California Enacts Vehicle Rental Disclosure Law

California Gov. Arnold Schwarzenegger signed a bill on Aug. 21 that would require auto rental companies to advertise the entire amount of a customer’s bill, except taxes, to include the increased vehicle license fee, any customer facility charge, and any mileage charge. Senate Bill 348, titled “Passenger Vehicle Rentals, Advertising,” was sponsored by State Sen. Dave Cogdill.

The new law, with an effective date of May 21, 2009, also states that if customer facility charges, airport concession fees, or tourism commission assessments are imposed, the auto rental company must provide the customer with a good faith estimate of the rental rate and certain taxes and charges, including the increased vehicle license fee, when the quote is given. The rental companies must “clearly and conspicuously” disclose in the rental contract the total rate and certain taxes and charges, including the increased vehicle license fee at the time of the rental.

The law also states that every three months, a rental company must calculate the daily increased vehicle license recovery fee by prorating at 1/365 of the average increased vehicle license fee for vehicles in each particular class of vehicle being rented, based on the increase in the annual vehicle license fee actually paid during the preceding 12 months for each class of vehicle being rented.

The law requires the rental companies to reconcile the amount of increased vehicle license fees actually paid by the rental company for each class of vehicle and the amount of increased vehicle license recovery fees charged to customers for rental of vehicles in those classes, and to post that information on its Web site. The bill would prohibit the total of all increased vehicle license fees charged to customers by the rental company for each class of vehicle from exceeding the total of increased vehicle license recovery fees actually paid for vehicles in those classes on an annual basis.

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