Renting a car requires some form of deposit. The car rental company, as a business, wants to protect its asset—the car you’re leasing. In the event of an accident, damage of any kind, or returning it late, the car rental company may deduct part of the deposit or hold on to it entirely. Usually, such a deposit is in the form of a credit card. In rare instances, you can use cash. For instance, you can get a cash car rental at MiramarSpeedCircuit.
How Much is a Car Deposit?
Car rental deposits can range anywhere from a few hundred dollars to thousands. Of course, several factors can determine this. For instance, if you’re leasing a sedan, you may have to pay $200. On the other hand, leasing one of the latest luxury vehicle models can set you back up to $4,000. Other factors that will determine how much you pay for a car rental include:
i) how long you intend to have a car for
ii) whether or not you intend to cross international borders
iii) your driving history. While this is rare, it can become an issue if you have multiple citations on your driver’s license.
iv) season trends. During the holiday season, car rental prices can go up because of increased demand from many people.
iv)Where you’re renting the car. In some states, car rental prices tend to be higher than in others.
v) car theft protection insurance. In some jurisdictions, car theft is a major issue. As such, car rental companies will want to protect their asset–the car. This means they’ll charge higher rental fees.
Making the Payment
Once you’ve chosen the kind of car you want to lease, it’s time to sign the rental agreement. Most car rental companies only accept credit cards made in the driver’s name. In rare cases, they may accept a debit card in the driver’s name. Once they verify this information, you can sign the car rental agreement. Once you do that, the car rental company will block your credit payments. Blocking, in this instance, means that they won’t deduct any payments from your card. However, they’ll simply pre-authorize it. Such a transaction will not show up on your credit card statement because the car rental company has not taken any payment. For example, if your credit card balance is $5,000 and the car rental fee is $3,000, the difference is $2,000. This means that you cannot make any credit card purchases above $2,000 during that time when the car rental company blocks your credit card.
A similar arrangement also happens when you use your debit card.
Why Car Rental Company Avoid Cash and Debit Cards
Most car rental companies prefer drivers that have credit cards. This is because if you have a credit card, it means that a financial institution finds you worthy of credit. A car is considered a high-ticket item. As such, a car rental company will not risk losing its car to someone considered less than credit-worthy. Paying cash has its risks. For example, the driver may decide to skip town, leaving the car rental company with a loss. Similarly, a debit card is generally not accepted. This is because a debit card is a direct reflection of the amount of money you have in the bank, which tend tends to be limited. Should you bring back a damaged car after leasing, the car rental company may be left footing the extra cost if you don’t have enough funds on your debit card. To avoid all such scenarios, many car rental companies prefer not to deal with customers that don’t have valid credit cards. This credit card has to be made out in the name of the driver leasing the vehicle.
Getting Your Deposit Back
Contrary to what most people think, car rental companies are not out to get your money. As long as you fulfill your end of the bargain, i.e., bringing the car back on time and in good condition, you’ll usually get your deposit back. Of course, you can’t expect your deposit back if the car is damaged, very dirty, has scratches, or is not brought on time.
If you’ve used a credit card to lease the car, the car rental company will simply deduct payment from it, having placed a block on it when you signed the car rental agreement.
To ensure that you get your deposit back, do the following things:
i) always drive the car carefully after leasing it
ii) avoid carrying rowdy passengers. For instance, your beer buddies that have wild drinking habits shouldn’t be passengers in a rented car if there is a risk that they’ll cause damage to it.
iii) take the car for washing before bringing it back to the rental company.
Of course, you’ll need to be vigilant right from the beginning. After signing the car lease agreement, ensure to inspect the car thoroughly before driving it out of the lot. If there are any scratches or damage, be sure to inform the attendant about it and that it is noted on the car lease. This ensures you’re not on the hook for damages you did not commit.
All in all, a deposit is the car rental company’s insurance policy.