Would You Pay $3-$4/L At The Pump? Some Aussies Have Paid It!
It has been reported that people have been charged in Australia as much as $3.50 to $4.00 a litre for petrol. At that rate, it is well above the market price charged by every gas station in Australia. Charging in excess of market rates for petrol is common overseas where rates are charged at double the cost of what you would pay at the pump from a service station but little do people realise that practice of how car hire companies work out refuelling costs let alone know that the very same practice that is common in countries such as Spain occurs right here in Australia as well.
Hiring a vehicle can be frustrating, aside from the hidden fees and excess charges and the mucking around booking a vehicle for hire. There is a growing issue as to fuel costs being paid that makes it’s way over the years into the media and then dies down, that is, fuel charging policies known as the “full to empty” policy. In fact, if you look at the table below there are around five different charging models that car rental companies use to charge you (or overcharge you) for the fuel in the vehicle.
Let’s look at the full to empty policy
Put simply, the full-to-empty policy requires car hire customers to receive their car with a full tank of petrol – which the customer pays for, of course, often at a more expensive rate than the regular price at the pumps – and then return the car empty. This is fine for renters who plan to use their cars a lot, or drive long distances, but if you’re not planning on doing a lot of driving, or only renting the car for a short time, this policy basically means that if you haven’t used up that tank, you’ve just given a bunch of petrol for the car hire company. This often costs customers money, makes them feel “ripped off”, and is one of the biggest complaints and gripes that people have about care hire companies.
The full-to-empty policy is particularly rampant among car hire companies in Europe, especially Spain, where in recent years it’s become harder to find an agency that does not insist on this practice. Tourists in Europe reported for example:
holidaymakers often have to pay an inflated price for the tank of petrol. Some are reporting being asked to hand over €90 (£77) to cover a tank of petrol on a small car, which if bought at a local garage would cost only €50 (£43). source.
Here are the common policies used by Global car hire companies when it comes to fuel:
The companies will generally work with five different fuel pricing policies. There’s more information on the website at rentalcars.com (we are not affiliated with rentalcars.com by the way).
|Policy Name||Policy Description|
|Full to Full||No surprises
The petrol tank will be full or part-full when you pick your car up. Just replace the fuel you’ve used before you drop your car off and you’ll pay no fuel fees at all.
|Pre-Purchase||Pay for convenience
You’ll pay for the petrol in the tank when you pick the car up. Try to drop the car off as empty as possible, as the car hire company won’t refund you for unused fuel.
|Pre-Purchase (Refunds)||All about flexibility
Pay for the petrol that’s in the tank when you pick your car up. You’ll get a refund for any fuel you don’t use.
|Pre-Purchase (Partial refunds)||Flexibility – at a price
When you pick your car up, you’ll pay for the fuel in the tank — and pay a non-refundable service charge to cover the car hire company’s refuelling expenses. You’ll get a refund for any petrol that you don’t use.
Included in the rental price
When it comes to car hire company petrol charging what is happening in Australia?
Choice Magazine did an interesting piece titled “Car Hire Petrol Costs A Bit Rich” on April 2016 which stated, “Car hire companies generally won’t disclose their petrol prices until you actually hire a car”.
Choice surveyed airport car hire companies namely Avis and Hertz at Sydney and Melbourne airports. The results were startling – Sydney Airport: Hertz: Wouldn’t tell us but acknowledged that “you will be charged at a higher rate”. Avis: Wouldn’t give us an exact rate unless we hired a car and had a booking number, but admitted it would be between $3 and $4 per litre. When Choice rang Melbourne Airport – Hertz: $4 per litre at all locations in Melbourne and Avis said it charged $3.70 per litre at the airport (at the time when the Choice article was written).
So what do to? What should a prospective customer who knows that he or she isn’t going to use a full tank of petrol while they are hiring a car do to try and counter an expensive and wasteful policy like full-to-empty policy? Well firstly, they should look around a little more. When researching a car hire company, a prospective customer should make doubly sure to check if the company offers instead – or as an alternative – a full-to-full policy. This is the traditional policy that almost everyone used to have back before companies realised that they could squeeze a little extra out of people with full-to-empty. Basically, full-to-full allows the customer to pay for the petrol that they use during the duration of their car hire and no more. Many companies do offer the full-to-full policy, but few will advertise the fact that they do, and sometimes the cost of the rental will be a little higher with that policy rather than with full-to-empty.
The thing to do is to try to determine whether the cost difference (if applicable) between hiring a car under full-to-full compared to full-to-empty is worth it. That’s often difficult to determine if the customer doesn’t have a solid idea of exactly how much they’ll be using the car. But in any case, it’s worth noting that when a company posts super cheap “deals” for the public, most of the time those deals will be under full-to-empty in the hope that they can make up for the low rate with some petrol at the customers expense.
Knowledge is power and so it’s always prudent to check the terms and conditions to see exactly what the fuel policy is in order to avoid any surprises once you’ve handed your credit card over. A number of consumer magazines and websites are also, over the last couple of years, taking an interest in this policy on behalf of their readers, and they are pointing out directly what car hire companies are using what policy. It’s worth checking Money Magazine or Holiday Autos as these two have been particularly good at naming and shaming full-to-empty car hire companies. Also, checking review sites such as Yelp or TripAdvisor will also give the prospective customer previous customer’s experiences, and if a car hire company is charging people for excess fuel, they will write about that.
The other issue about this policy is just the unfairness of the fact that even when a customer returns a car with unused petrol that they’ve paid for, oftentimes that petrol was bought at a premium. As touched on earlier, when a customer is hiring their car, they are often charged for that full tank at a higher price than if they’d just filled the car up themselves after driving it off the agencies lot. In Australia, it was noted in a 2013 study from ChoiceCom.au, an Australian consumer rights website, that some car hire agencies were charging up to 300 percent more to their customers than the average price on any given day.
Again, customers who will use their car a lot – or at least use a full tank and have to fill up again – are less likely to feel as aggrieved about fuel costs and the full-to-empty policy as customers who hire for a short time or don’t use a full tank. For the light users, again it can only be reiterated that reading the terms and conditions fully, as well as consumer reviews is the best way to protect themselves against “rip-off behaviour” from the car hire companies.
The Guardian also lists a number of car hire ripoffs if you need to do some further reading on this subject.
Looking for a hire car in Adelaide? Read our article here about car hire from Adelaide Airport. You might find these other articles on vehicle hire interesting such as the one on camper vans and vehicles from one dollar per day or campers from Perth. In another article, we looked at the booming backpacker market and the demand for campers. If you are flying into Melbourne and looking to hire a car from Avalon airport then check out this article. In our article on car sharing, you will find great deals on car rental from Melbourne or Brisbane airports. CarHood, the website, for example, has some really cheap vehicles such as a Ford Focus for hire for $19 per day (total) from our searches.
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