Best rental car refueling option? You fill it up

NEWARK, N.J.—When renting a car you should: A) Fill it up yourself before returning your vehicle; B) Let the rental car company do it at a per-gallon rate that often far exceeds the price at the retail pump; or C) Buy a full tank from the agency when you pick up the car -- often at or below market prices -- and pay nothing upon return.

If you answered "A" then you've chosen what experts say is the best way to save money in the car-rental process, especially with gas averaging $4 a gallon or more.

At those prices, and perhaps rising, not knowing your rental car company's rules can be costly. And some of the policies are changing.

Beginning July 1, Hertz will cap its refueling fee at $6.99, with gasoline provided at market rate. Currently, Hertz is charging from $6 to $8 a gallon to refill the tank, a spokeswoman said.

While other rental car companies haven't announced similar changes to their refueling policies, consumer advocates say Hertz's move is a step in the right direction.

Although the rental companies say the extra per-gallon cost is a reasonable fee for the refueling convenience, Maryland Attorney General Douglas F. Gansler wasn't so sure after noticing the prices being charged.

"They shouldn't be able to gouge passengers and consumers and businesses," said Gansler, who hopes Hertz's policy will become a national model.

"If you bring a midsize car back close to empty, at the $8 mark, it would be $145 to refill the tank, and $180 for an SUV," Gansler said, noting that expense could be several times the cost of the rental. "That's absurd."

His office began investigating, and after six months reached agreements with major rental companies to keep per-gallon refueling costs at no more than 35 percent to 42 percent above the prevailing price. As a result, that $8 gallon at Baltimore/Washington International Thurgood Marshall Airport became $5.85.

The deal also allows customers to pay a flat fee of no more than $10 to have the agency refill the car at the local per-gallon price.

The agreements, which were announced this month, only apply to vehicles rented in Maryland and were accepted by every major rental company that operates there, including Avis, Budget, Dollar, Hertz and Thrift, Gansler's office said.

St. Louis-based Enterprise and its affiliated companies, Alamo and National, signed on, but had already capped refueling prices at 33 percent above the local average.

Hertz said neither rising gasoline prices nor the Maryland investigation prompted its new refueling policy, which applies to 95 percent of its locations.

"No, it was really us trying to make that portion of the car rental experience more user-friendly," said Paula Rivera, a spokeswoman for Park Ridge, N.J.-based Hertz. "It cuts down on the hassle of, 'I have to return the car and I have to find a place to refill the tank.'"

Lon Anderson, director of public affairs for AAA Midlantic in Washington, said some rental car companies are taking advantage of consumers by charging high fees for refueling.

"It's not a stretch to say that they (the fees) are really outrageous. Certainly unreasonable," Anderson said.

"The question is, 'How much penalty should we pay to fill up the tank because we ran out of time?'" Anderson asked. If a car needs 10 gallons, and the driver is paying $4 extra per gallon, that's $40, he said: "That's a big penalty; that's like getting a traffic ticket."

Other rental companies have a different view.

"Frankly, we're not holding a gun to anyone's head and telling them you have to do that. It's a convenience for someone who is in a hurry," said Chris Payne, a spokesman for the Tulsa, Okla.-based company that operates the Dollar and Thrifty rental agencies. "If they want to pay for that pleasure, that's up to them."

The company that operates the Avis and Budget chains is based in Parsippany, N.J., where spokesman John Barrows maintained, "We felt that our prices were reasonable."

Several companies offer drivers the option of buying the full tank at near-market prices, although to make that really pay off, it's best to come back with the car running on fumes.

Many consumers seem to know the best option is to refuel the car yourself, but that's often inconvenient.

"I have to leave myself an extra 30 minutes to hunt down a station and fill up," Michael Corcoran said after returning an Avis vehicle at Newark Liberty International Airport to catch a Dallas flight.

"It really comes down to time. If you're willing to pay a few extra bucks, it's easier to let them do it," said Corcoran, who regularly flies and rents while crisscrossing the country as president of Henley-Putnam University, based in San Jose, Calif.