The CMA has told car hire websites it expects them to make changes so motorists are shown the true cost of hiring a car before they rent.
The initiative from the Competition and Markets Authority (CMA) builds on the work it undertook last year in securing changes from 5 leading car hire firms to improve the way they deal with their customers. Around half of all leisure rentals begin with comparison websites, and this action by the CMA will ensure consumers get transparent prices whether they book directly with a leading car hire firm or through a comparison website.
Car hire comparison websites (sometimes referred to as brokers or meta-search websites) have been sent letters by the CMA which explain consumer protection law and ask for consumers to be provided with easy-to-access information in 7 key areas:
- young driver surcharges
- one-way fees
- fuel charges
- excesses and the cost of reducing them
- pre-authorisations or deposits
- collision damage waiver exclusions
- warnings about the need for snow chains (a legal requirement in some countries in winter)
The businesses have until January 2017 to make the changes and write to the CMA to explain what actions they have taken. Some businesses have already made changes or have a good standard of clarity, and the CMA expects the whole market to move to this standard. Once the deadline has passed, the CMA will begin a compliance review. Any companies not complying with the law risk enforcement action.
James Macbeth, CMA Project Director, said:
The changes made by car hire companies earlier this year are already having a positive impact for holidaymakers hiring a car in the UK and abroad. However, we know that a significant amount of business is done through comparison websites and we are confident that by working with them we can ensure an even better service for motorists.
Drivers will see a transparent ‘drive-away’ price – including every mandatory charge and any options they choose – before they buy. This will take away the surprise some feel when they only discover the real cost of their car hire at the rental desk.
People will also get information about factors such as insurance exclusions, credit card pre-authorisations and fuel before they buy. This will make it easier to shop around, compare different providers and get the best deal. We welcome the willingness to improve practices we have already seen from the industry and expect that to continue.
- improved transparency when making a website booking or reservation: consumers will now have more of the key information they need to shop around for the best deal for them
- better information at the booking stage about optional waiver and insurance products
- more upfront information about pre- and post-rental vehicle inspection processes
- improved notification of, and dispute processes for, any charges for damage
The CMA will review the rental providers’ compliance with these changes at the end of the summer, including examining complaints from consumers.
Citizens Advice has produced useful information on how consumers should deal with problems they may face when hiring a car.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information, see the CMA’s homepage on GOV.UK. For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
- The CMA has written to approximately 25 businesses that operate price comparison services for car hire. Some of these businesses have more than one website or brand.
- Car hire comparison websites include meta-search websites that allow consumers to search car hire providers and broker websites which allow consumers to search and make a booking. The CMA’s work covers both types of website.
- The total value of car rental sales in the UK was estimated to be around £1.2 billion in 2012. These sales were generated from 12.3 million transactions.
- Further details about the CMA’s work with the five leading car rental providers is available on the case page. This project was carried out in partnership with the European Consumer Protection Co-operation Network, which comprises the consumer protection authorities from each EU Member State and the European Commission.
- Enquiries should be directed to Simon Belgard (firstname.lastname@example.org, 020 3738 6372).