Take precautions to avoid being charged for damage that occurred before or after you drove

SUV Sitting on Top of Pile of Cash / Avoid Unfair Charges for Damage to Rental Cars, Especially When Ride Sharing
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August 31, 2016

The possibility of being unfairly charged for damage that took place either before or after you rented a car has existed since rental companies first came into being. Now the risk has been exacerbated thanks to the rise of car-sharing services.

"Rental companies hold drivers liable for anything that happens to the vehicle during the rental period, even if the incident that caused the damage was out of the driver's control,"says Consumer Reports. "Such rental car damage charges can occur when there isn't a rental company employee available to examine the vehicle when you pick it up and again when you return it. If the company isn't aware of prior damage or if something happens to the car after you drop it off, the company will assume the incident occurred on your watch, and you could be on the hook for some serious money."

This is a particularly big problem with car-sharing services. These services allow members to drive off with a vehicle parked on the street or in a parking garage and then drop it off again when no longer needed. The vehicles are not inspected or looked over between rentals, however, which forces the car-sharing companies to rely on the next driver who rents the vehicle to report damage before driving it.

If a rental was damaged before a driver picks it up and the driver does not report the damage prior to using the car, the damage will be attributed to the driver if the next renter reports it. The same is true when a driver drops off an undamaged vehicle that is somehow damaged between the time when it was dropped off and the time when it was next rented.

Such incidents were among the New York Attorney General's reasons for filing a complaint against Zipcar, which has just been settled. The state alleged that Zipcar had charged customers without giving them a chance to dispute the damage claims against them.

"In one instance, Zipcar charged a customer $750 for scratches on a car before it even notified the customer of the damage," says the North Carolina Attorney General's statement. "When the customer complained that the damage had not occurred at the time of his reservation, Zipcar reviewed the file but refused to refund the money it had charged."

Even though the company automatically gives collision insurance to renters, it can still charge them for damage to the vehicle. According to the attorney general, it did just that to 5,000 New Yorkers from 2011 through 2015.

The settlement requires Zipcar to refund charges for rental car damages to drivers who rented a car in New York but then contested their responsibility for any damages to it. In addition, it can no longer charge a customer for damage unless either the customer agrees that he or she is liable for the damage or the company obtains a legal determination that he or she is. And the company also has to pay $35,000 in fees and costs to the State of New York.

Nor is Zipcar the only car-sharing service that requires drivers to inspect their rental and report any damage before driving: Enterprise CarShare renters must do so as well.

And traditional renters can also be unfairly charged for damage to their vehicles. If a driver drops off a vehicle after the office closes and it is damaged before being examined by an employee, the driver is responsible for damages. The driver is also liable if a company employee doesn't correctly record any pre-existing damage when the driver picks the vehicle up, which is a particular issue for airport rentals.

So how can consumers avoid being charged unfairly for damages to a rented vehicle?

  • Reconsider using a ride-sharing service. The risk may not be worth the convenience.
  • Inspect the car carefully before using it and report all damage, as well as a dirty interior and any other issues, to the rental company right away. If possible, have an employee inspect the vehicle alongside you and make notes about any damages then, and have an employee inspect it again when you return it. Insist that you receive written confirmation of no problems. Avoid returning vehicles when company offices are closed whenever possible.
  • Take photos and even video of the vehicle both inside and out before and after driving it. Make sure to capture the date and time if the vehicle's electronic system displays them.
  • Check your insurance and/or credit card coverage to see if you have collision coverage.
  • Consider paying extra for the company's collision damage waiver as a last resort, and be sure to read the fine print before signing.
References: Consumer Reports