Ok, what's up with all the car rental taxes and surcharges?

Car Rental taxes and surcharges are added to your car rental base rate. The base rate for your rental includes the time, or length of the rental, and mileage.

Amounts displayed in the total price or approximate total will include all mandatory fees that you must pay. The total price of your car rental will include the amount of taxes, governmental fees and other charges payable by you directly to the car rental agency when you return your rental car.

You will often see the term approximate total, after the car rental taxes and surcharges are calculated, because it is based on the location, dates, times and vehicle size that you have specified. Any changes in one or more of these items could result in a different total)

The car rental taxes and surcharges will include sales taxes, concession fees, licensing fees and other government imposed fees (like a convention fee or government building project fee).

Airport Fees

An airport fee or airport concession fee is a recovery fee. The airport charges the car rental company a certain percentage of each rental, for the right to operate on or near the airport. This fee is collected by the car rental company and paid to the airport.

Airport fees tend to average about 10% cost to your car rental. Some renters believe that they can avoid the airport fee if they are local, or wait until the next day to pick up their car, but the rental agency is contractually required to pay the concession fee to the airport, whether the renter is a local or has just flown into town that day. The same generally applies to near-airport rental locations. Of course you can avoid an airport fee by picking up at a neighbourhood location, but be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location.

If you are picking up a rental car at a hotel-based location, you may see a hotel concession recovery fee, include in your car rental taxes and surcharges. It is the same concept as an airport fee.

A 2005 study from Travelocity states that major American airports tacked on an average of 25.8 percent to your total bill (up from 24.4 percent in 2003) in airport fees as well as local and state taxes. Many local governments charge fees to fund local development projects, such as convention centers or sports stadiums.

State or City Imposed Funding Fees

The added taxes (such as a convention center surcharge) are imposed by local and state governments, as a means of drawing income from travelers in order to fund local projects. Travelocity's 2005 research findings also showed such taxes to be dramatically lower at neighborhood car rental locations than airport locations, averaging only 14.1 percent of the final cost.

Many renters feel that it is the car rental companies that make up all these extra convention surcharges or stadium taxes and fees, but they are, in fact, government imposed.

Besides airport fees, state taxes and licensing fees, Rental car fees have long been a means for local governments to generate funds for stadiums, convention centers and concert halls in various cities.

In enacting these fees city officials believe that local constituents are shielded from payment because out-of-town visitors - and therefore non-voters - carry most of the burden. The car rental industry argues against such fees and taxes that have nothing to do with rental car operations. "It's inequitable and unfair because they're unrelated," says Laura Bryant, a spokeswoman for Enterprise in an article in USA Today in October of 2006. She stated that at that time, there were 86 taxes unrelated to rental car operations that were being levied nationwide. State and local officials were discussing 48 additional proposals.

Sales tax and airport charges vary considerably from state to state and from country to country. Unfortunately, you probably can't avoid state and local sales taxes -- or the European equivalent, the value-added tax (VAT), which can be as high as 25 percent. (Note that in some countries you may be entitled to a partial refund of the VAT.) Click here for more information on International Car Rentals.


License Fees

Some states allow car rental companies to charge extra to recover the costs of licensing their cars, usually between 3 and 8 percent of the cost of the rental. You would see this fee listed as a vehicle license fee, in your car rental taxes and surcharges.

Some fees that wouldn't be listed in your approximate total would be:

Early Return Fees

You might imagine that returning your car a day or two early would be a good thing for your car rental company, but unfortunately you might be charged for that. Some car rental companies will charge you $10 - $15 per day for early returns and you may also have to pay a rate difference if your shortened rental period means you no longer qualify for a weekly rate.

Optional purchases

such as

special equipment will cost extra and not be included in the car rental taxes and surcharges, or your approximate total.

There will also be extra charges if you purchase any optional Car rental insurance.

Other Additional Fees If you are under 25 years of age, or have an additional driver, or don't return your rental car with the proper amount of fuel there may be extra fees imposed. You can find more information under Car Rental Policies.

If you plan to return the rental car to a different location than the one you picked up from, make sure to check if there are any extra fees associated with a One way rental.

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