If you’ve ever hired a car here or abroad you will of not doubt been offered a Collision Damage Waiver (or CDW) to go with your hire.
But what is it? Is it an unnecessary charge on top of your rental or are you even insured without it? – Let me try to take the confusion out of one of the rental industries most contentious charges.
Firstly, you need to know that the CDW is not insurance. No rental company is going to let you drive out of their premises in their shiny car without proper insurance. Fact.
The rental company will have a fully comprehensive insurance policy that covers both them and you in the event of something unfortunate happening whilst you hire. This policy will, like your own policy on your own car, have an excess. The excess is the amount you pay towards the repair costs should you have an accident.
By offering you the CDW the rental company will normally reduce the excess they pass on to you. Crucially this doesn’t reduce their own excess with their insurers. Effectively they are saying that for the extra cost they will take the risk instead of you.
But why would they want the risk instead? The theory is that nobody actually chooses to damage their vehicle and most actually come back unscathed, meaning (hopefully) that they will earn enough from these CDW charges to cover their own costs when someone finally does have an accident. If they sell enough they should have a surplus of cash.
Clear? So next time you are offered the damage waiver you have a simple choice to make – for a bit extra do you let the rental company take the risk or do you take the gamble yourself?
The old banger just cost you a fortune in the garage? Wait, what’s this? A brand new shiny Mercedes for just £199 per month! Where do I sign?
We’ve all seen the adverts on the TV or on social media. For just a small monthly payment you could be the proud keeper of a new car, and one you didn’t ever think you could afford either!
But is it that easy? And what exactly is contract hire anyway?
The world of owning a car has changed quite dramatically over the past decade and these days if you decide its time you owned a new car the options are almost limitless. HP, PCP, Contract Hire, Personal Lease – just what do they all mean?
Really it’s quite simple. The first thing to decide is what your budget is and how often you use your car. Your annual mileage is crucial as it will have a massive effect on the cost if you decide to lease rather than buy. Then you need to consider what you need the vehicle for and in particular is it for you or your business?
Then it’s a matter of how much deposit. Don’t be fooled by the big headline monthly figure, there is always a deposit to be paid up front.
After that you need to give some thought to what you want to do with the vehicle at the end of your term. Simply hand it back and consider your next move? Or would you rather own it outright and run it for a few more years with no more ongoing monthly payments?
Put simply, the main forms of vehicle finance you will see advertised are the following:
- Hire Purchase (HP) – you buy the vehicle out right and at the end of the term you own it
- Personal Contract Purchase/Plan – you buy most of the vehicle and at the end pay a pre-agreed fixed amount to complete the purchase or hand it back to the dealer. This should mean a smaller monthly outgoing but a balloon payment at the end
- Contract Hire / Lease – these are effectively different versions of the same thing, depending if it’s for you or your business you rent a vehicle for a period of time with an agreed annual mileage allowance. At the end the vehicle is given back
Still confused? Our advice is simple – talk to a broker. Someone like us! We can give you honest and impartial advice to help you decide what the best deal is for you and your circumstances.
I guess what we are really trying to say is that its individual and there is no right or wrong solution. Its really a matter of what suits you best. Either that or just stick with the old banger. Its bound to be fine for a while now, isn’t it?
3 + 35 payment profile, just £197.31 per month (+ vat) with a £1183.86 (+ vat) deposit
If you like an SUV then the new Mazda is one of the smartest new models around!
9 + 23 payment profile £334.37 per month + vat with a £3009.33 + vat deposit
Catch those last few rays of summer with the awesome new Mercedes C250d Cabriolet.
VW Golf 1.4 TSi
9 + 35 payment profile – £206.75 + vat per month
The ever popular VW Golf with the fantastic 1.4 Litre turbocharged engine.
Delivering both fuel economy and power this latest incarnation of one of the UK’s best sellers is up there with the very best!
3 year contract hire for just £206.75 + vat (9+35 payment profile)<
Give us a call on 01844 291430 to discuss the options.
Hiring a rental vehicle
Hiring a rental vehicle affords the freedom and reliability you need when you are far from home or looking for a replacement car whilst yours is fixed or on order. To ensure that you have the best rental experience possible, and are getting great value for your money, simply follow these top tips.
- Let the hire company know the purpose of your vehicle hire. It may be that you are a family of five looking for a suitable car or an individual with disabilities needing a specialist vehicle. Whatever the case, a reputable hire company will be happy to point you in the right direction.
- Take the damage waiver. It is a common thought that damage waivers are a ploy to get extra money out of the customer, but it’s the rental company taking the risk if you damage the vehicle. Loss and collisions are covered by this and could save you hundreds of pounds if the worst was to happen.
- Check the vehicle thoroughly. It is your licence on the line if the vehicle has any defects when you return it, so pay particular attention to and report any defects you notice such as damage to the lights, registration plates, tyre pressure and cracks in the windows. Rental companies prefer you to be thorough when checking for damage as it will save time and arguments when you return the vehicle. You don’t want the blame for something that you haven’t done so speak up if you find anything wrong with the vehicle before leaving the rental premises.
- Check what the rate includes – what seems like a desirable cheap quote may be missing insurance or VAT inclusion prices. Price comparison sites allow you to search for the best prices for renting vehicles but it is important to read the terms and conditions closely as to avoid any unexpected bills.
- Check the fuel policies – At 3B we run full to full which is the least confusing and honest way of fueling the cars. You will pick up the car with a full tank of fuel and are expected to drop it back in the same condition. However, there are many different fuel policies that companies might use. Pre-purchase, for example, means that you pay for the tank of fuel before you pick the car up. In this scenario, dropping the car back to the rental company with as little fuel as possible left in the tank ensures that you have got the most out of your money! A pre-purchase with a refund policy will pay you back for any petrol that you did not use when you return the vehicle.
So to recap, it’s important to be aware of the terms and conditions that accompany the hiring of a vehicle. Make sure you understand the expectation of refueling and maintenance of the vehicle, and inspect the car thoroughly for any damages before you drive away. Following these tips will afford you a stress-free and straightforward rental experience.
Call 01844 291430
Seat Leon 1.6 TDI SE Auto
6 + 35 payment profile – £265.00 + vat
Mercedes A Class A160 AMG
6 + 23 payment profile – £237.47 + vat per month
Ford Transit Custom 270
reverse sensors – 6 + 35 payment profile – £323.00 + vat per month