Avis adds $10 rental extension fee to offset “cost of reorganizing our fleet”

avis1When Drew Tipton tried to add a few more days to his Avis rental, he expected to pay the daily rate. But wait, what’s this on the bill? A $10 rental extension fee?

Yes, I believe it is.

What’s a rental extension fee?

Tipton wondered. I did, too. So he asked.

Now, I have to say, the following form response from Avis is art.

Good art? Bad art? You decide.

Reports such as yours are most appreciated, since they help us target and correct areas of service which might be improved.

Any difficulties or problems encountered are a concern to us, and we apologize most sincerely for the inconvenience you were caused. I am sorry that you feel our agent did not inform you of this additional cost.

With the current economic situations, the rental car industry is tightening up in many ways. The rental extension fee offsets our cost of reorganizing our fleet to meet the needs of the other confirmed reservations. We do this by looking at the reservations in the system and moving our fleet to where they are needed most based on the reservations in the system.

Although we realize that we cannot make up for the disappointing experience, we do appreciate your contacting us.

If I can be of any further assistance, please let me know. Thank you for choosing Avis and we hope to see you at one of our rental counters very soon.

Tipton has his own opinion: “It’s PURE profit on their part,” he told me.

Maybe, but wouldn’t you pay $10 just to get one of those form letters? Well, maybe not.

(Photo: schmense/Flickr Creative Commons)

  • Cassivella

    A car rental company does incur additional costs when someone extends his/her reservation.

    It may not be as obvious at airport locations, but think about the smaller neighborhood locations.

    If your car is due in on Tuesday, and you don’t show, then the company needs to find another car for the person who was planning to rent that car on Tuesday evening or Wednesday morning.

    One way car rental companies deal with this is to give the second person a “free upgrade” to a better class of car – but really, the car rental company is losing out on revenue for this rental.

    The second way of solving this is that the neighborhood location borrows cars from a larger facility. Thus, they have to send someone to fetch enough cars to meet their needs.

    Personally, I’ve been on the receiving end of the second situation. I flew out in the middle of no where, the car rental company was expecting someone to return a car, the person did not return the car on time, and I had to wait until the employee got back with a car for me (since there were no other companies to which I could be “walked”).

    So, do I think that someone who doesn’t plan ahead deserves a $10 fee? Yes. Obviously, $10 is not a lot of money to pay for the pleasure of changing your end of a contract (after all, airlines will charge you at least $50 if you do that).

    And, I agree with Chris – that is one sexy customer service letter!

  • Ani

    A friend of mine just reserved a car in Las Vegas (not sure which renal company) and was charged a $3/day fee for taking the car off the premises. Isn’t that the whole point of renting a car and what you are supposed to be paying the rental fee for? Now, an extra to remove it from the rental car lot!

  • MarkieA

    @Cassivella

    I understand the situations you describe, but I still don’t see how that translates into higher costs. OK, perhaps the “free upgrade” situation. But really, the rental car company pays an employee for his/her shift during the day. What that person does during that shift – washing cars, refueling cars, “finding” another car – aren’t they paid the same regardless?

  • Kevin

    @MarkieA

    It’s called a Lost Opportunity Cost. While that employee DOES get paid the same regardless, he could be doing something more useful to benefit the Rental Company instead of the person that didn’t return the car on time.

  • Andrew

    What ever happened to incorporating the “cost of doing business” into the price of your goods/services? Oh yeah, it’s easier to trick consumers by lowering your prices and tacking on a bunch of line-items to the final bill.

    They may as well have a fee for everything: “Driver License Inspection Upon Exiting Rental Lot Fee”, “Electricity To Vacuum Car Fee”, heck they may as well throw in “Stockholder Dividend Fee” and “CEO Bonus Fee” while they’re at it.

  • Cassivella

    I think that what a lot of readers here lose sight of is that contracts work both ways. We expect some sort of compensation when an airline or car rental company does not fulfill their side of a contract (a contract being an airline ticket or a rental agreement). I’d say that the majority of complaints to Chris are somehow related to this.

    However, no one expects to be held to their side of the contract. When I rent a car, I sign a contract that states the company will provide me with a rental car and that I will return said car in the same shape it was when I got it and will return it when I said I would return it.

    I’m far from an apologist for car rental companies or airlines, but I deal with these companies on a daily basis – I travel for work every week day. If you go in with the mind-set that these companies are just that – they are businesses trying to conduct business – you will have a much better experience while traveling.

    Customer service is all about exceeding expectations. But, consumers need to educate themselves (i.e., read your rental contract or airline carriage rules) so they can have proper expectations. Then, when Avis waives your $10 charge because your rental had to be extended due to circumstances out of your control – and because you admitted that you qualify for that extra fee but you were accepting and nice to the rental agent – then you can be pleasantly surprised.

  • John

    I guess I can understand this from the Avis side if he extended after he picked up the car. They plan out their fleet based on reservations and his car may have already been reserved by someone else for the days he’s extending. They would then need to either bring in another vehicle or “walk” the person if they didn’t have anything else in the fleet. Either way bringing in a vehicle or walking the person adds an expense that they didn’t have.

    Unlike a hotel room … they may not be able to just say no

  • Noah

    “What ever happened to incorporating the “cost of doing business” into the price of your goods/services? Oh yeah, it’s easier to trick consumers by lowering your prices and tacking on a bunch of line-items to the final bill.”

    –actually, what makes this so offensive is that there is little doubt that the “cost or reorganizing the fleet” IS included in the price we pay for the rental. This is just an added fee for something that, in essence, you’ve already paid for.

    “We expect some sort of compensation when an airline or car rental company does not fulfill their side of a contract (a contract being an airline ticket or a rental agreement).”

    – Yeah, but that’s not what the rental agreements provide. If there aren’t any cars available, you’re SOL and the rental company doesn’t have to do anything for you. I’m pretty sure Chris has had a couple of those posted here.

  • Drew

    OK.. so let me give a little bit of background here… :)

    This is an airport location that has ALWAYS had a car available for me when I’ve needed it, even if I’ve called up an hour before picking it up. I’ve never had them say “we’re out of cars.”

    In fact, I _have_ had Avis say “no, we can’t extend your rental, because we need the vehicle”, so that’s not the case either.

    I also travel extensively for business (approximately 50-70% of my time is spent traveling), and I’ve been Avis First for the last 3 years. I have extended cars in the past (in fact, one just last month!) and _didn’t_ have this fee (yes, I checked, and I haven’t been charged this before) charged to me.

    What annoyed me the most about it was that they didn’t disclose it to me when I extended the reservation, nor is there any note about it in the ‘terms and conditions’ brochure that they gave me with the contract. In addition, they also didn’t say anything about it when I turned the car in! That’s what annoyed me… they didn’t say anything at all about it at any time, they just added it on.

  • Carver Farrow

    @Drew

    I think you inadvertently explained why tis fee is fair. They always have cars. Perhaps its because they don’t say no and go the extra mile to obtain cars from other locations as necessary. All of that takes time and effort.

    Since you are a good customer, I’d be surprised if they didn’t waive the fee, particularly if its a new fee that the customer based hasn’t had a chance to become familiar with.

    Or just rent from Hertz like I do.

  • Chris in NC

    Wait a sec here! Everytime I rent a car, the contract clearly spells out what the rates are if you DON’T turn the car in on time. Truth is, they already charge you a premium if you extend the rate and it is disclosed on the contract. To add another fee is unreasonable.

    I have to side with Drew on this one. There are any number of reasons why a car rental needs to be extended that are beyond a renters control. Reasons I have had to keep a car longer than anticipated include one time where I was in sunny Florida and all flights north were canceled because of a massive snowstorm. In that case, I was able to keep a car overnight and find a hotel away form the airport where the rates were less expensive. Actually, it was the Hertz agent who told me to check on the status of my flight first BEFORE he processed the return in the computer. When I found out my flight was canceled, he gave the keys back to me. I didn’t understand it at the time, but when I returned the car the next morning, there was no additional cost, because my total rental period had not exceeded the 24 hour day that I had already paid for. The morning agent told me it was standard practice when NB flights were canceled, it was standard practice to offer customers the option to keep their cars overnight, so they could find lodging away from the airport. Many times, it would be at no additional cost because they didn’t add a day until the original 24 hour period had come due. Now that’s customer service. Then again this was in the 1990s when I was in Graduate School. Would this happen now? Probably not! But, since then, I have given Hertz my fair share of business and is an example of how employees that uses logic and common sense won over a lot of business from me in the long haul.

    I side with Drew here. His contract should spell out what the terms are if he extends the contract (mine always do). If I read this right, this fee was not properly disclosed and this is outrageous.

    Is fleet management affected? sure, but honestly, they do such a terrible job at it anyway, I’m not sure that customers are the ones to blame. How many times do you to go XYZ rental and see a line that stretches out the door, or are told there are no cars available, etc. etc. I’ll admit, there are times when I have reserved cars from 2 companies simultaneously and then pick the company with the shorter line! I’m sure I will get slammed by some of you for contributing to the “fleet management” problem.

    My 2 cents

  • Carver

    @Chris in NC

    I did some checking. Avis clearly spells out that extending a rate will cause additional fees. So I’m not buying this lack of disclosure.

    Also, the statement that you are charged a premium for extending a reservation is not necessarily true and demonstrably false at Hertz. What happens is that your extension may nullify one or more discounts. For example returning a car on Tuesday instead of Monday nullifies the weekend discount.

    But returning a car on Monday instead of Sunday just adds one more weekend day to the rate.

  • Kathyj

    What if Mr. Tipton had returned the car & rented a new one? No extension fee, and the company would have had the expense of prepping two cars, doing the paperwork, etc. He’d have been out the time, and that may not have been convenient.

    All that said, I agree they should have disclosed this to him up front, mentioning if they really didn’t have cars available. I’m sure his status as a good customer precluded the latter, but if he’s such a good customer, why the charge? And we know these companies overbook at least sometimes, as anyone who’s arrived late in the day to find no cars available can attest.

  • Bill

    If the travel industry continues with all of this fees nonsense, they are going to end up like the health care industry where they have an army of people documenting all of the charges.

    My cellular company currently charged 95 cents for minutes in the United States and an extra 50 cents when there is a long distance charge. So if I receive a call or make a long distance call, it costs $1.45 a minute. If I make a local call, it costs 95 cents a minute.

    I just got an email from them, and soon, “for my convenience”, instead of showing these charges separately, they will just charge $1.45 for all minutes in the United States. No mention whatsoever is made about the fact that local calls made in the USA will go up from 95 cents to $1.45…it is entirely “for my convenience” apparently so I do not get confused with my bill. They will make significantly more money from this and it is a cash grab.

    Sorry to distract from Avis, but this whole fee business has gotten out of hand, completely.

  • http://www.best-car-rental-tips.com Paula

    I just checked on the Avis website for information regarding extending a rental. The site states that if you call to extend a rental “a service fee of $10 will apply and your your original per-day rental rate may change. Your reservation agent will provide all details when you call. If you don’t call to notify Avis that you will be keeping the vehicle longer then expected within 7 hours of your originally scheduled return time to extend your rental, a $10/day late fee will apply. ”

    So, if I understand this, if I find out that I need my car for 4 extra days, but don’t call within 7 hours of my expected return time, I would be charged the $10 service fee AND a $10 per day late fee? (plus, of course, the charge for the extra days and do doubt a higher rate for the days that I’d already rented for!) Many rental car extensions have to be done because of last minute changes…. flight cancellations, family emergencies, etc. That $10 per day late fee seems extreme to me… and I think that this new policy should be quoted to a customer WHEN the vehicle is being picked up and the contract signed…. When the agent is verifying the return date and time, it only takes a few seconds to explain what will happen if you need to keep the car longer.

  • DeVon

    Avis is out of control for charging a rental extension fee. All the comments about it costing Avis money to extend a rental is a little off base. Most rental companies inventory is just sitting on the lots. The only way I can possibly see a fee like that being legit is only in the event the rental agency is completely sold out. If the rental lot isn’t sold out, there is no reason for there to be a rental extenstion fee.

  • http://www.rentalagreementtemplate.net rental agreement template

    Hi guys first I would like to say that your guys comment it was quite useful for me. I also face problem with rental thing as well at my area. I mean renting a car. Sometimes they let’s me rent a car it was not good condition. when I use it an then it’s just can not work sometime make me can not send it back not on time that’s why they can charge me higher price. So for that I have some question to ask. Do they have some law to control them? I mean in term of they was take advantage of the customer like mee. Thanks for the advance for a good response.