Hefty VAT for Car Rentals in Europe

A customer who contracted with CarRentals.com for an auto rental in Croatia was charged more than $170 in additional fees, including a 22 percent value-added-tax (VAT), an airport location fee and an extra rental day, according to Linda Burbank’s travel column in USA Today.

The CarRentals.com Web site clearly states that its prices include "all known rates, taxes, fees, surcharges and applicable drop off charges that you must pay." Its rental quotes list daily rates and estimated taxes and fees separately, with a detailed breakdown of the latter. If you book a car on CarRentals.com, the actual rental-car company will charge you directly.

When Kenneth F. Oehrle booked the reservation with Sixt in Croatia through CarRentals.com, the booking confirmation stated the estimated taxes and fees were zero, but the total charge to his credit card was $171 beyond the original agreement. This should have been a red flag, Burbank says, since VAT is added onto car rentals in most of Europe. It can raise estimated rental costs significantly: Croatia's VAT rate is 22 percent. VAT charged on services such as rental cars or hotel stays isn't refundable, and it's unavoidable.

Sixt had just started working with CarRentals.com. Oehrle’s estimated fees came up empty because Sixt's full fee details had not yet been loaded into CarRentals.com's system, according to site founder and chief technology officer David Morton. Therefore, Sixt cars in Croatia should not have been bookable at that time.

Burbank says Oehrle's credit card company bowed out of the dispute, since his bill was correct even though it went against CarRental.com's full-disclosure policy. CarRentals.com investigated Oehrle's claim and apologized for the glitch, then sent Oehrle a check to cover the undisclosed extra fees.

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