Car rental customers set to drive off with better deals
Motorists will benefit from better car rental terms at home and abroad following a Europe-wide review of the sector.
The Competition and Markets Authority (CMA) has led a European-wide project, facilitated by the European Commission and involving member state consumer protection authorities, which has resulted in 5 leading EU car rental companies committing to improving the way they deal with their customers.
The companies – Avis Budget, Enterprise Rent-a-Car, Europcar, Sixt and Hertz, which in total represent around two thirds of the UK and EU markets – have agreed to introduce the following improvements over the next 6 months:
- Improved transparency when making a website booking or reservation: consumers will now have more of the key information they need to shop around for the best deal for them.
- Better information at the booking stage about optional waiver and insurance products.
- More upfront information about pre- and post-rental vehicle inspection processes.
- Improved notification of, and dispute processes for, any charges for damage.
Each company has committed to make these bespoke changes depending on the standard of their existing practices, with each committing to an overall better package of practices that includes one or more of the above.
Nisha Arora, CMA Senior Director, said:
We welcome the improvements made by the leading EU car rental companies to ensure that consumers are given clearer information upfront about their rental. These changes go a long way to ensuring that consumers know exactly what they are getting when they rent a car.
The CMA, together with the European Commission and our EU counterparts have worked constructively with the leading EU car rental companies to reach agreements on revised practices that will benefit motorists who rent vehicles in the UK and abroad. The improvements by these 5 businesses now set a benchmark for the rest of the industry to follow.
In the UK, 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, significant improvements similar to those adopted by the main car hire businesses have been adopted into the Code to which companies representing the vast majority of the UK car rental fleet are signatories. The revised Code will be launched at the beginning of 2016.
At a European level the CMA, European Commission and enforcement authorities in other EU member states have worked with Leaseurope, the umbrella body for the European car rental trade associations. Leaseurope has already adopted the general principles underlying the agreed improvements into its Code of Conduct, with further guidance due to be published in the next few months.
The CMA has produced a 60-second summary providing advice for consumers on what to look out for when renting a car.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the Competition Commission and the competition and certain consumer functions of the Office of Fair Trading, as amended by the Enterprise and Regulatory Reform Act 2013.
- The CMA worked with counterparts from other member states (in a forum known as the Consumer Protection Cooperation Network), and the network of European Consumer Centres. This work was facilitated by the European Commission.
- Each company has committed to make bespoke changes depending on the standard of their existing practices, with each committing to an overall better package of practices that includes one or more of the following: * Improved transparency when making a website booking or reservation: consumers will now have more of the key information they need to shop around for the best deal for them; including: * confidence that, as with other mandatory charges, Young Driver Surcharges will be included in the headline price at the start of the booking process; * clearer information at an early stage of the booking process about optional extras and their prices, alongside the ability to purchase or pre-book them online rather than at the pick-up desk; * clearer information about key rental terms and requirements, helping to avoid any surprises at the pick-up desk; * clearer upfront information about the need to pre-authorise a specified amount on the consumer’s credit or debit card at the pick-up desk, and the circumstances when this authorisation might be used (for example, additional charges to cover damage incurred during the rental); * Better information at the booking stage about optional waiver and insurance products, including their prices, exclusions and applicable excesses; * More upfront information about pre- and post-rental vehicle inspection processes, and how they can help to minimise potential disputes about damage; * Improved practices for taking additional charges from customers: ensuring that consumers are given a reasonable opportunity to challenge any damage and associated repair charges before any payment is taken from their credit or debit card; * A number of companies have also agreed to provide better information on their booking websites about local traffic rules and regulations in the rental country.
- The Consumer Protection Partnership (CPP) brings together UK consumer protection organisations to jointly identify and prioritise areas where there is the greatest harm caused to consumers and to agree and co-ordinate collective action to tackle such detriment. Car rental is a CPP priority for 2015 and the CPP will take account of the outcome of the CMA’s work before deciding whether follow-up CPP work is required.
- Leaseurope is an umbrella body for both the leasing and automotive rental industries in Europe, and is composed of 45 member trade associations (including the BVRLA) in 33 countries. Its Code of Best Practice is expected to be reflected in the Codes of Best Practice developed by its member trade associations at national level, to which many car rental companies are signatories.
- The BVRLA is the national trade association for vehicle leasing and rental businesses, with over 750 members.
- Within the UK, the total value of car hire sales was estimated to be around £1.2 billion in 2012. These sales were generated from 12.3 million transactions and a fleet of 189,000 vehicles. Leaseurope estimates that in 2014 its reporting members owned around 928,000 hire vehicles in Europe and made a total of 23.5 million individual rentals.
- For more information on the CMA, see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
- Enquiries should be directed to Simon Belgard ([email protected], 020 3738 6472).