Watch those car rental fees, please

By Paul Wenske
Copyright 2001 Kansas City Star Co.
Article date: November 25, 2001
 

When you reserve a rental car at or near the airport, do you scrutinize the fees and taxes that get tacked on to the rental price?

You should. Fees and taxes, which aren't always fully explained to you, can add 20 percent to 50 percent to the price.

Fees vary from airport to airport and from rental car company to rental car company. So they are important to consider when comparing rates. A cheap deal can end up costly after the extra charges are added. Most of the fees and taxes paid by the rental car agencies are passed on to the consumer. And the charges seem open to interpretation.

At Kansas City International Airport - and I'm sure at other airports - there even exists a bit of legal price gouging because of antiquated agreements between the airport and the rental agencies.

Fees and taxes might be called different things by different agencies, but they are essentially the following:

Customer facility charge: This fee, usually used to pay for capital projects, is charged by the airport and passed on to consumers. Kansas City charges $3 a day to finance a planned multimillion-dollar garage for the car rental agencies.

Vehicle license registration fee: Rental agencies charge this fee to customers to recover taxes they pay on their fleets' auto license tags. Though the fee relates to a tax, it varies widely.

Consider the recent licensing fees charged by three agencies: Thrifty charged 94 cents per day. National charged $1.88 per day. An Alamo car rented through Priceline.com charged $2.24 per day.

Why the wide difference? A spokesman for Priceline.com simply explained: "Depending on the fleet, the agencies can - and do - have different surcharges. There's no fixed amount for everyone." OK then.

Sales tax: This charge is figured as a percentage of your bill. At KCI, the sales tax on airport car rentals is 6.85 percent. But the tax isn't limited to just the daily rental rate.

Many car agencies factor in other fees and some taxes - such as the facility charge, an agency's car registration fees and concession fees - and assess the sales tax on the total sum.

That kind of math squeezes an extra dollar or more out of the customer.

Concession recovery fee: Car rental agencies pay this fee to do business at the airport. The fee, of course, is passed on to the customer. But agencies actually charge you a fee on the fee - legally.

Here's how: A rental agency at KCI pays a concession fee of 9 percent of its gross revenue. An off-site agency pays 7 percent. Sounds straightforward. But here it starts getting quirky.

After charging you a percentage of your rental bill to recoup the fees they pay the airport, many rental agencies turn around and also charge a percentage of the percentage - and add that to the bill.

That means at an airport agency, instead of 9 percent, you may pay 9.81 percent. That's 9 percent, plus 9 percent of the 9 percent. At an off-site agency you may pay 7.46 percent.

"It is a confusing thing, and I know it's a question for customers," said Tim Connor, operations manager for Thrifty, an off-site agency.

The practice relates to a 15-year-old agreement between the airport and the rental agencies that includes airport concession fees as part of an agency's gross revenues.

But who gets the extra money? Apparently the airport does.

KCI airport officials, however, say the appearance of double billing was never anyone's intention.

"We're trying to get it changed," said Neil Maxfield, senior property specialist for KCI. "We're negotiating a new agreement with the agencies that will not include concession fees in gross revenues."

All these charges can add a lot to your bill. Consider a recent car rental agreement obtained through Priceline.com.

The three-day rental price of $30 is cheap. But the taxes, fees and surcharges add $22.03. Toss in the $5.95 processing fee, and the total bill is $57.98.

I guess it's still a bargain. But then, I was never a whiz at math.

To reach Paul Wenske, consumer affairs reporter, call (816) 234-4454 or send e-mail to pwenske@kcstar.com.

Paul Wenske is part of the StarWatch Consumer News Team
 

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