Car Hire Insurance: Avoiding the Minefield

Jun 23, 2016

Over the years, I’ve had various frustrating episodes involving car hire insurance charges. However, a real low point was on a trip to Florida a few years ago.

We’d booked a deal involving a flight, accommodation, and car hire. As committed “independent” travellers, my wife and I usually book all these things separately. However, this deal was particularly good, and we didn’t really imagine that much could go wrong.

Having been stung for car hire insurance before, we were prepared for a couple of unexpected bolt on charges. But our experience at the car hire desk in Orlando took things to a whole new level. As we stood, tired and jetlagged under the spotlights, the representative explained our various insurance options – all costing a significant number of dollars per day on top of what we’d already paid.

The really shocking thing was how financially liable we would still be in the event of an accident if we chose anything other than the most expensive insurance package. The background thought that a superficial accident could end up costing us thousands of dollars was never going to make for a very relaxing holiday. So, like many people we reluctantly and angrily handed over our credit card – for insurance charges in the region of $500 on top of what we’d already paid for car hire.

Car Hire Insurance

This wasn’t the first time this had happened to us, but it was the most extreme incident. The fact that a pile of cash that had been destined for Florida’s outlet malls had disappeared before we’d even left the airport made us determined not to land ourselves in that position again.

The irony is, it’s actually really easy to protect yourself from the car hire excess racket, by buying a third-party car hire excess waiver policy from a company like ReduceMyExcess.co.uk. These policies can reduce the charges you need to pay to avoid a huge excess by 80% or more, and can be purchased for individual trips, or on an annual basis. If the worst does happen, you can claim from the excess waiver company.

As always, even if you have one of these policies it’s important to truly understand what you are and are not covered for. While there is no doubt that add-on policies are quite a profitable racket for the car hire firms, the fact remains that car insurance itself is quite a complex topic – so never be afraid to ask questions until you completely understand your liability.

That said, having your own excess protection policy is always going to work out cheaper that paying the “captive audience” car hire insurance price when you get to the desk. There’s something wonderfully satisfying about turning down all the costly added extras because you can confidently say that you already have a policy that protects you from a huge bill in the event of an accident. Next time my wife and I are fortunate enough to visit Florida, we’ll definitely make sure we hang onto those 500 bucks for the shopping malls!

Average Speed Cameras Spread Across the Nation

May 31, 2016

If you’ve seemed to notice many more signs warning you about average speed cameras while you’ve been out on your travels lately, you’re definitely not mistaken.

The BBC has revealed that the coverage of average speed cameras on the UK’s roads has doubled in the last three years. The cameras, which calculate your average speed over a stretch of road, rather than catching you out at a specific moment, now cover 263 miles of Britain’s routes. There are 51 permanent average speed camera schemes in place at the time of writing, and plenty more put in place on a temporary basis, often around the site of roadworks.

The largest-scale scheme in place covers a full 99 miles on the A9 in Scotland. At the opposite end of the scale is a scheme covering the length of Tower Bridge in London – a rather scenic drive that people probably don’t object to slowing down for!

The Rise of Average Speed Cameras

The BBC cite various reasons for rise in popularity for average speed cameras. The first is technology. It’s far cheaper to implement an average speed system than it once was. According to the report, the cost was around £1.5 Million per mile back in “the early 2000s.” That cost has now dropped to around £100,000 per mile – still not an insignificant amount, but an amount that one assumes is easily covered by the revenue earned from fines!

Also on the subject of technology, it seems that on some occasions the powers that be are opting to replace old-style speed cameras with average speed cameras. The report reveals the surprising fact that some of these old-fashioned “yellow box” cameras still use traditional 35mm film.

The other factor, which will probably surprise some readers, is that average speed cameras are apparently “better received by motorists” than their old-school equivalents, at least according to the House of Commons’ Transport Committee. We’ll leave you to tell us if you agree with this in the comments section!

Fuel price signs launched on the M5

Mar 31, 2016

New fuel price signs were switched on along the M5 motorway this week, as part of a new government trial to improve petrol price transparency.

Users of the motorway can now use the roadside displays to see the price of fuel at five service stations, without having to leave the motorway. Andrew Jones, the Road Minister, hopes that this will “make it easier (for motorists) to plan their breaks around the cheapest deals.”

The service stations taking part in the scheme are located in Gordano, Sedgemoor Bridgwater, Taunton Deane and Exeter.

Fuel Price Signs – The History

This trial of fuel price signs is a government initiative being funded by The Treasury. It’s being implemented by Highways England on the government’s behalf.

The idea of trialling fuel price signs came up following an OFT study on petrol and diesel prices in 2013. One of the main reasons for the study was to investigate the realities behind the widely-believed “rocket and feather” theory (where fuel prices “rise like a rocket and fall like a feather” in response to oil price changes).

Despite some disappointment from drivers and motoring groups, the OFT study concluded that the fuel market was sufficiently competitive. However, one detail the survey did acknowledge was the heavy disparity between prices within towns, and those at motorway service areas.

It’s undeniable that certain factors can lead to fuel being more expensive at motorway services, including staffing costs and other expenses relating to 24/7 opening. However, fuel at services is often so much more expensive than elsewhere that it’s hard not to assume that these establishments are capitalising on their “captive audience.” That’s certainly the perception of plenty of motorists.

The idea of motorway fuel price signs is to erode this “captive audience” perception, by allowing drivers to make a buying decision before actually leaving the motorway. Hopefully, the eventual outcome of this will also be cheaper and more competitive prices at these service stations.

Fuel Price Signs – The Details

I was pleased to be able to have a discussion with Antony Atkins from Highways England and find out more detail about the new trial scheme. As mentioned above, Highways England are managing this scheme on behalf of the government.

Initially, the trial will last for 18 months. It will then be for the government to decide whether to extend it across the nation’s motorway network. Its success will be measured on four key criteria:

1. Whether safety is maintained for road users and road workers alike.
2. Whether customers (road users) find the system useful.
3. Whether increased transparency results in more competition between the participating stations.
4. How well the technology works, particularly with regard to keeping the signs updated in real-time.

The M5 is a key tourist route, taking millions of people to Devon and Cornwall. Highways England hope that the fuel price signs will provide a useful service for these people, many of whom are unfamiliar with the areas they are passing through. These drivers are therefore less likely to want to leave the motorway to source fuel elsewhere.

This led on to a question we were keen to find out the answer to – whether the scheme could be extended to point people away from the motorway to cheaper “off network” garages. This isn’t within the scope of the trial, as this initiative is about increasing price transparency specifically for motorway services – off the back of the OFT report referred to earlier.

Will the Fuel Price Signs Work for Customers?

Taking a slightly cynical view, it seems probable that there are two likely outcomes following the launch of these signs:

1. Their existence will really stimulate competition, resulting in a price war between the garages which will be great news for motorists.
2. The garages will align their prices so closely that benefits to the motorist will be eroded.

Putting that cynicism aside, we do actually have some evidence that goes beyond supposition, because fuel price signs are already in place in some other European countries, including Italy and Portugal. According to a detailed Bocconi University study, the signs in Italy have pushed prices down to the tune of €0.01 per litre. The corresponding effect on the M5 will be revealed in time, but the 18-month trial period should give the new system plenty of time to settle.

Obviously at PetrolPrices.com, we welcome any move that will improve fuel price transparency. It is a shame that this initiative doesn’t also take into account forecourts away from the motorway, but it’s fair to say the other countries’ schemes don’t do this either. Fortunately, you have our free service to bridge that gap!