A Collision Over Car Rental Fees

As the Labor Day weekend gets under way, a consumer organization is sounding the alarm about fees that can increase the cost of renting a car.

The California Public Interest Research Group released a survey Thursday showing that rental car companies in Los Angeles charge an average of $8.99 a day for a collision damage waiver, a fee consumers pay to protect themselves from liability for damage to the car. CalPIRG said payment of the fee increases car rental costs by an average of 42%.

Consumer organizations have long criticized the collision damage waivers, saying consumers often feel pressured to buy protection they may already have. Many personal auto insurance policies cover damage to rental cars. In addition, American Express and “gold” versions of many MasterCard and Visa credit cards provide insurance for rental cars.

CalPIRG said its survey consisted of 229 phone calls to eight rental car companies in 29 cities, including Los Angeles. When asked about liability for damage, agents quoted the waiver fee. Only half the agents advised callers that they may already be covered by their own insurance or credit cards.

“This means that half of all consumers will continue to arrive at the rental counter without having had an opportunity to determine if they need the coverage at all,” CalPIRG said.

Jan Armstrong, executive director of the American Car Rental Assn., said rental car companies aren’t hiding anything.

“Telephone sales agents can’t sit there and discuss individual insurance needs,” she said. “These reservation lines aren’t set up to handle 20-minute conversations.”

Separately, a spokesman for Alamo Rent A Car said the company takes “extreme issue” with the public interest group’s statements that the waiver “is a ‘hidden add-on’ sold in a ‘deceptive’ manner and is ‘worthless.’ ” The collision damage waiver “is a viable option for millions of renters industrywide each year, particularly for the nearly 40% of travelers who are uninsured or underinsured,” Alamo Vice President Roger J. Bingham said.

Budget Rent A Car said it is very open with customers about the waiver and that its reservation agents do not discuss the waiver over the phone because it is optional. The company said counter workers outline all available options at the time of rental.

CalPIRG says collision damage waivers have been banned in Illinois and New York for about five years.

New car defects: Here’s another survey for new car buyers to consider. The Florida attorney general’s office has ranked cars according to the number of consumer complaints about auto “lemons” from January, 1992, to March, 1994.

The results show General Motors’ Oldsmobile cars generally had the fewest chronic defects. The model with the fewest defects overall was the Lexus SC 300/400, made by Toyota. The lowest-ranking car was Porsche (see chart).

The survey covers more than 8,500 consumer reports of chronic defects involving 36 vehicle makes, 215 models and 20 manufacturers. The figures were adjusted for sales within Florida to develop the rankings. Florida regulators said there was no overall difference in the quality of cars produced by U.S. and Japanese manufacturers.

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What flavor is your phone bill?: We suspect someone in GTE’s legal department is spending too much time in the kitchen. In public documents filed with the state Public Utilities Commission, GTE likens the process of setting telephone rates to baking.

The company says the proposed tinkering with rates is the culinary equivalent of substituting peanut butter or white chocolate for bittersweet chocolate in a cake recipe. A final decision on proposed telephone rates--which include a big jump in local calling charges for GTE customers--is expected Sept. 15.

Auto Defect Complaints

Florida regulators have ranked 36 auto makes according to complaints received from consumers about chronic defects. The complaints are adjusted for vehicle sales to determine a defect rate. A partial list, ranked from best to worst:

Rank Make 1 Oldsmobile 2 Buick 3 Toyota 4 Lexus 5 Cadillac 32 BMW 33 Mercedes-Benz 34 Volkswagen 35 Jaguar 36 Porsche

Source: Florida attorney general’s office