Should you purchase excess reduction?

What is “excess”?

The excess — also known as Rental Vehicle Excess, Damage Liability Fee, and Damage Recovery Fee — is the maximum amount due, by you, in the event of damage to your hire car. This could be damage due to a major car accident, or something lesser, like another driver reversing their car into your hire car in a parking are — or you reversing into their car. In essence, it refers to the cost of any damage to the vehicle while rented by you, and it caps the maximum amount you may be charged for the damage. While the exact excess depends on the supplier, rental location, and type of vehicle, for a standard car the excess is typically between $4,500 and $8,000, with luxury cars and 4WDs having higher excesses.

What this means is if your hire car has an excess of $5,000, you will be charged for any damage to the vehicle below this amount — regardless of if the damage was your fault or not. If the damage will cost more than $5,000 to fix, you are responsible for the first $5,000 and the rental company will cover the rest.

What is excess reduction?

Reducing your excess is not compulsory in Australia, rather it is an optional extra. Without excess reduction, you will have no further option than to pay the full amount of the damage up to the excess amount. Car rental companies offer excess reduction products, which customers can purchase directly at the counter. These products can reduce the amount of money a customer will be liable to pay in the event of any damage. When you have decided on the supplier and chosen a vehicle, details specific to your hire car are displayed in the “Important Information” section in the VroomVroomVroom booking flow.

Is insurance included in the rate?

All hire cars rented through VroomVroomVroom come with full insurance — with the above-outlined excess built in. In the event that there is damage to the vehicle, the supplier will charge up to the Damage Excess fee on the contract regardless of your own personal cover – you would then follow up your own claim. Note that Excess Reduction will be explained in full when the vehicle is collected by the rental representative, as the contract is signed accepting or declining their Damage Fee Reductions. Your personal insurance circumstance is not taken into account until you make a claim with them and it is processed. Learn more about Car Hire Excess Insurance in Australia.

How can you reduce your excess when hiring a rental car?

There are a number of ways to reduce your excess when hiring a rental car in Australia. These include:

Rental vehicle excess insurance

Prosura was specifically created to provide cover for the rental vehicle excess. The product provides comprehensive cover if the vehicle is damaged or stolen while in your possession and includes coverage for common damage exclusions including roadside assistance, misfueling, single vehicle accidents, windscreen and tyre damage, underbody, overhead damage and lost keys.

The insurance is independent to the car rental companies and can be purchased online any time before you collect your car (it is not available at the rental counter though). It is reimbursement insurance and works the same way as travel insurance. First of all the car repair / damage cost will be charged to your credit card then you would lodge a claim with Prosura for reimbursement of up to $10,000.

Coverage is available for drivers of all residencies travelling within Australia and also for Australian residents travelling globally. The full Terms and Conditions for Prosura are here.

Excess reduction

Excess reduction products are optional, not compulsory and are offered for sale by the car rental company representatives at the counter when you collect your hire car.

Excess reduction is a fee charged by car rental companies to reduce or remove your excess when hiring a rental car. The products are company specific and each car rental company offers two or three different levels of cover. Each product has different inclusions and exclusions so it’s important to check the specifics when considering your protection options.

For example, the basic excess reduction coverage offered may reduce your excess (financial liability) from $4,000 to $1,500 however it may exclude windscreen, tyre, underbody or overhead damage. What this means is that if the vehicle is damaged or stolen while in your possession and the cause of damage is included in your chosen excess reduction product, you would be out of pocket for expenses up to $1,500 instead of $4,000. However if the cause of vehicle damage is as a result of one of your chosen excess reduction product exclusions then you would be liable for the full damage repair cost even if it is above $1,500 (damage from an excluded cause commonly voids any benefit being derived from your chosen excess reduction product).

The benefit of excess reduction products is that any benefit that you receive is applied straight away and you do not have to wait for reimbursement. It’s important to check what is and is not excluded when considering your coverage options.

Travel Insurance (complimentary credit card travel insurance or specific journey/annual multi trip policy)

Travel insurance products often have a component of rental vehicle excess coverage however it’s important to understand what is and is not included in such policies. Commonly the rental vehicle excess benefits include the rental vehicle excess only and not the excess exclusions set by the car rental companies.