-Car, Europcar, Hertz and Sixt.

The CMA (Competition and Markets Authority) said it was keen to help motorists avoid “nasty surprises at the rental desk” where some customers say they feel pressurised into buying excess insurance at the rental desk as well as being charged for damage to the hire car which many drivers say they didn’t cause and with few options to formally log and dispute such charges. As well as this the CMA also looked into fuel policies, as many hire car customers expressed their frustration at not being given an option to return their hire car with a full tank of fuel.

The changes are to benefit motorists hiring cars both in the UK and abroad and should also help set a benchmark for the rest of the industry.

The CMA has worked closely with the trade association the British Vehicle Rental and Leasing association (BVRLA) following a review of its UK Code of Conduct. Improvements similar to those adopted by the main car hire businesses have been adopted into the Code. The revised Code will be launched at the beginning of 2016

These are the issues that will be addresses within the next six months across the European Union:

  • A “lack of transparency” on pricing and contract terms – for example, where the headline price appears low but extra compulsory charges are added at the rental desk, resulting in a much inflated final price.
  • The way in which people are pressured to buy the rental companies’ own additional “waiver” products, typically to cover the excess not covered by the basic insurance.
  • The “lack of transparency and potential unfairness” of some car rental firms’ policies on fuel. Some firms operating in Spain make drivers pay up front for a full tank of fuel, then insist they return the car empty.
  • How vehicle damage is assessed and charged for, and how disputes are dealt with.

At iCarhireinsurance.com we feel that this is a very positive outcome as customers can now purchase insurance through specialists insurance providers like ourselves with peace of mind that the CMA is on their side and they shouldn’t be pressured into expensive excess waivers and charges at the rental desk.

Ernesto Suarez, founder and CEO of iCarhireinsurance.com, said:"The fog of transparency that car hire firms have been operating in has been a scandal that we’ve been campaigning against since we launched in 2010. We're delighted that the Competition and Markets Authority (CMA) has exposed these sharp practices for what they are and agreed a strict code of conduct for the rental companies.

"Car hire excess insurance is always the largest single outlay for travellers at the rental desk and can add around £100 onto a week's hire which is sometimes more than the original car hire cost! We run quarterly studies into the price of car rental and extra costs at the rental desk across Europe and this consistently reveals that extras can double or even triple the original rental price.

"We've long called for customers to be allowed to make an informed decision on car hire excess insurance, rather than being pressurised, and rushed, into buying the rental company's excess waiver policy when they're tired and stressed from their journey.

"Customers will now be able to do their research and buy a car hire excess insurance policy from a specialist provider like our own which is regulated by the Financial Conduct Authority (FCA) and offers more comprehensive cover than most rental company policies."

Last modified on Wednesday, 30 September 2015 09:11
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