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Many travelers prefer to pay
for rental cars with credit cards. In fact, if
you don't have a major credit card, you may find
that some car rental companies will not rent you
a car, or will require a large cash deposit to
cover any potential damage.
Are you covered? You may
even save money when you rent a car using a
credit card, since some credit card issuers
offer free protection in case of accident, loss
or damage to the car. This protection, often
referred to as collision damage waiver (CDW), is
not usually insurance, but is an agreement under
which you won't be liable for the loss or damage
as long as you comply with certain conditions.
Some credit cards offer primary protection,
which pays for damage or loss without requiring
you to first file a claim with your personal
auto insurance coverage. Others may provide
secondary protection, which covers any damage or
loss left unpaid after you have made a claim to
your auto insurance company.
Many auto rental companies
sell CDW protection for fees at daily rates
which can add up depending on the duration of
your rental. If you have adequate protection
through your credit card issuer and/or under
your own auto insurance policy, you may not need
to purchase the rental company's CDW unless the
country you are driving in requires you to do
so. If you do not purchase the rental company's
CDW, be sure you clearly decline it when you
sign the rental contract.
Ask your credit card issuer
before you travel if it provides CDW, if it
applies in the countries where you will be
driving, exactly what is covered (for instance,
personal injury or personal property may not be
included), what restrictions and limitations may
apply, and how the claims procedure works.
Check with your travel agent
or the rental company before you travel to make
sure you can use your credit card CDW. Not all
rental companies accept credit card CDW, and in
some countries, such as New Zealand and Italy,
as of this writing, customers are required to
purchase the rental company's CDW, even if their
credit card offers coverage.
If you violate the car
rental agreement, the CDW may not cover you. For
example, if you have an accident in a country in
which your car rental agreement prohibits you
from driving.
Some additional tips for
renting cars overseas: Ask your travel agent
before you leave if you will need and
international driver's permit to drive in the
countries you're visiting.
When you rent a car, the
rental company may place a "hold" on
your credit card for anticipated charges, plus
incidentals. The amount of the hold is
"frozen," which means you'll have less
credit available for other purchases. Ask the
clerk how much the hold will be and when it will
be removed. To avoid tying up your credit line,
you may want to use one credit card for car
rentals and hotels, and another for daily
purchases. This may be less of a problem with
cards that do not have credit limits.
If you purchase pre-paid
vouchers for car rentals, keep copies of them
for your records, ask for confirmation from the
travel agency that the rental company was paid
for the voucher, and ask for a receipt from the
clerk when you present the voucher. Keep in mind
that these vouchers may not cover all charges
(taxes, re-fueling, or CDW, for example), or may
not cover additional fees if you change your
reservations (such as the location or date of
pick-up).
Report any problems with the
car to the rental agency immediately and keep a
record of who you spoke with. It's best to try
to resolve any problems on-site before you
leave. If you wait until you return to the U.S.,
you may find it difficult or impossible to
resolve the problem to your satisfaction.
Try to report any accidents
or damages to the car rental company and your
credit card issuer (if you're using the credit
card CDW) within 24 hours. Take pictures of the
damage, if possible.
If your plans change and you
want to keep the car for a shorter or longer
period of time than you had agreed, get details
in writing about extra charges such as mileage,
daily charges, or drop-off fees
Avoid dropping off your car
at the last minute. Return it early enough to
allow time for inspection and to resolve any
billing problems or questions. If you drop off
the car and fail to get an inspection, it may be
difficult to prove what damage is yours, and
what occurred after you dropped off the car.
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