Car Buying Articles

Confessions of a Rental Car Agent

How To Avoid Overpaying for a Rental Car


  • Enterprise

    Enterprise

    The rental car business is incredibly competitive and each company tries hard to build brand loyalty. | October 06, 2010

5 Photos

Upgrades, insurance, fees, pre-paid gas: A rental car company can sneak a lot of unexpected charges into your contract. And those items can add up a lot more quickly than you realize. To arm yourself for your next rental car experience, take a look at what goes on behind the scenes. In this Confession, a rental car agent who soured on the business and left it guides you through the rental car maze and tells you how to save money.

You see a name like Hertz or Avis and you think you are dealing with a reputable company that won't play games. But the whole rental car industry is organized chaos. There are a limited number of cars and sometimes too many drivers. But if you know how it works, you can rent a car for less and avoid the unnecessary charges that can really add up fast. I should know — I worked for a major car rental company in many different locations in the Los Angeles area. Here's my take on the business.

Rental Car Agents Have a Personal Stake in Selling You Upgrades and Insurance
Where I worked, I was paid $12 an hour, plus the promise of promotion. I started at the bottom and they promised to get me promoted to assistant manager, which is when I could begin to share in the revenue. I would make even more if I was a branch manager. So the managers pushed me, because it's money in their pocket.

Selling products above and beyond the car was essential for survival in the business. If someone walks out with a killer deal, takes the cheapest car, takes no "protection," which is their term for insurance, takes none of the other products we offer — it reflects poorly on me and ruins my likelihood of promotion. So you learn: If you want to get ahead, you'd better sell.

Where I worked, they liked to hire athletes and class clowns — real "people" people, life-of-the-party types. I wasn't a natural salesperson, and had major problems with how aggressively they expected us to sell products. We had training seminars where we learned to isolate objections, to tap into people's insecurities. I was told to ask "guided questions" to see what kind of a person I was dealing with. Were you fearful? Were you concerned about safety?

You Probably Don't Need Rental Car Insurance
I'd say that about 60 percent of the people buy the insurance. That's pretty outrageous because only about 10 percent of them need it and we charged $26 a day for full coverage. One day, 30 people came into the rental car office where I worked and we sold all 30 people insurance. We didn't think about how 30 people just got screwed — instead we went out for beers and celebrated.

The insurance we sold was an incredibly high-profit item. Actually, the insurance was provided by a third party so we paid the third-party insurer and the rest was pure profit. We offered the insurance in four components:

  • Collision damage waiver, which covers any damage to the vehicle
  • Personal accident insurance, which takes care of the people in the car
  • Personal effects coverage, which covers your property
  • Supplemental liability coverage, which covers third parties in the event of an accident

We had week-long training sessions about how to sell these products and how to add value to them. Often, people wound up signing out of sheer fear. Was there any value to the insurance we sold? Only if you didn't have your own insurance.

The most senseless product we offered was the personal accident insurance, which we bundled with the initial product, the damage waiver, for the vehicle. It was redundant — other pieces of the policy already covered you in the event of an accident. As long as I worked there, no one who bought it ever filed a claim.

Beware of Car-Category Ploys and Expensive Upgrades
We grouped the cars into semi-ambiguous categories: economy car, compact, standard, full-size car, intermediate car. To say an Altima is bigger than a G6 is dubious. It is done that way to maximum freedom for the company, so that if we had a PT Cruiser out on the lot and someone had a full-size reservation, we'd just say, "There's your full-size car!"

We were urged to try to get people to upgrade. My favorite style of selling an upgrade was to keep things vague so they wouldn't know they were agreeing to a major increase in expense. I'd ask: "So, would you like to upgrade for only $5 more a day?" When people isolate numbers, they don't understand them. So if someone has this car for two weeks, it's $5 multiplied by 14 days — that's an expensive upgrade for not too much more vehicle.

You should also know that if the rental car company offers you an upgrade, it might be because they don't have your vehicle class on the lot. Instead of admitting this, they try to sell the upgrade to you first. Say you came into our branch with an economy reservation and all I had was an Impala. I'd say, "Sir, there is an Aveo on its way back in just a few minutes. But it looks like you're in a hurry and I could get you going in this car for only $5 a day more." That's $5 I wouldn't have made otherwise. If you waited it out, I probably would have upgraded you for free.

Keep Your Eye on the Out-the-Door Total
We sold our products by keeping things vague and quoting numbers based on daily rates without referring to the total, which would include fees and extra charges. So people would walk out the door after renting a car, thinking, "Great, I'm only paying $25 a day for the car." But in reality, we had tacked on $5 extra per day for the upgrade, sold them full insurance for $26 a day and got them to pop for a full tank of gas. Now they're paying closer to $55 a day — more than double what they thought they were paying.

When the customer came back, that's when it hit the fan. Our guys would be out in the lane with the little handheld computers, saying, "Welcome back! Your total is..." And that's when you get apprehensive, because you don't even want to say the total. Finally, when you tell the customer, "Your total is going to be $600," you know you're going to get yelled at. I never had a day where we didn't have at least one very unhappy person.

Prepaid Gas Might Save Time but It Costs You Money
Prepaid gas is purely for suckers. Unless you are desperate to save a few seconds, you are wasting money. But you'd be surprised how many people buy it anyway. That's because of the way it is sold; it's never clear what you're paying for. So if you prepaid for a tank of gas and brought it back with even 5 gallons left in the tank — which is pretty typical — then you lost money. You just gave the rental car company the value of 5 gallons of gas. Unless you push the car back onto the lot with an empty tank, you lose money prepaying for gas.

Time Your Reservation To Maximize Savings
I hear a lot of advice about how it is important to make your reservation sooner rather than later. This isn't always true. For example, say there's a football game and the rental car companies anticipate a boom in rentals, so they raise their rates. But then the two teams who make it into the playoffs aren't interesting and the boom never materializes. The prices will drop significantly. The prices could go from $80 online to maybe someone walking in and paying $30 a day. And $30 will more than cover the company's cost of most rental cars.

Complain Calmly and Threaten Them With the Competition
If you don't like something about your rental car or the contract they are offering, the best approach is to be polite but firm. If I had a customer who insisted on being a jerk, I'd give him that Cobalt that smelled bad. It's the equivalent of a waiter spitting in a rude customer's soup back in the kitchen.

The rental car business is so competitive that everybody wants to build brand loyalty. To prove this, if you're not getting what you want, just say, "You know what, I'll call Hertz" or one of the other competitors. The next thing you'll hear is "Sir, we'd be happy to upgrade you for free." Or "I'll take 10 percent off that." Or, "We can give you one free day." Those kinds of freebies are handed out all the time.

Read more articles in the Edmunds Confessions Series.

Comments

  • elliott10 elliott10 Posts:

    I found I just had to make a contribution to these articles for the sake of truth. After 12 yrs. at the largest and most known and respected rent a car company (the yellow one) I know what selling was about. It was a legitimate sale. Did you know that if you rent a car and it is either vandalized, stolen or wrecked you are responsible for the full value of that car+all administrative and/or towing fees. Did you know your insurance company will only cover damages up to the value of the car you actually own, (if you own a Chevy and you rented a Town car) and that your credit card may pay the deductible of your insurance but you are left to cover the administrative expenses which include removing the car from the impound lot, the actual towing which after the accident is referred to as a "recovery charge" by the towing company after an accident. A wrecked car is after all a deminished value car for which you may also be responsible as the car is worth less by all book accounts. Are you aware that the liability protection offered by the rental company is one million dollars without involving your insurance company. I once rented a car to someone who ran thru a stop sign and t-boned another car with 4 occupants. All 4 were airlifted to a trauma center for treatment of their injuries. The customer came in very worried. After advising him that as long as claims were under 1 million he was covered. That man almost kissed me as he walked away worry free. He had actually bought not only liability protection, he also bought peace of mind and eliminated the lingering effect of the consequences. You are offered an upgrade, you just might get a convertible for $10 more than that little economy car you booked. And here in Fla. we many times had excess convertibles to offer as upgrades during the work week. I despise hearing rental car companies referred to as rip-offs, etc. Those of us who have worked for the best, and most are honest sales persons of uncompromising integrity have repeat customers who actually ask and request our services by name. If your Iphone is stolen while your rental contract is open, even if the phone was in your possession and not in the car, did you know that it is covered if you bought the Personal Effects Protection? If you dont have homeowners insurance you just need another iphone!!! These "insurances" protect you, the customers while travelling and away from home. I have rented Hummers (H2) for over $500 a day during periods of peak demand to customers which just had to have one. I have rented Shelby's for similar amounts. It made my customers vacation an unforgettable event in their lives, others on a honey moon have been upgraded to a convertible Jaguar XK8! They have voiced their appreciation for the suggestion when they returned it. Just think of the time when you had an upgrade request and none were available? What a turn off? Yes, we are on commission and a darn good one, but no one ever puts a gun to your head and obligates you to purchase that which you do not want primarily because you have not let the rental agent explain it while you listen with a discerning mind. EE in Miami.

  • chaz25 chaz25 Posts:

    LOL, from your description and from having worked there as well, I know you worked for Enterprise. I thought the picture was just a coincidence. LOL

  • chaz25 chaz25 Posts:

    I also worked for Cendant, which then became Avis Budget Group as a Counter Sales manager and then an Agency Manager (= Area manager in Enterprise speak) What a bunch of crooks they are, Avis Budget that is. Absolutely no ethics at all. Enterprise was far better. I don't work for either any more. I got out of that industry after 10 years or so.

  • jane124 jane124 Posts:

    As another salesperson who no longer has to try to convince people to act against their self interest, I have to say that what is in this article is absolutely 100% correct. The other "12 year sales person" in this comment section? Look at what he writes - this is what a high pressure rent-a-car salesperson will throw at you when trying to get you to buy expensive, worthless insurance. His schpiel in the comment section is almost identical to what they teach you to say to customers. Most of them know it's nonsense, but some of them, after screwing over as many customers as they do, almost convince themselves that what they're doing it the "right" thing to do. They will pull out one or two anecdotes of when the insurance may have come in handy (do the math - 1 or 2 positive insurance anecdotes out of tens of thousands of sold insurance packages where people got screwed.) They operate on fear - it's like the lottery in reverse: the chances that you would need their insurance in any event is so remote as to be almost 1 in a million - but they make it sounds like it's almost certainly. So it's like the lottery, but you don't have a chance of winning anything, and you're certain to lose. Always ask for the total. Make sure to find out exactly what your bill is going to be before you leave. Above all, remember this: these people are humans, they're like other people - mostly - and they will be super friendly with you. But you have to remember that they are NOT on your side. Don't think of them as "having your back" - they do not. Their job is explicitly to get as much money as they possibly can from you. Period. As long as you go into an interaction with them knowing that, you can do okay. Oh, one other thing: your experience is likely to do with the rental location you go to. Always take your own camera - or your phone now - take pictures of the car before you drive it off the lot and send them to someone else you know so they have a record of it until after you return the car. Most places are not going to outright defraud you, but some of them absolutely will if given half a chance. PS. They will almost always try to sell you "peace of mind." Don't let them get going. If you have insurance, politely decline the insurance and don't let them go any further. They may not be happy that you're not letting them screw you, but if you're nice, they usually won't try and punish you for it. Good luck. And watch out for the salespeople like the guy who posted in these comments. They're the worst.

  • showguyer showguyer Posts:

    What a bunch of crap that 12 year rental agent wrote. lol obviously this is the line he uses on a daily basis....First of all, my personal insurance covers the car completely, not just what my own vehicles value is. Trust me, I know from experience. When I was 19 years old, I totalled a brand new rental pickup truck. I mean brand spankin new. Flipped it 3 times. My insurance covered the whole thing (and I only had a little pontiac at the time). I cannot stand some of these high pressure agents. I typically rent a car 2-3 times a year when Im going away or on vacation because I have an older truck, and its cheaper and better in the long run to rent a car. Better mileage, and less mileage on my truck... I book my reservation online, so if I wanted any extra services or upgrades, i would have done it right online. Im fully and double covered under my personal insurance and credit card insurance. So there is no need to purchase this overpriced ripoff insurance these companies offer, and I tell the agents right off the bat that I dont want it. Typically they get the feel from me and know I dont want to hear their sales tactics. I tell them I want the midsize rental I reserved. No gas, no insurance. no upgrades (Unless they are free). They are all tactics to increase the companies bottom line. That is it. The gas tank offer is the worst!

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