car rental Ernesto Suarez


CEO OF HALO INSURANCE AND icarhireinsurance.com


Themoment of truth


The chosen niches of various insurance specialists often bring them into close association with the industries they relate to. And it’s natural to want to keep watchful eye on the relevant industry’s consumer relations. Ernesto Suarez offers a strong message to the car rental industry to improve its customer experience, especially as we approach the busiest period in holiday travel


n late February 2011, the OFT published its 116-page report on the results of its investigation into consumer car rental contracts. The industry came off pretty well, with the OFT concluding it is an industry which generally services its customers well. The contracts are generally held to be fair, yet there are situations in the booking and collection process which customers find hard to understand.


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The investigation looked at several aspects of the car rental market’s consumer contracts and how these operate. “Car rental as a rule does not hide nasty surprises in the small print of contracts” says the report. Unsurprisingly, this quote can be found widely repeated and reproduced by car rental companies, alongside quotes of the response by John Lewis, chief executive of the British Vehicle Rental & Leasing Association (BVRLA) who states “[This review] confirms that there were no major failings to justify OFT action against the UK car rental sector”. A slam-dunk for the industry, and a clean bill of health?


What John Lewis went on to 12 insurancepeople JULY/AUGUST 2011


say though is, “However, it is vital that the industry continues to raise the bar and deliver a first class service.” This perhaps is an indication of some points that the OFT did identify in their report where the industry in general could improve its service to customers.


The investigation compared consumer contracts across various industries, and whilst the car rental industry came off better than many others, particularly in relation to the percentage of complaints it generated, the investigation highlighted several areas with opportunity for improvement:- ● Whether customers had adequate opportunity to read contracts and understand the implications


● The visibility of additional charges


● Whether customers


understood the implications of waivers and pre-


authorisations on their credit cards


Let’s look at this last one in more detail - the implications of waivers and pre-authorisations. This is a worrying area. The investigation found that many car


rental websites did not make it clear that the customer would be required to make a credit card available for pre-authorisation prior to taking the vehicle. For most customers the first time they were made aware of this was when they turned up to collect the car. The study highlighted the environment usually found at this point in the process. Customers would be tired from previous journeys.


They might be keen to start their holidays, and many voiced the impression of being time pressured by rental staff. Here are some quotes about credit card pre-authorisation from the OFT case study:-


“There was evidence that consumers could not, despite their best efforts, assess the full implications of waivers or credit card pre-authorisations”


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