Car rental |
Any business leasing vehicles should ensure that it provides all customers with upfront and accurate information so they can make informed decisions about the service.
Legislation
Several provisions of the Competition and Consumer Act 2010 affect the way you conduct your rental car business, and you should keep these in mind when designing both your advertising and your business management practices.
Conduct outlawed by legislation includes:
- misleading or deceptive conduct
- unconscionable conduct
- false or misleading representation
- cash price to be stated in certain circumstances
- certain misleading conduct in relation to services
- bait advertising
- unfair contract terms
- accepting payment without intending or being able to supply the product or service.
Contracts
The following are some tips to help make your interactions with customers, including the contract, fairer and easier to understand:
- use plain English, rather than legal jargon, in your contracts
- clauses should be upfront and easy to understand
- make sure your sales staff alert customers to the important contract terms and conditions
- place your contract terms and conditions on your website to provide customers with an opportunity to familiarise themselves with it before they sign
- liability for damage should always be made clear to customers and any gaps in coverage should be disclosed
- it is good practise to ensure that your pre- and post-rental inspection procedures are clearly explained and accessible to customers
- ensure customers are aware of their potential liability for damage to the vehicle, including the length of time after the rental that the damage costs can be charged, and that their credit card may be debited for the cost of any repairs to the vehicle
- the process for complaints and disputes should be clearly communicated to customers
- optional extras, hidden fees and additional fees and charges must be disclosed to your customers. Additional fees in some circumstances may not be truly optional and must be identified to a customer
- failing to communicate the imposition of a fee could risk misleading consumers.
Dealing with customers
Some customers may be deemed more vulnerable than others and you should be particularly conscious in your dealings with:
- customers who are disabled in some way
- customers age, health or social situation
- customers who may have difficulty understanding your advertising or contract terms and conditions
- customers with limited vehicle hire alternatives (due to factors such as remote location or socioeconomic disadvantage)
- customers who do not speak or read English as their first language.
When dealing with customers:
- make sure you provide full and frank disclosure
- ensure your customers understand the agreement and all other relevant documents associated with the vehicle hire
- avoid high pressure sales tactics
- provide your staff with training and awareness
- provide consistent messages in all areas of your business, including your website, advertising, call centre and care rental contracts
- the service you provide must be carried out with due care and skill
- ensure the vehicle is suitable to the customers needs and is fit for the purpose
- ensure the fleet vehicles are in good condition.
After sales service:
- be open and accessible to your customers
- have in place an effective complaints handling system
- be willing to negotiate with your customers
Advertising
You need to ensure that your advertising and marketing techniques are not misleading or deceptive. For more information see Advertising and marketing.
Advertising mistakes often made by the rental car industry include:
- using disclaimers and fine print in advertising
- bait advertising
- component pricing.
Disclaimers and fine print
Banner or headline daily rates are often used in the car rental industry to attract customers with price. However, terms and conditions associated with obtaining daily rates should be clearly stated.
Advertising may use an asterisk (*) ´conditions apply´ or other terms to limit the expectation of the audience. The main selling point used for a product or service may make a strong impact, while a fine print disclaimer may be overlooked.
It is unacceptable for important facts of the advertisement (the real terms and conditions of the offer) to be unclear or unreadable.
Putting important qualifications in the fine print, may risk breaching the Competition and Consumer Act 2010 and it may result in misleading consumers.
For example, it may be considered misleading if you advertise a daily rate for one of your vehicles of ´$44/day*´, but do not state that to obtain the advertised rate there is a minimum hire period of seven days.
Bait advertising
If you offer a vehicle at a discounted rate, customers must have a reasonable chance of taking up the offer. If there are limited numbers of the advertised vehicle available, or the sale is for a limited period of time, the advertisement must make this clear to the customer.
For example, it may be considered bait advertising if you advertise a discount rate of ´$38/day´ for the hire of a vehicle, and you only have one vehicle available for hire, when you know that you are likely to get multiple enquiries about the discounted vehicle hire.
Component pricing
Where you state part of the price of your service, you must also state a single total price at least as prominently. The single price must be the minimum cost to the customer as you calculate it at the time of advertising.
If a component cost can not be calculated because it will vary between customers, the way the amount will be calculated and the minimum cost should be outlined.
Things to remember when advertising your service:
- consider your audience
- use plain English
- do not use any harsh or oppressive terms in your agreements or contracts
- make sure you clearly state all key terms of the agreement
- vehicle rental contract terms or qualification should not be contained in fine print
- if fine print is used an asterisk or some other symbol or descriptor must be used to draw the conditions to the attention of consumers
- the fine print must not alter the impression created in the more prominent advertising
- if a vehicle is advertised at a special rate for a certain period of time there muse be resources available to supply the vehicle to a reasonable number of consumers. If this is not the case consumers must be advised
- all mandatory component costs should be included in the advertised single price
- any optional changes excluded from this total must be truly optional
- the price shown for any optional extra must include all relevant components for which the consumer will be charged
- if a component cost can not be calculated because it will vary between consumers, the way the amount will be calculated and the minimum cost should be outlined.
For example, if you advertise a vehicle hire rate of ´$45/day´, but every customer is also obliged to pay a pick-up fee, you must either include this extra amount in the total or display it as prominently as you display the ´$45/day´ rate.
Last reviewed 01/12/2011 |
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