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Travellers urged to dodge expensive automotive rent extra insurance policies

  • Driving overseas can be tricky enough without adding insurance into the mix
  • Buying excess cover from a car hire firm can be extremely expensive
  • Which? is advising drivers to look elsewhere for the best deals 

Motorists driving abroad this summer are being urged to dodge insurance excess waivers sold by car hire firms at the desk, which can cost 12 times more than buying standalone cover.

Car hire insurance normally has an excess – the fee paid by the driver if there is any damage to the vehicle.

Customers are usually obliged to pre-authorise the excess amount on a credit card for the hire period, which is taken by the rental company if the vehicle is damaged. 

Car hire excess insurance covers the cost of this excess, which in Europe normally costs from €500 to €2,000 (£441 to £1,764), or more, according to consumer champion Which?.

Drivers beware: Buying excess cover from a car hire firm is convenient, but costly

Drivers beware: Buying excess cover from a car hire firm is convenient, but costly

This insurance is almost always offered by car hire companies when the vehicle is rented – but buying cover this way can be prohibitively expensive.

Which? said drivers can be charged up to £199 for a policy that is less useful than one that costs just £16. 

There are two forms of insurance covering car hire excess: super collision damage waiver (SCDW), sold by care hire firms; and excess reimbursement insurance (ERI), sold by insurers and car hire brokers.

Which? compared cover sold by six major car hire firms in Malaga, Spain, and compared it to the ERI deals sold elsewhere.

Drivers booking a car for a week were charged £177 on average for cover bought from a car hire firm, but just £38 from a broker and £23 from an insurer.

Which? also said the SCDW policies were inferior, with many not covering common issues such as stolen keys or putting the wrong fuel in a vehicle. 

Drivers should therefore make sure to read the small print and shop around – and not be pressured into automatically taking out the car hire excess cover sold by car hire firms. 

Car hire costs are falling

The cost of hiring a car has fallen – by more than 40 per cent in a year. 

School-holiday getaway costs went through the roof in the last two years, with the rental price for a compact family car in favourite summer destinations costing an average of £652 for just one week in 2022.

However, prices across the same 12 locations have readjusted to £380 per week for this summer, which is only £70 higher than in 2019, according to data shared by iCarhireinsurance.com.