Skip to content

Additional Fees to Look Out For When Renting a Car

Having a car to use is the ultimate expression of freedom. Being able to go anywhere, at any time is a kind of independence afforded to the more mobile. Renting a car is a good way to experience this at a low cost, especially if you are overseas on a holiday or on a long-term job posting. However, it can also turn out to be an unpleasant experience if you do not understand the fine print of the contract on a comprehensive level. Do not forget to do a quick scan of the details as the fine print may result in a rude shock involving hefty fees that could have been avoided. To shed light on these hidden costs, here is a list of some of the common fees.

Rental Car Insurance
Insurance charges1 can be a huge bugbear as well as a source of confusion at the same time. Most of these arise from not fully understanding what is covered and what is not. All cars must have motor insurance coverage to be used in Singapore. The basic minimum insurance required is a third-party cover. This covers your liability to other people involved in a collision but not car damage.

The car rental company will already have purchased the rental car insurance before providing the car for rental. This insurance coverage comes with an Excess that is payable by the Hirer when the rental vehicle is involved in a collision. The excess amount is determined by the rental company and the Excess amount varies depending on several factors such as location of the accident (Singapore or Malaysia), age and the type of rental car. If your rental car is damaged during the rental period, you are liable to pay the excess amount to cover the cost of damage and repairs.

Other additional insurance options you could be offered when renting a car are: (1) collision damage waiver, and (2) personal accident insurance.

Collision damage waiver (CDW) is an additional insurance coverage that a rental company offers you when you rent a car. This waiver is optional, and the cost of the waiver depends on the type or engine capacity of the rental car and where the car is being driven. This waiver limits your financial obligation if the rental car is damaged in a collision. Should you decide to include the collision damage waiver in your rental package, an additional daily fee on top of the rental car fee applies.

The Personal Accident Insurance provides coverage for medical costs, emergency care and accidental death during the rental period. However, it may cover either the driver or both the driver and passengers.


Additional Driver Fee

An additional driver can be any person registered and permitted to drive the rental car during the rental period in addition to the renter. To register an additional driver, many rental companies charge an additional driver fee.

The additional drivers must meet the same requirements as those of the renter which includes the driving license and age eligibility criteria to drive the rental car. The additional drivers’ names must also be added to the rental agreement.

The most important thing to note is that all additional drivers must be approved by the rental company. There will be no insurance coverage for any additional driver(s) not approved by the rental company.


Security Deposit

Majority of the rental car companies charge a refundable security deposit. The deposit is a determined sum of money requested by the rental company just to ensure the renter takes good care of their car. If the car is returned very dirty or with scratches, the company may use the money to repair the car. It is simply a guarantee to the company just in case something goes wrong during the car rental period. After the rental contract expires and the car is returned, this sum of money will then be fully refunded.


Costly Extras

Need a child seat or GPS device? Be prepared to factor these into the daily car rental rate3. The price of this convenience could well cost as much as buying them to begin with. Therefore it is recommended that you plan ahead and calculate your sums and make a comparison to a direct purchase of these extras to see which option makes more economic sense.


Peak Timings

Peak periods such as weekends and public holidays drive rental rates higher. Planning early to book in advance or to avoid the peak periods can help to save money significantly. However, do not write off peak timings entirely. Do keep a look out as car rental promotions are advertised for festive periods from time to time.


Damage Charges

That paint chip when you hit the door while opening it, the scratch on the windscreen caused by a pebble that was kicked up by the truck in front or even a deep gash on the paintwork can rack up the final bill, even if it was someone else’s fault.

Sometimes, renters might dispute these charges which then makes it important to have documented the condition of a vehicle’s interior and exterior upon acceptance of the car. This would help to provide proof in the event of any disagreement. So do remember to take photos for reference before taking over the car and at the end of the rental.


Convenience Charges

To top it all off, there is a catch-all category of service charges and convenience charges that could apply. These include sending the rental vehicle to a specified pick-up location or if the rental car is returned at a place that is different from where it was collected. Of course, there are always some exceptions that some rental companies do go above and beyond for enhanced customer satisfaction. They may offer complimentary collection and delivery of the rental car or delivery of replacement vehicle when the rented car requires servicing or when an accident occurs.

Most rental contracts require the renter to fill up the fuel tank at the end of the rental period. This is usually full or to the same level when the car is collected at the beginning of the rental period. It is also clearly stated in the contract that the renter is fully responsible for all fines incurred during the length of the rental contract. If these terms are not abided by, the cost of fuel top up or fine will be charged to the renter with a service fee.

When COE premium hits sky-rocket high, renting a car in Singapore has become much more affordable than owning a car. The allure of a low daily base rental price is often enough to convince a potential customer to go ahead with car rental. To be fair, it can often be a great option that does not break the bank. Comparing rental or leasing to traditional car ownership further highlights its benefits. There is no need for a hefty down-payment, no loan or upfront payments of one’s hard-earned cash. This gives a renter greater financial flexibility for other much needed priorities.

What differentiates an excellent car rental company from the masses is in its level of customer service. A customer centric company quickly rises above the rest and it would be no surprise that satisfied customers make choices that benefit them the most. A prudent, savvy customer should not only know about the additional fees involved but also which is the right company to rent from. Being a market leader with over 40 years of dedicated car leasing experience since 1981, its experienced teams are well equipped to advise clients on solutions customised to suit their needs. ETHOZ is a one-stop service centre for both corporate clients and individual clients. With one of the widest range of available car makes and models under one roof, ETHOZ is definitely the multiservice, and trustworthy choice for anyone who wants to lease or rent a car in Singapore.

More News