Loss of Use Car Rental & Diminished Value

There is potentially a lot more to the term loss of use when it comes to your car rental agreement and your legal obligations in the event of an incident. This makes accepting and adding cover for loss of use car rental and diminished value very important when renting a vehicle. Such cover is not only important, it’s affordable too.

 

Beware the Hidden Snares with Loss of Use Car Contracts

 

Take, for example, an incident involving your rental vehicle, which is not necessarily your fault. Blame for damage to your rental vehicle may even rest with a third party who may have been entirely responsible. Unfortunately, that cuts no slack with the car rental company from which you hired the car, because they are going to claim more than their pound of flesh.

 

What Loss of Use Means

 

In the car rental sector loss of use refers to the time the car is out of use - as in off the road - while undergoing repairs to make it roadworthy. This period out of action denies the car rental company potential income from other users. This, as a direct result of a road incident rendering their vehicle temporarily unusable.

 

Don’t Be Caught Short

 

The rental car company then elects to bill you the amount of money it claims you owe as compensation for loss of use of the vehicle, even though it may not have actually suffered real financial loss. This is why it is so important to have adequate loss of use insurance in place when driving a rental vehicle. It is pointless trying to recover after the event owing to the self-insure nature of car rental operators.

 

What about Diminished Value?

 

Diminished value is the calculation of how much less money the damaged car would be worth if the car rental company were to dispose of it because of the accident. The loss in value can arise from inadequate repairs, and/or incomplete restoration of the vehicle. It could be mismatched body paint, for example or simply that the vehicle’s logbook is now tarnished.

 

Always Read the Small Print on Your Contract

 

Car rental depots are notoriously busy gateways with everyone keen to hit the ground running. Never be in too much of a rush when it comes to understanding the rental agreement contract you are about to sign. Ask for an explanation if you do not understand something, and always read the small print

It pays to have all bases covered when collecting your car rental. Know and understand your legal obligations, and avoid skimping on insurance, particularly loss of use car rental and diminished value cover.

 

Image: Accident with Two Cars: Orangesky3 BY CC 2.0