A New California Law Could Make Your Next Car Rental More Expensive

A New California Law Could Make Your Next Car Rental More Expensive

“The bill had been flying through the process” before the federation and others opposed it, he said. “Even when we tried to engage the author’s office early on, it just became painfully obvious that it was the rental car industry driving the train here.”

As the pandemic caused travel to crater in early 2020, the rental car industry sold off vehicles to make quick cash; Hertz, which was bloated with debt, filed for bankruptcy protection.

But when travel bounced back a year later, prices for rental cars shot up as the agencies were unable to buy enough new vehicles to build back their depleted fleets. Hertz made $600 million in profit in the three months ending in September 2021, and Avis Budget Group made nearly $675 million in profit in that period, a record.

A spokesman for the American Car Rental Association, a lobbying group, said the fees covered the cost of insuring the additional drivers. “The assumption is that if you have different drivers driving the vehicle there’s going to be different risk than if there’s one driver,” Greg Scott, the spokesman, told me.

Sharon Faulkner, the executive director of the association, told Auto Rental News, “This is a great example of what can be accomplished when A.C.R.A. members band together to seek a common legislative goal.”

The updated law also allows companies to double the fee if they find that the car has been driven by an unauthorized driver, and it raises the cap on damage waivers to $25 a day for most smaller cars, up from $11 to $17 depending on the car’s model. That cap will now rise with inflation.

Hertz referred questions to the car rental association, and Calderon declined to comment beyond her statements during the bill’s passage. Avis declined to comment.

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