Renting a car in a foreign country? The rental car company will likely offer you the choice of being charged in local currency or U.S. dollars. Buyer beware: One of these options is a big currency conversion rip-off. Here’s how to make the money-smart choice every time.
Why Dynamic Currency Conversion is Such a Rip-Off
So why is this such a big currency conversion rip-off? Dynamic Currency Conversion masquerades as a convenient service that offers a choice. You can either pay in the local currency or in your home currency. Choose to pay in U.S. dollars, and the rental company converts the amount on your behalf. This process entirely unnecessary, since your credit card will process the transaction in either currency. In addition, you will pay through the nose for the non-convenience.
Also, while a rental car company can only provide an estimate in your home currency. The rate is always guaranteed only in the local currency. That’s because foreign exchange rates will change slightly between the time of reservation and the time of pickup. The rental car company always confirms a reservation in local currency and a renter should always pay in local currency. There’s no reason to give the rental car company a “convenience fee” of 3 percent on top of a consumer-unfriendly exchange rate determined at the sole discretion of the rental car company.
Choose Your Credit Card Wisely When Renting a Car
In general, when using a credit card with no foreign transaction fees, there is no reason to pay a rental car company (or hotel, or shop, or restaurant) to bill you in anything other than the local currency. When you let the business process a conversion from a local currency to your home currency, it effectively guarantees an unfavorable exchange rate along with some percentage fee for the so-called convenience.
As a renter, you have hopefully made a conscious effort to sign up for credit cards that provide car rental insurance with no foreign transaction fees. We are big fans of products like the Chase Sapphire cards, which provide primary damage waivers on rental cars so that personal auto insurance coverage never comes into play.
Sneaky Ways Rental Companies Rip You Off
Rental car companies use two different tactics to nudge renters towards accepting dynamic currency conversion. If you’re a member of the company’s loyalty program—and everyone should be— you may have been asked about dynamic currency conversion during the enrollment process. Alternatively, you may be offered this option for each individual rental contract when you are traveling outside the country.
Opt Out of Dynamic Currency Conversion in the Loyalty Program
A few companies, including Avis, make dynamic currency conversion an option as part of the loyalty program enrollment process. This option comes up when you are adding or modifying a credit card.
Track Your Car Rental for Price Drops
Be aware that companies can enroll users in dynamic currency conversion by default. Members of the Avis Preferred program will receive a notice that the user will be enroll in DCC unless he or she opts out. In other words, Avis explicitly enrolls Preferred members into this unnecessary and costly service unless he or she unchecks the selection.
Opt Out of Dynamic Currency Conversion on the Rental Car Agreement
Other rental car companies offer the currency conversion option on each individual contract. Renters are given the choice of being billed in local currency or allowing the rental car company to bill in your home currency. If you opt for the latter, you are letting the rental car company determine the exchange rate and charge a fee for the so-called service.
For example, Hertz calls this service “Choose Your Currency.” Again, renters would be better served simply by instructing Hertz to process all charges in the local currency.
If you belong to a rental car loyalty program, go online and take a few minutes to update your credit card information on your account and opt to pay in local currency. The next time you rent a car internationally, be sure to check the contract carefully and, again, opt to pay in local currency. This seemingly small tactic can lead to big savings.
Frequently Asked Questions
Do rental cars in Europe have automatic transmissions?
Yes. Rental agencies do not rent vehicles without an automatic transmission because they are very expensive to repair if you damage them while driving them around. It would be too expensive to replace all the parts every time you damage the bodywork.
Renting a car abroad requires that you have an automatic transmission.
How can I rent an automobile in another country?
The best way to do this would be by using an international rental agency such as Hertz, Avis, or Europcar. These companies offer both short-term rentals or long-term leases. They have offices across Europe.
They offer customer service seven days a week, 24 hours a year.
If renting from them, you don’t need any previous experience. They handle everything, from insurance to breakdown cover. All you have to do is know where to find them and when they will be there.
Is it possible to rent a car in Portugal, and then drop it off in Spain.
It is possible. It’s called “car-hire”. Many companies offer this service online.
Simply check with Spanish and Portuguese authorities to see if they license them.
The best way to do this is to contact them directly on their websites. They should have all of the information that you require.
Can I rent a car in Germany and return it to Switzerland?
The answer to this question depends on many factors, including what type of vehicle you are renting, how long you plan to spend driving, and whether you have any special requirements for your rental car, such as child seats, etc.
For example, if you are planning to drive from Munich to Zurich, then there is no need to book a car because you can use public transport instead. A rental car may be an option for those who want to drive between Munich and Barcelona on holiday.
Statistics
- American Airlines, for example, offers AAdvantage members 35% off Budget and Avis — but you need to rent from an airport. (nerdwallet.com)
- In 2019, the most crucial factor is the cost and fees of the rental (accounting for 28% of overall satisfaction with the rental experience), followed by the rental car itself at 25% and the pick-up process at 23%. (cnet.com)
- You can rent an automatic but these cars can cost as much as 50% more than a manual vehicle. (earthtrekkers.com)
- Save up to 30% on your rental car in Europe when you book with us today. (autoeurope.com)
- Automatics are more expensive (usually about 50 percent more) and may only be available if you upgrade to a bigger, pricier car. (ricksteves.com)
External Links
enterprise.com
alamo.com
autoslash.com
kayak.com
How To
12 Things to Know About Renting a Car In Europe
What information should I have when renting a vehicle in Europe?
You need to be familiar with the basics of renting a car in Europe before you start driving. The type of rental car you choose will play a significant role in your trip. These are some must-know tips that will ensure your trip is smooth.
- Your insurance policy. Make sure your insurance policy covers international travel before you get on the road. Our guide will help you find affordable car insurance abroad.
- You need the right documents. You’ll need a driver’s license from your own country, plus several identification cards (passport, visa, etc.) to prove where you’re going. It is best to have all the documents you need in order to meet any deadlines.
- Road Rules. Be aware of signs indicating speed limits and one-way streets as well as pedestrian crossings. Driving in another country could result in fines and accidents, so always obey the law!
- Parking rules. Parking regulations vary from one city to the next. Before arriving in town make sure you read the parking regulations.
- Gasoline. Gasoline. While gas prices may vary by country and location, the average price of gasoline is three times that back home.
- Insurance requirements. Rentals older than 3 years may require additional liability insurance. Talk to your rental company for details.
- GPS navigation systems. These GPS navigation systems are growing in popularity among travelers. If you are unsure how to use them, bring along a map.
- Radio stations. The radio station you are visiting may play music that is unfamiliar to you. Press “0” to change frequency to English.
- Seatbelts. European countries have a mandatory requirement for seat belts.
- Road tolls. Road tolls are common throughout Europe. Most can be paid at meters at major intersections.
- Speeding tickets. Speeding is prohibited in large areas of Europe, such as Germany, Austria and Switzerland, Italy, France and Spain.
- Tipping. Tipping is not the same thing in Europe as in North America. Tipping is not customary in all parts of the world. Instead, you can give a round number like 10%-15%.
