Just Initial Here
You rent a car for a few days because you don't want to drive your 1998 Contour with 105,000 miles from Philly to Erie to see your kid play clarinet in the Pennsylvania High School Music Educators State Band.
So you pick "Budget."
Here's what can happen:
They offer you their insurance coverages. The total premium is about $53 per day.
You say, "Nah, I've got GEICO (or Allstate or State Farm or Nationwide.) I'm covered."
The kid behind the counter says "Okay fine, initial here and here and here and sign here."
You do it quickly.
It's 9:30 AM and you have to leave by 10:00.
Maybe if you weren't pressed for time you'd read what you just signed. Because what you signed is a binding contractual obligation.
You drive to Erie. The trip goes well.
That night, while your're eating dinner, some drunk slams into the rental car in the parking lot at Damone's.
He leaves the scene.
Amazingly, nobody saw anything except a black coupe with front end damage charging out of the parking lot with its lights off, making a right on red, and laying rubber into the darkness.
A few days after its towed to the Ford dealer, the rented Taurus' damage is estimated by an appraiser hired by Budget.
Believe it or not, there's $6800 of damage on Budget's vehicle!
Budget hauls it away-they don't actually fix vehicles hit that severely-and you relax, because your "InsuranceGuy" told you your insurance would cover the damage.
You're out your $500 deductible, but you can deal.
Weeks later, back at Budget, they're preparing their demand for reimbursement from your insurance company.
They list the $6800 in damages. They list the $200 tow. They list the $150 in storage at the Ford dealer.
These amounts are no problem for your insurance company to accept. Your insurer is only too willing to pay them since liability is not an issue.
But then Budget gets creative.
All rental companies are creative, but Budget is extremely creative.
Because Budget tells the insurer, in their "Demand for Payment," that there's more to this request than the damages and the tow and the storage.
You may ask, "What more can there be?"
Well...there's "Administrative and Estimating Fees."
"What are these?"
Budget might reply with this:
"Estimates don't write themselves. We had to have an Independent Appraiser go to the vehicle and write it. He charged us $125 for this service. Then there's all our paper handling so we added an additional $30 for that."
Next there's "Loss of Use."
"What's 'Loss of Use'?"
Budget might reply:
"Since this car was damaged we weren't able to rent it to anybody else. And because this vehicle was out of service we MAY have lost SEVERAL customers (believe me, they didn't.) So we used our formula (more secret than Coca-Cola's) to figure out our Loss of Use amount. We've calculated the amount to be $990!"
Now most rental companies demand Loss of Use reimbursement from the insurer. But they might drop the demand when the Loss of Use is denied. Usually other companies are asking for about $350. $990 is the HIGHEST Loss of Use I've ever seen.
Finally, there's the piece de resistance of all the extra fees:
Valued Customer, may I present... "DIMINISHED VALUE!"
As stated, all car rental companies fool around with Loss of Use and admin fees when presenting reimbursement demands to the renter's insurance company.
But Budget is the unmitigated "KING."
And their Crown of Thorns is the godforsaken concept of "DIMINISHED VALUE."
What Budget is saying with Dim Val is this:
"We lost sales revenue at the auction on this vehicle when you wrecked it. And because we did we're going to charge you for our loss."
Don't let your eyes glaze over at this point, because what I'm going to tell you directly impacts not only your pocketbook but your, and your families, emotional well being.
Budget uses their in-house created "Diminished Value" worksheet.
No expert on auto physical damage, no auto-rental-industry overseeing committee developed it.
It's Budget's in-house created Frankenstein.
When calculating how much Dim Val to demand from the insurer, Budget calculates how many of the replacement parts, and how much of the repair labor, and how much of the refinish labor is eligible for inclusion in their formula.
They enter these figures onto their calculation sheet (which they send to insurance reviewers like me, so I HAVE studied them) and they multiply a subtotal by a pre-determined mathematical factor, such as 2.35, (I'm NOT making this up) and this determines a final dollar amount which they present to the insurer as part of their demand.
If the damage to the vehicle is significant, as with my FICTIONAL renter described above, this Diminished Value figure can be FOUR or FIVE THOUSAND DOLLARS!
Budget then sends their demand to your insurer.
It consists of the estimate amount (let's use the $6800 from above) PLUS the admin fee($150) PLUS the Loss of Use ($990 )PLUS the Diminished Value (say, $4600).
So Budget says to your insurance company:
"We want $12,450 for this $6800 loss.!"
Folks, your insurance company is NOT going to pay it.
You can't blame them.
They'll pay the $6800 plus the related tows and storgage, etc. but they won't pay for the crap.
Check your policy. It may specifically state that they won't pay for this crap.
Although I don't think they use that word.
They won't pay for the crap because, as a "Third Party" to this loss, they only owe for "what we did" i.e. the damage to the rented vehicle which occurred while it was being used by our insured.
They do not owe for Budget's subjective, unverifiable, costs-of-doing-business charges and alleged revenue-diminishing deletions.
Insurers are NOT going to subsidize Budget's Profit Sharing Plan!
So Budget says this (and I had two claims I reviewed this week where this happened):
Budget says, "We agree to your offer for PARTIAL settlement. WE WILL BILL YOUR INSURED FOR THE REST WHICH REPRESENTS THEIR CONTRACTUAL OBLIGATION."
Do they do it?
What if you, like any righteously indignant victim who senses a major league screwing approaching, says, "Go to hell, Budget!"
They may send your unpaid bill for $6000 to a collection agency, one of those endearing institutions which calls your house every other day and leaves messages on your voice mail. Or perhaps they'll leave an intimidating message with your teenage daughter-one she has to relay to you tentatively at the dinner table- saying they need a call back concerning a "matter of great urgency."
And through this collection agent, good ol' Budget might threaten to contact Trans Union, which they'll say they really don't WANT to do. But, they'll add, we can avoid all this unpleasantness if we can come to a payment agreement. But if we can't reach an agreement, your recalcitrance, causing us to initiate this action, could cause your FICO score to drop precipitously from it's current, pristine, 788.
This horror story has happened because you waived the insurance coverage and signed the rental agreement, an agreement which is a legal contract which states you'll be responsible for "Diminished Value," an amount which could be in the thousands of dollars,
And then you had to go and select the wrong parking spot at the restaurant.
Suddenly a trip of pleasure has become a long journey into a dark night of tension and turmoil.
Budget seems to practice one of the worst traits a corporation can exhibit:
Callous disregard and lack of empathy for their customer.
I looked at a demand from Budget this past week and saw a $7000 estimate to repair Budget's car. I looked at their demand sheet which accompanied the estimate. They wanted $13,700.
I know when I refuse to pay these outlandish fees, as I WILL do this coming week, (I left a message for their rep this evening) a return call will be received from "Kristen" or "Carrie" or "Brad" or "Kirk," one of Budget's underpaid, easily exchangable, improperly-seduced-into-believing-management-opportunities-exist, twenty-something employees (check out rental car company's employee turn-over rates.)
And with all the intimidation she can muster, she will say something like this:
"Well, we'll just have to bill YOUR insured ( Note, this person is Budget's customer, too!) for the balance!"
As loan sharking is to banking, so too is "Diminished Value" to car renting.
Stay away from Budget!