How to rent a car without putting a dent in your wallet

A British MEP says new laws are needed to curb cowboy car-hire firms. James Daley explains how to protect yourself

Car hire firms could face a crackdown on unclear charges and confusing contracts, under plans put to the European Commission by the MEP Robert Evans.

The Labour member is furious about the practices at some leading car hire firms. "My view is that this is an area where legislation to protect the consumer is urgently needed," he says. "These firms must act responsibly and honestly in making rental agreements clear and concise and not forcing customers to sign parts of the contract about which they are unclear."

According to Which?, the consumer group, one in six people has a bad experience when they rent a car, with complaints about issues such as unexpected charges and disputes over who is liable for damage.

Lorna Cowan, the editor of Holiday Which? magazine, says that the onus is on drivers rather than the rental firms. "Check absolutely everything before you set off from the car hire shop - tyres, brakes, petrol level - and report any faults immediately," she says. "If you don't uncover existing problems until you've driven off, you're likely to end up being charged for them even if they are not your fault."

Cowan says it is a good idea to book online in advance in order to give yourself time to read the terms and conditions.

Chris Nixon, a manager for travelsupermarket.com, the price comparison website, also thinks this is important. "The root of many problems with car hire is that it's the last thing people do when they organise a holiday," he says. "If you wait till you get there, you'll have a contract thrust at you and you'll just end up signing it without understanding the terms."

Certain clauses need a careful look. For example, all car hire companies offer collision damage waiver (CDW) insurance, but even if you pay extra for this, don't assume you are covered for the full cost of damage. You could still be required to pay up to the first £200 of the cost, though without the cover, some companies will hold you liable for anything up to £2,000. It may even be worth taking out your own policy. Insurance4carhire. co.uk charges about £50 a year for a policy that will pick up the bill for anything that the rental agency doesn't.

While scrutinising the contract, look closely for any additional charges. Many companies quote a basic rate, but add extras when you arrive. Robert Evans says his interest in the car hire sector began when he was charged an extra £20 for winter tyres when he was hiring a car at Geneva airport.

Companies almost always charge extra for having more than one driver on the policy; the hire of a child seat or roof-rack; and leaving the car at a different location from pick-up. Also watch for mileage limits.

Another issue is the agency's policy towards fuel. Most firms deliver the car with a full tank and ask for it to be returned full. If you forget, they will charge you up to twice the normal fuel price to do it for you. However, some companies start you with a full tank (for which you have to pay a premium), and ask you to return the car empty.

Finally, according to the industry's trade association, the British Vehicle Rental & Leasing Association (BVRLA), the most common complaints are about disputes over damage. It's not only important to check the car when you pick it up, but also to have the car properly inspected when you hand it back.

Many British holidaymakers have returned their cars in perfect condition, only to find charges on their credit card when they are back home for damage the company says it found later. Demand to have the return inspection done immediately. If that's not possible, take photos as evidence that you returned the car in good order.

Robin Mackonochie of the BVRLA says that, while the industry has some issues to deal with, he does not believe more regulation is the solution. "Some of the European chiefs of major rental companies are taking notice - and that's something we welcome," he says.

"Generally, there is not such a problem in the UK. We operate a conciliation process for consumers in the UK, and last year we received only 175 complaints out of almost 10 million rentals," Mackonochie says.