Hire firms charging consumers for repairs that are not completed

31 July 2017

Investigations by two British newspapers have revealed how motorists are being charged more for vehicle hire and insurance than they should actually be paying,

According to the Daily Mail, British tourists are being billed for fixes on hire cars that are either not required or for work that is not carried out. The newspaper claims that companies such as Avis Budget, Hertz and Enterprise claim a lower resale value on a vehicle when it is sold on from the fleet.

Europcar, meanwhile, has admitted it does not always repair damage until it is about to pass the vehicle on, allowing it to pay less for the work, as one fix may cover several areas of damage. The newspaper has passed its findings on to UK Trading Standards, which is already looking into claims that Europcar has overcharged customers for repairs in the UK.

Labour MP Wes Streeting comments: ′To find that leading, trusted car hire brands are ripping off customers in this way is nothing short of a scandal. Customers hand over significant sums of cash with the clear expectation those repairs will be carried out. The government should act quickly to tighten the law if that proves necessary to end this practice.’

The newspaper quoted statements from three companies involved. An Enterprise spokesman said ′In 97% of cases the vehicle is ′repaired soon after’ the customer is charged. Occasionally we charge for damage but do not repair vehicles if they are due to be sold ″¦ we would accept that they have a lower resale value.’

A spokesman for Avis Budget said it repairs damage immediately if there is a safety issue, adding that other repairs may be carried out after another rental or as part of a resale, ′to maintain the highest level of vehicle availability. In some cases it is necessary to absorb a reduction in the sales price’.

Finally, a spokesperson for Hertz said: ′We might choose to delay small or minor repairs provided they will not impact the safety of our customers ″¦ we might also choose not to repair a damaged vehicle before selling ″¦ the resale value will fall in line with the damage caused.’ Meanwhile, The Telegraph newspaper reports that every driver in Britain is being overcharged for motor vehicle insurance cover as companies are using secret deals to grossly inflate repair bills, sometimes by up to 100% of the actual charge.

The system is used by insurers representing drivers involved in accidents which were not their fault to rip off rival firms representing the ′at fault drivers’ for repair work. The newspaper states that across the industry the process is creating a hidden cost layer potentially affecting all drivers, which could be worth as much as £750 million (€838 million), equivalent to around 5% of the UK’s 34 million drivers’ annual insurance premiums.

In July 2017, it was announced that Europcar had been found to be charging customers for repairs on British-based vehicles that were damaged in hire, while not actually carrying out the repairs. In a statement at the time, the company said that it expected to have to offer compensation in the region of £30 million (€33.5 million).

The news is likely to start an investigation into hire and repair practices of companies in the UK and Europe, as well as how insurance repairs are managed by such firms.