<B>Surcharges Raise Car Tab</B>
By Lynn Woods
Travel buyers who successfully renegotiated car rental contracts without rate increases have seen their car rental bills climb in the past quarter. The culprit is the ever-increasing array of car rental surcharges.
The travel department at one large corporation has been tracking the amount it spends on car rental surcharges from its two preferred vendors at various airports, and the results are shocking. Out of four airports tracked for one-day rentals made by travelers over two days in October from the two suppliers, the extra fees in two cases amounted to 30 percent or more of the total cost of the rental.
At San Francisco International, the extra fees that car rental company "X" charged for a $36 intermediate car totaled $10.81, or 30 percent of the total cost of $46.81. At car rental company "Z," which charged a rate of $39, the extras amounted to 28.8 percent of the total cost. The killer fee at SFO is the $6.10 per rental "transportation fee," an airport-levied charge that pays for the shuttle bus that takes renters to the new remote consolidated facility, a service that previously was free. In addition, the corporation had to pay an 8.25 percent state sales tax and a "vehicle license fee," which varied from $1.24 at company X to "up to $1.93 per day" at company Z.
According to an Avis spokesman, the vehicle license fee is levied only in California and Texas, where "state statues imposed the fee to enable the car rental companies to recover the personal property taxes paid on the vehicle as well as the title and registration fees," he said. Hertz spokeswoman Paula Siffert added the vehicle license fee represents "a recovery of a proportional amount" of the fee the car rental company must pay to license the vehicle, although she didn't say it was limited to the two western states.
She noted that the fee isn't consistently applied from location to location, in part because some states don't allow the car rental companies to pass it on to customers. Furthermore, the fee may vary in amount because some state regulators require a flat charge, others allow a sliding scale depending on the car type.
That doesn't quite explain why car rental companies charge different vehicle license fees for the same type of car in the same state. In a separate research project, the corporation tracked the vehicle license fees levied by car rental companies X and Z in California on rentals by travelers over many months. The result: inexplicable inconsistencies.
For example, one traveler was charged a different amount--$1.03 and $1.08--for the same type of car from the same company over a period of time. Another traveler paid $1.38 and $1.03 per day for the same type of car. A third traveler paid the same vehicle license fee--$1.03--for two different models priced at different amounts.
When the corporation called the car rental companies for an explanation, the customer service representative at company X could not explain how the fee was calculated. At company Z, the agent explained that the car rental company pays about $300 per year, depending on the price of the car, to the state of California for the plate on each car. Z divides the fee per year by 365 days to come up with the daily fee.
The corporation spent an even higher proportionate amount of its car rental budget on extra fees at Dallas/Fort Worth International, where the bill for the $38 rental car from company Z was boosted nearly 40 percent by surcharges. In contrast, extras at company X accounted for 28 percent of the total bill. The main difference: Company Z levied a 10 percent concession recovery fee, while company X did not.
So much for the assertion by one car rental industry representative that the car rental companies are forced by airport authorities to charge onerous concession fees. Judging by this example, it's up to the car rental company whether it passes on the fee it must pay the airport to occupy space at the facility, a charge the industry started passing on to renters in 1997.
It began in Florida, where the attorney general's office ruled that the new surcharge was legal. First introduced by Avis in Miami and legally challenged by Hertz, which saw the fee as a way for Avis to unfairly lower its rate, putting Hertz at a competitive disadvantage, the concession fee soon became popular with the major car rental firms and spread to other states.
Initially, the car rental companies were exempting corporate travelers from the concession fee. But now some firms obviously are adding it onto the bill.
There are plenty of other charges at Dallas/Fort Worth that both companies are passing onto the corporation's travelers. One is a relatively new type of fee, called the Customer Facility Charge, which is levied to help pay for new consolidated car rental facilities, such as the one opened at Dallas earlier this year. The charge amounts to $3 per day, although there is no extra charge for the airport bus, as there is at San Francisco.
In addition, there's a $1.22 a day "property tax license/title fee. There's also a 5 percent, "Euless Motor Vehicle Rent Tax," which is helping to finance a new sports arena.
Finally, company Z also charged the corporation a $1 per day "reimbursement charge" at Dallas/Fort Worth. The Avis spokesman described the tax as for "some imposed costs," although he couldn't be more specific.
Terry Henderson, spokesman at the American Car Rental Association, an industry organization based in Indianapolis, said the charges were justified by the fact that car rental prices are still relatively low. "The average car rental rate is $41 or less," he said. "As we get hit with new taxes, the money has to come from consumers.