Shopping for car rentals online is almost always a confusing process. One of the choices that customers are most commonly confronted with is whether or not to make your standard reservation (where you don’t provide payment information) or paying for the rental up front ahead of time. Is prepayment worth it? That’s the question we’ll try to answer today.
Believe it or not – the no-show rate in the car rental industry is right around 30%. That means that for every three people who sign up to rent a car, one of them doesn’t show up. In order to combat this, rental companies like to overbook locations in order to get close to being able to rent the majority of their cars. As such, that’s why you’ll show up sometimes with a reservation and find that the kind of car you want isn’t available on the lot.
One of the leading causes behind no-shows is – you guessed it: not securing payments with a credit card in advance of the sale. Without any skin in the game to motivate them to show up, they simply won’t show up. As such, that’s why the whole prepayment method exists to begin with.
Some rental car websites will ask you to pay now or pay later and sometimes – the difference in rate can be a thing. In most cases, you’ll find that prepayment cost will be around 5-15% lower than your standard reservations. Long story, short – the company is willing to take a hit in order to insure you show up to rent the car.
Now that being said- while that 15% mark can be seductive, consider this first: if you cancel your reservation, then you’re on the hook for a cancellation fee. Some major renters even have it so that if you cancel within a day, you still have to pay for the entire rental. The other nuance is that it’s typically discounted of the published rate only. If you have a discount or coupon offer handy, it usually doesn’t apply. It’s not a TOTAL deal breaker, but you should always tread lightly. Know that paying now does bring with it a slight increase in risk on your end.
Priceline, Hotwire and the like
These sites absolutely help you achieve discounts, but the big drawback is that the policies can be more restrictive than what you see with the actual rental companies, themselves. Renters LOVE these reservations, because they get paid no matter what. Consumers mostly love them because they get steep discounts. Just make sure you actually make the trip. If you don’t, you may be out more money than you think.
Is it worth it?
The only thing you need to make sure you do if you’re going to prepay is that you actually make your trip and follow through on the reservation. Opaque sites can get you steep discounts, renters will give you discounts, but don’t cancel on them. You won’t get your money back.
Also bear in mind – rates change multiple times a day. What might look like an awesome deal today can be a wash tomorrow. Learn to place the pricing game by checking your rates daily. If you lock yourself into a prepaid rate, you can miss out on potential savings.
So our verdict: Reserve when possible, just do your homework first!