If you rent a luxury or exotic car in New York, the company is legally not allowed to take a security deposit or put a hold on your credit card for potential damage to the car. This applies while you have the car, while any disputes about damage are unresolved, and until a court makes a judgment. This includes an advance charge on your card for damage to the car while the car is still in your possession. Even when renting high-priced exotic cars, this rule still holds. The legal definition of “rental vehicle” doesn’t make exceptions for any rental vehicle based on price.
You don’t need a credit card to rent a car in New York. The company can’t refuse to rent to you just because you don’t have a credit card, though you might need to go through a screening process that may last several days.
A car rental agency has to rent to anyone 18 and over if they have a valid license. You may have to pay a ”young driver surcharge”, if you’re under 25. Rental companies all set their own rates for the surcharge, so shop around. And your spouse may drive the car (as long as they’re 18 or older and licensed). Everyone else who drives must be listed and may be charged up to $3 a day.
The Most You Can Be Charged
If you damage the car, the most you can be charged is whichever is less, either the actual reasonable repair cost or fair market value before damage minus salvage. New York state law allows you to decline rental company collision insurance, but companies may still try to charge for ”loss of use” (rent lost while the car is being repaired) and administrative fees. A 2003 opinion from the State Department of Insurance said the company shouldn’t be able to charge you loss-of-use or admin fees as an authorized driver.
Under the law, a rental company is supposed to examine the car as you return it, and check it for damage at that time. If your car was left after hours, returned to the company through an automated system, or had to be recovered by the company, the car rental company has ten days to notify you if they’re charging you for damage. Once you get the company’s incident report form, you have 72 hours to ask to inspect the car.
Types of Insurance
The rental car company will try to sell you multiple types of insurance when you get to the counter. Collision damage waiver, liability, accident insurance and protection for your personal effects in the car can all be offered. No one piece is required, and the company can’t refuse to rent to you if you decline any of them. The whole bunch will usually cost you up to $30 a day. On ordinary cars the collision damage waiver cap is $9 a day for cars under 20 grand retail, 12 bucks if it’s 20 to 35, fifteen a day for pricier models. Beware, it’s voided if you’re reckless or let an unauthorized driver drive your rental. The daily price limit on collision damage waiver doesn’t apply to cars with a sticker price of more than $50,000. Most exotic cars are, though fair market value still limits the charges.
Before paying for the collision waiver, call your insurer and card company. A New York auto policy automatically includes rental damage coverage, unless you specifically asked to exclude it. Some cards skip luxury cars, so before you drive off the lot find out if yours covers damage to rental cars and if it excludes certain kinds of cars.
Supplemental liability (about $10.95 a day) usually gives $1 million coverage, far above the state minimum the company must include. In fact, the minimum coverage is low; it’s just $25,000 for bodily injury to one person, $50,000 for all injuries in a single accident and $10,000 for all property damage in a single accident. You may already have this on your auto insurance policy, so you can decline. It may make sense if you have no auto policy or want more coverage than you carry. Avoid being charged twice for the same benefit. Personal accident insurance (about $3 a day) and personal effects coverage (about $2 a day) can duplicate your health, life, homeowner’s or tenant’s policies. The rental counter may also offer to give you an E-ZPass or GPS and charge you each day for them, too. There’s nothing wrong with paying for that, if you need them and have agreed to pay the daily price.
A Company Isn’t Following the Law
If a company breaks any of these laws about renting cars, contract clauses that conflict with the law are void. Plus, a court may decide to fine the car rental company $500 to $1,000 for each violation. The state Attorney General can also seek a court order to stop the company from doing it again and to get money for victims. In 2016, the Attorney General settled with Zipcar, a car-sharing company that had about 5,000 members charged damage fees before telling them or letting them dispute the charges. Zipcar agreed to refund disputed damage charges, pay $35,000 to the Attorney General, and not to charge for damage unless the customer accepts liability or a court finds them responsible.
Before you sign the rental agreement, know what you’re agreeing to. Watch for a damage hold clause. If one is in the agreement, it is void. If you can, be there when the car is inspected after you return it. If you think a company isn’t following the law, reach out to the state attorney general’s office to see how best to fight back.
