Tom Thayer believes in full disclosure. Thayer’s company, Allstate Auto Rentals in Baltimore, Md., displays a sign at the front counter and on stickers in the vehicles that state his company’s rental vehicles may be tracked using a Global Positioning System (GPS).

“Full disclosure hasn’t hampered us,” Thayer says. “If people don’t want to be tracked, guess what? They don’t rent from us.”

Two signs at Allstate Auto Rentals clearly state company policy. One states that "vehicles may be tracked with GPS." The other clearly defines travel boundaries and fees for violating them. Thayer uses his GPS tracking system to monitor a "geofence" around his approved travel area.

Two signs at Allstate Auto Rentals clearly state company policy. One states that "vehicles may be tracked with GPS." The other clearly defines travel boundaries and fees for violating them. Thayer uses his GPS tracking system to monitor a "geofence" around his approved travel area.

Although auto rental agencies have used GPS tracking systems for years, issues involving their use can still cause challenges for operators.

Disclosure is only one issue. Some rental companies assess penalties when the GPS system finds that the renter violated the terms of the rental contract. Recovery is another: Although the operator has every legal right to recover a vehicle from a driver who is not abiding by the rental contract, the act of actually recovering the vehicle can bring additional challenges.

To Disclose, or Not?
Phil Mooar, a Dollar Thrifty franchisee in Buffalo, N.Y., is another advocate of disclosure. Like Allstate Auto Rentals, Mooar posts signs at the front counter and inside the vehicles stating that the vehicles contain GPS units. “I’d rather have them know, and that if they do something, we’ll know where they are,” he says.

A sign at the front desk of City Auto Rental in Cleveland, Ohio reads “Car Rental Special. If you rent a car and give the keys to someone who is not on the rental contract, they will receive a free room downtown courtesy of the local police.” Owner Matt Rawlings says the sign has caused some customers to leave because they did not want to be tracked by GPS.

However, some companies don’t disclose it at all. Dustin Valenti, a Dollar Thrifty franchisee who serves the central areas of New Jersey and Albany, N.Y.,  doesn’t mention the tracking units to customers, although he believes disclosure might be required by law eventually. “My concern is if you tell the customer they may be tracked, they may try to pull the car apart to locate the device,” Valenti says.

While an auto rental company might worry about some customers trying to find and tamper with the GPS device, Thayer maintains that this has yet to surface as an issue for his company. “Surprisingly, in the seven years we’ve had GPS trackers, we have had zero units disappear from the vehicles,” he says.

[PAGEBREAK]Contact and Disable
When a renter breaches the rental contract, grounds for recovery include unauthorized use, violation of geographic restrictions or simply neglecting to return the car at the end of the contract.

“[Unauthorized users] are the ones who don’t bring the cars back on time; they smoke in them, trash them and drive excessive miles,” says Rawlings of City Auto Rental.  When Rawlings suspects unauthorized use, he or his employees compare where the customer lives and works to the actual location of the car. “If we don’t see the car at those two addresses, we know they’re not the one driving it all the time,” Rawlings says.

The first step to recovering the car is to contact the renter as soon as a problem arises and then locate it. “If the vehicle is due at 11 a.m., we’ll ping it at 11:05 a.m.,” Rawlings says. If the renter doesn’t respond, these operators don’t waste time before taking the next step, which is to disable the vehicle.

Al Llanes of Global Rental Car of South Florida Inc. restricts his renters to the state of Florida. He uses his tracking system to set up a virtual perimeter (or “geofence”) that alerts him when the state line is crossed. After disabling the vehicle, Llanes will often receive a call from the customer to complain that the car is inoperable.

“At that point we say, ‘We’ll restart the car for you, but you’re going to be charged for the miles,’” Llanes says. “They’ll say they’re sorry, and you’ll hear a lot of stories, like ‘I didn’t read the contract.’”

Llanes will offer to negotiate a new contract with the renter, or “recover the vehicle at the renter’s expense,” he says.

Retrieving the Vehicle
“Most of the time they know they got caught, and there’s not a big problem,” Rawlings says. “Not every time. Sometimes they’ll put up a dispute.” He even carries a copy of the vehicle’s title and registration to prove ownership. He stresses that the term “recovery” should be used rather than “repossession” because the auto rental company is retrieving its own property.

Thayer once got into a car he thought was empty, only to find someone in the front seat. The person left after retrieving belongings — of dubious origins, Thayer says — from the trunk. Valenti describes a recovery in which the customer blocked the rental car with another vehicle. “There was a big argument,” Valenti notes. “They said, ‘You can’t take it; I have to work.’”

Some operators employ a service to recover the vehicle, while most recover themselves. Operators generally don’t contact police to help with recoveries. However, Thayer files a criminal complaint before a recovery, so if the police do get involved, they can reference the complaint’s verification number on file.

When a recovery is necessary, operators take safety precautions, such as waiting until the vehicle is on public property and after the renter has left the vehicle area. The rental agency uses the spare key to retrieve the empty vehicle. This avoids confrontations but could hinder the retrieval of the primary key, an added expense. Renters have been known to leave a car running so the vehicle cannot be disabled.

Two operators say they have located vehicles that contained dead bodies. Others have tracked renters in the commission of a crime, such as drug running across the U.S. border, and have reported the activity to the Department of Homeland Security.

GPS also helps operators recover impounded vehicles by using a tracking system’s geofence capabilities, which save on impound fees and lost revenue from the inactive vehicle. “We can get down there, get it out, clean it up and start renting it before we would have gotten a letter from the city of Cleveland,” Rawlings says. 
Do rental car companies penalize drivers with fines when they break the rules?

Fees range from a penalty for every mile driven outside of the contract’s geographic boundaries or in excess of the mileage limit, to overdue charges, to vehicle recovery fees and missing key fees. Rawlings charges $125 for a missing key; Thayer charges $250.

Penalties for boundary violations or mileage limits can rack up pretty quickly, though collection can be difficult. Often, the operator ends up holding the rental deposit.

Thayer went further and sued a customer for the mileage fee for going to Florida. The customer countersued. Thayer brought his signage and contract to court, which clearly state the penalties. The countersuit was dismissed and the customer was ordered to pay the charges.

The operators interviewed for this story, however, draw the line at speed violations. “We can’t. We’re not police,” says Mooar, though he’ll sometimes call the police and tell them where the speeders are.

In one of the few public cases relating to GPS tracking and car rentals, an independent car rental company was sued by a renter in 2001. Acme Rent-A-Car of New Haven, Conn. automatically debited customers’ bank accounts or credit cards $150 for each speeding occurrence exceeding 79 miles per hour that lasted a minimum of two straight minutes.

Though the front page of Acme’s rental agreement included a box for renters to initial regarding tracking and the fee, the Connecticut Consumer Protection Department stepped in to halt the practice and to provide past renters with full restitution. The department contended that the rental company failed to provide renters the opportunity to refute the surcharges and failed to notify renters that the surcharges would be automatically withdrawn. The department also took issue with the fact that the rental agreement provided for a penalty when the company had sustained no damage.

Noah Lehmann-Haupt of Gotham Dream Cars in New York tracks his exotic rentals, but does not remotely disable vehicles or monitor speed. He was legally advised against it to avoid claims of negligence.

“If in one case we tracked a speed but in another ignored it and the latter customer got into an accident,” Lehmann-Haupt says, “someone could claim we should have disabled the car and prevented the speeding.”

While these operators have varying internal policies governing their use, they all agree that in their business, use of a tracking system is essential.