Hidden Costs - How to avoid hidden fees when renting a car

Talk about sticker shock. When you go to pay the bill for your rental car, you could be in for quite a surprise, once you get to see all the fees and taxes that get added on to the advertised base price. And we're not talking nickels and dimes here. I rented a car in Boston and the actual cost for a one day rental came out to be more than double the base rate," When renting any car, be aware of hidden fees. It is not uncommon for surcharges to tack on as much as 30%. Here are some common hidden costs:

Insurance
One of the most common extra charges is for insurance, usually referred to by rental companies as collision damage or Loss Damage Waiver (LDW). For an extra $6 - $15 a day, you can avoid liability for any damage, provided you're not found guilty of gross negligence. Insurance is optional in most states, although in a few states it is compulsory and built into the basic car rental cost.

Before you purchase the extra insurance, check to see if your regular car insurance covers you in a rental car. Most policies do. Some credit cards also provide insurance. Check with your company to find out. Other optional coverage includes: Personal Accident Insurance (PAI), Personal Effects Coverage (PEC) and Additional Liability Insurance (ALI), which you can purchase from the rental company.

Gasoline Charges
In most cases, you will pay a high premium for returning a car with an empty tank. Be sure to fill up before you return it.

Drop-Off Charges
An extra fee is usually charged if a car is returned to a different location than where it was picked up. This fee varies by location so there usually is no general policy in place. In some instances there is no charge, other times the fee can be as high as $1000. However, some companies do not require a charge when dropping off in-state at many Florida and California locations.

The 24-Hour Clock
Be aware of the "24-hour clock rate." If you rent your car on Wednesday and return it on Thursday, most companies charge you one day only if you return it within 24 hours. You are usually charged for two days if you return it more than 27-28 hours after picking the car up.

Mileage
Most major rental car companies allow for unlimited mileage in the same state, but it's a good idea to check their policy before you reserve a car. Many smaller, local companies charge mileage, usually about 20 to 25 cents a mile, after 100-200 free miles per day. Another caveat: Some "special" rates may not include unlimited mileage; be sure to read the fine print.

Taxes & Airport Surcharges
Sales tax and airport charges vary considerably between states. It is important to realize they are additional expenses that will increase your bill. "Off airport" rental locations usually have lower surcharges.

License Fees
Some states allow car rental companies to charge extra to recover the costs of licensing their cars, usually about 6% of the cost of the rental. Most states do not require that renters are told about this fee in advance, so make sure to ask.

Varying Rates
Rental car companies' rates vary a great deal from city to city, and sometimes even within the same city. Make sure to shop around.

Extras
There may also be additional charges for things you had not considered, like infant and child seat rentals, young drivers, and additional drivers. These could run you anywhere from $5 to $25 per day, depending on where you rent. CD players, roof racks, and other extras will also cost you.

Overseas
Most of these hidden costs apply to overseas rentals, as well. Some fees are avoidable, others are not. A value-added tax (VAT) is added to European car rentals, which can be as much as 25% of the rental cost. Most brochure and advertised rates do not include this tax. In some countries, this is partially refundable.

Most travelers rely on credit cards to cover collision insurance overseas, as costs are significantly higher (up to $54 a day). But due to the high risks, some credit card companies now refuse to provide this coverage. American Express, for example, no longer offers collision coverage in Australia, New Zealand, Jamaica, Ireland, Israel or Italy.

In addition, theft insurance is mandatory is some European countries, such as Italy and Slovenia. This will cost another $10 to $20.

You should also think about airport fees, which range from a few dollars to 10% to 14% of your rental cost in Austria, Belgium, Italy, Luxembourg, Switzerland and the UK. There are also highway charges for cars driven in Austria or Switzerland. You'll need to purchase a sticker to avoid paying a fine.