One product that is growing in popularity is excess wear and tear waiver insurance for rental cars.
Is it worth it?
Answer: That’s not really the most important question.
In fact, the problem lies elsewhere: most consumers do not actually know what they are subscribing to, especially the real extent of the protection. Many of these programs are sold by dealers with flyers, but the restrictions are spelled out in fine print on the contract. Consumers sign for a while with their eyes closed.
For some programs, the dealer would pocket an amount equal to almost half of the premium. The sales incentive is therefore very high.
“I’m not saying these programs are bad: some consumers like them because they have peace of mind,” explains George Iny, director of the Association for the Protection of Motorists (APA). But consumers who complain say they are usually very poorly explained by dealers. »
Two types are available on the market: those directly from manufacturers and those offered by retailers. The manufacturers would, according to Mr. Iny be more advantageous because they are cheaper and it would be easier to make claims.
Because many consumers complain that when they make their claims, especially when they return the vehicle at the end of the contract, surprise (!), certain damages are not covered, especially for body scratches or tire wear.
Some programs also cover damage that costs less than regular car insurance, such as rim damage.
Such protection makes Charles Tanguay, spokesman for the Office of Consumer Protection (OPC), hesitate.
“You have to be well aware of what is normal wear and tear on a vehicle,” he says. Often the dealer charges fees that they shouldn’t have (charged). »
Mr. Tanguay suggests having the vehicle inspected by an independent mechanic before returning it to the dealer at the end of the lease.
“Quebecers tend to be overinsured,” he continues. Is it worth paying $1,000 for protection that can in principle be covered by a car insurance policy offered by an insurance company? »
- This type of coverage is paid in addition to the rental of the vehicle. We are talking about a monthly payment that varies between 30 dollars and 40 dollars. Over 48 months we are approaching 2000 dollars. It is very expensive for a product that is very poorly understood by consumers.
- Some dealers simply do not refund claims if refund requests are not stipulated in the rental agreement.
- In times when the price of used cars is higher than the residual value of a leased car, you can advantageously buy the car back at the end of the lease period. This type of protection is therefore not indicated because for certain programs you lose the protection if you buy the car back. You will have paid for nothing. But in four years, the used car market in Quebec may have changed…