Bonds and excesses

Often rental companies will take an imprint of your card as a security bond. Some companies don't put this through at the time, but others will whisk out the bond straightaway and refund it later once the vehicle is returned. Security bonds can be thousands of dollars.

Find out how the bond is charged before making a booking. If the company does take money from your account, your credit card will accumulate interest unless you pay it off by the due date.

For overseas car hires, adverse changes in exchange rates may affect the cost of the bond.

Large bond
Nicole Campbell booked a campervan with Britz over the internet. The campervan was for a seven-day holiday with her three-year-old son. Nicole thought she'd discovered the most affordable deal - $31 per day plus a $100 pick-up-fee and an insurance bond. But when she arrived at the pick-up-point, she was shocked to hear that the bond was $5000.

"I'd expected to leave some sort of bond by way of credit-card imprint, but I didn't have that sort of money lying around."

The insurance "excess"

The $5000 bond was for the insurance "excess". In Nicole's case, $5000 would've been the maximum amount she'd pay if the campervan were damaged. Britz points out that the bond is reasonable considering each campervan costs around $110,000 to make.

Nicole could've paid extra per day to reduce the excess bond on her Britz campervan. Currently, you can reduce the excess to $2500 for a non-refundable fee of $20 per day, or you can reduce the excess to nil for $38 per day. This daily charge will add substantially to your rental costs (almost an extra 50 percent if you choose to reduce the excess to nil).

While we don't think that Britz's online booking process is misleading, you need to know what an "excess" is and how the bond will be charged. We recommend ringing the rental company well before the pick-up date and getting them to run you through the booking process.

Tips to reduce your excess

• The rental company's "excess reduction waiver" is an additional fee you pay to the rental company to reduce the excess, but they're not cheap. For cars, a daily waiver of around $25 can bring the standard excess down to $350 (this varies between companies).
  
  
• A cheaper option for overseas hires is to see whether your travel insurance covers the rental-car excess. This will usually be up to a maximum amount (for example, State Insurance and The Warehouse cover the excess up to $2500). You still might have to pay the first few hundred dollars of a claim - depending on the policy.