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Hidden fees with car rentals

Be sure to ask about extra charges and taxes

Shopping around for a car rental? Listen up: If you don't ask about surcharges and taxes, a few agencies may seem to offer a dramatically better rate.

That's because some car rental agents quote only the base rate - not including taxes, fees and surcharges. Agents with other rental companies give a figure that includes all surcharges and required taxes - and that often adds 30 percent or more to the bottom line.

Such surcharges are status quo in the car rental business these days. But many agencies now inform consumers about these charges up front, both in phone quotes and on their Web sites.

Pressure from the National Association of Attorneys General and a class-action suit in Seattle may have helped prompt that change.

The association set up a task force last year to check into advertising and rate information by car-rental companies, noting that the companies "may not fully or clearly and conspicuously disclose the fees, taxes and surcharges."

"This puts them on notice that attorneys general across the nation are looking at these issues, and that gets their attention," said a spokesman for the Texas Attorney General's office.

Just as airlines have forced consumers to take on the burden of fluctuating fuel costs with the "fuel surcharge," car-rental agencies in recent years have been passing on separately costs that could be considered part of their overhead, such as airport rent and vehicle licensing. Unlike the sales tax and other taxes, companies are not obligated to add these charges separately onto the price of the rental. And handling the charges this way saves companies money because they aren't included when calculating commissions to travel agents.

The most common surcharge is the airport "concession fee," which tacks on separately what the company pays the airport, usually 10 percent of the car rental price. It is now an industry-standard surcharge in most airport locations - except for California, Illinois and New York, which have laws prohibiting companies from adding that cost separately from quoted rates.

At the Dallas Fort Worth Airport location, combined taxes total 15 percent, among the highest in the United States (Seattle is even higher, at 18.3 percent). Companies also add a "Reimbursement Charge," which varies but runs about $1 a day, a "Customer Facility Charge" at $3 a day, and the 10 percent airport fee.

The reimbursement charge is allowed in Texas for car-rental companies to pass on to consumers the cost of licensing, registration and personal property taxes on their fleets. The $3 per day facility charge is imposed by the Dallas airport to recover the cost of building a consolidated car rental facility.

In phone quotes for a weekly rental at the Dallas airport from Hertz, Avis, and National, the total was $269, which is 44 percent higher than the base price of $187. Giving a phone quote for the same period and location, Thrifty's agent said the rate is $137, "which would not include tax and surcharge." When asked, the agent tallied the bottom line at $206.

On their Web sites, Hertz and Avis list all taxes and surcharges when quoting a rate. Thrifty shows the base rate prominently, and then lists the other surcharges and taxes in fine print under "Terms and Conditions" without calculating the estimated total. On Dollar's, the total doesn't show up until you make a reservation.

Comparing rates through a centralized Web site, such as Expedia.com, it looks like it would cost just $131 for the week's rental through Dollar Rent-a-Car, the cheapest. Only by clicking the link to "verify rate" and then clicking on the small-print link for "taxes and fees" does the list of additional charges come up. The Web site, though, doesn't calculate the total.

Hertz says they disclose the full price up front because it's better consumer relations.

"We truly feel that disclosure is the best policy, so that customers are not surprised at the end of the day," said a spokesman of public affairs for Hertz. They said that has been the company's policy for "a few years."

An Avis spokesman said the company wants "to make it clear what people are being charged. Some of what's being charged we have very little control over, and it's important to tell people where it's coming from because it's not all from us." Hertz, Avis, Budget and Alamo were named as defendants in a class-action suit filed in Seattle last year. The consumer suit contends that the airport concession fee now listed as a surcharge should be automatically included in the advertised price of a car rental. "It's fundamental . . . that anything you have to pay should be included in the price," said th lead attorney for the plaintiffs.

By separating the airport fee, "you can make your price look 10 percent lower." But it's really part of the company's cost of doing business, they said. "A lot of (consumers) would think this is a tax imposed on them by the airport, and it absolutely is not that."

The plaintiffs lost in King County Superior Court, but appeal arguments will be heard before the state appeals court this week. The Washington State Attorney General's Office Consumer Division has filed an amicus brief stating their support for the consumer plaintiffs.

Besides the surcharges, taxes add another huge chunk. Because these include special taxes aimed at the travel industry, they add more than just standard sales taxes.

For car rentals anywhere in Seattle, taxes total a whopping 18.3 percent, but only 8.6 percent is sales tax. The rest is a 5.9 percent state car rental tax, a 1 percent local tax, a 0.8 percent tax levied by the transit authority, and the infamous 2 percent tax that funds the city's baseball stadium. And that's if you don't have any "extras." If you're letting the agency refuel, adding a second driver, or buying collision insurance, your total bill may be two-thirds higher than the base price.

Many consumers continue to sign up for the Collision Damage Waiver, even though it's not usually necessary if you have insurance on your own car or if you charge the rental to a credit card offering that coverage. These may not apply in Europe, however, so it's best to check with your insurance agent or credit card company in advance.

The lesson for consumers: Don't zone out on the long spiel by a rental agent, or skip over the fine print on a Web site. If the quote seems low or you're just not sure, ask or follow the links to be sure it includes all taxes, fees and surcharges. Remember, a good travel agent can help you with all of this. The cheapest price you see may not be the lowest price you pay.

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