• Avoid Foreign Transaction Fees

Pay in the U.S. and incur no credit card foreign transaction fees; typically about 3% of the rental cost. Of course you want to make sure you can cancel for a full refund right up to the time of rental.

• Avoid Currency Fluctuation

Your U.S. dollar price is “locked-in” and not subject to currency fluctuation. Even though your quote was expressed in U.S. dollars, if you don’t pay until you arrive in Europe, you will be charged in local currency…which will have changed in value against your home currency between the time of booking and the start of the rental. Of course waiting to pay until you get to Europe cuts two ways: you can end up paying more or less than what you were first quoted.

• It's Your Best Shot at Ensuring Vehicle Availability

But the big problem with an unpaid rental car booking is vehicle availability. Rental companies say they treat unpaid bookings the same as if the rental is pre-paid, but let’s view this from the perspective of the rental company's station manager on the day of rental.BMW Automobile Photograph

First, some background. A high percentage of European car rentals are made online with no financial commitment (credit card) required. You, the customer, get a booking number, but the rental company gets not a dime of your money, only your vague promise to rent a specific vehicle category in a certain place at a certain time. However, if your plans change there is no incentive for you to return to the website or call the supplier to cancel the booking. You have nothing at stake. (We are aware of customers who, since no financial commitment is required, book multiple cars with multiple companies in order to cover their various travel options.)

That means rental companies can only estimate how many vehicles will be required at a specific hour, on a certain date, at hundreds of rental locations in 35 European countries. It’s all guesswork. Their estimating job would be a lot easier if it were a single product but it is not. A daily estimate is required at hundreds of locations for each of some 25 to 30 vehicle categories (economy, compact, intermediate, full-size, premium, luxury, SUV, van, compact station wagon, compact automatic, compact wagon automatic, intermediate wagon, intermediate wagon automatic, full-size van, full-size van automatic, premium van, and on and on).

Let’s say, for example, that you book an intermediate sedan with automatic transmission for pickup in a small town in France where there is just one Avis office. Keep in mind that automatic transmission cars are scarce in France’s rental fleets, and especially scarce outside the major cities such as Paris and Lyon. Let’s further presume that on the day you are to pick up your car, after factoring in its usual percentage of “no show” renters who didn’t cancel, the complicated Avis computer algorithm has “guessed” that five intermediate automatics will be needed on the day of your rental. Let’s also specify that there are exactly five such cars on the Avis lot in the small French town you have chosen. If the algorithm has guessed incorrectly and six customers with confirmed reservations show up, somebody doesn’t get a car. Given the above, would you rather be the customer with a pre-paid reservation or the customer with just a booking number?

But even if Avis station manager has five intermediate automatic for five bookings, what if the first person through the front door that morning wants an intermediate automatic but has no reservation? Remember, the station manager’s compensation is based partly on the number of cars rented. Will he turn down cash in hand to hold your unpaid booking when he knows from experience that you may never show up? Pretty unlikely. So, he takes the bird in hand figuring he’ll deal with you later. If, by the time you arrive, all intermediate automatics are gone, he will offer a manual transmission car or perhaps a smaller automatic. If he’s desperate—and he has one—he may upgrade you to a luxury automatic that…be careful…is not covered by your credit card’s insurance.

Of course, if your booking calls for a 1pm pickup and you don’t arrive at the counter until 1:30pm, the station manager is home free. He shrugs and says he’s sorry but you missed your appointment. Again, in these scenarios involving not enough cars to meet the demand, would you rather have a booking you paid for in advance or one in which you had made no financial commitment whatsoever?

Apparently, the no pre-payment model works for rental companies or they would stop doing it. But it sometimes doesn’t work for travelers. The unfortunate by-product is rental car customers who think they have a reservation but discover they don’t at the rental counter. As Jerry Seinfeld puts it: “You know how to take the reservation, you just don’t know how to hold the reservation…and that’s the most important part.” In our experience, to combat this unfortunate business model, a pre-paid, confirmed car rental booking…plus 24/7 phone support from a third party that is NOT the rental supplier... is the best protection against disappointment. Such protection is absolutely essential…especially if your rental is to be an automatic, a van, a station wagon or a premium or luxury vehicle.

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