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Vehicle Car Rental Management

A car rental, hire car, or car hire agency is a company that rents automobiles for short periods of time, generally ranging from a few hours to a few weeks. It is often organized with numerous local branches (which allow a user to return a vehicle to a different location), and primarily located near airports or busy city areas and often complemented by a website allowing online reservations.

Car rental agencies primarily serve people who require a temporary vehicle, for example those who do not own their own car, travelers who are out of town, or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. Car rental agencies may also serve the self-moving industry needs, by renting vans or trucks, and in certain markets other types of vehicles such as motorcycles or scooters may also be offered.

Alongside the basic rental of a vehicle, car rental agencies typically also offer extra products such as insurance, global positioning system (GPS) navigation systems, entertainment systems, mobile phones, portable WiFi and child safety seats.

It is typical, when renting a car, to be offered various forms of supplemental insurance and/or damage waivers as an optional extra at additional cost. There are several types of coverage:

  • Loss Damage Waiver (LDW) – covers the cost of damage to the rental vehicle, up to the full value of the vehicle, in the event of an accident. Typically LDW covers 100% of costs without a deductible additional fees. Note that LDW/CDW coverage is not insurance and does not offer the same coverage product as a damage insurance policy.
  • Collision Damage Waiver (CDW) – Generally covers the costs of damage from a moving accident. As the name suggests, non-collision based damage is often not covered. In many cases, in the event of an accident a fee or deductible applies.
  • Supplemental Liability Insurance (SLI) – a product often sold in the USA which provides coverage in the event of an accident causing bodily injury or property damage to someone other than the renter and passengers.
  • Personal Accident Insurance (PAI) – covers medical costs and accidental death for the renter and passengers in the event of an accident during the rental.
  • Personal Effects Coverage (PEC) – insures against risk of loss or damage to the personal belongings of the renter (and sometimes the members of the renter’s family while traveling with the renter) during the period of the rental.
  • Excess Insurance – Collision damage waiver, Theft and Third Party Liability coverage are often included in car rental prices in Europe, Africa, and Australasia. There is almost always an excess on these (also referred to as Super CDW, Non Waiver, or Deductible), which involves an amount of money customers must pay in the event of damage, to discourage drivers from making small claims. A higher excess usually results in a lower upfront insurance cost for customers, but if damage occurs costing less than the excess to repair, then there is little incentive for customers to claim, benefiting the insurer. Excess insurance (also known as excess reduction, or damage liability waiver) is a secondary insurance which covers the cost of that excess in the event of a claim. Car-rental companies in Europe, South America, and Australasia will generally offer this cover as an opt-in secondary insurance, though third party insurance companies also sell excess coverage for hire cars, which may offer greater protections than standard coverage.  

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