One product that is gaining popularity is rental car deductible insurance.
Is it worth?
Answer: That’s not really the most important question.
Misunderstood
In fact, the problem lies elsewhere: most consumers do not actually know what they are subscribing to, particularly the actual level of protection. Many of these programs are sold with flyers by distributors, but the restrictions are detailed in the fine print of the contract. Consumers sign a little with their eyes closed.
With some programs, the merchant would collect an amount that represents almost half the premium. The sales incentive is therefore very high.
“I’m not saying these programs are bad: some consumers like them because they give them peace of mind,” said George Iny, director of the Association for the Protection of Motorists (APA). But consumers who complain say they are usually very poorly explained by retailers. »
Two types are available on the market: those directly from the manufacturer and those offered by dealers. According to Mr. Iny, those of the manufacturers would be more advantageous because they are cheaper and it would be easier to make claims.
Because many consumers complain that when reporting damage, especially when returning the vehicle at the end of the contract, surprisingly (!) certain types of damage are not covered, in particular scratches on the body or abrasion of tires.
Some programs also cover damage that costs less than regular auto insurance deductibles, such as: B. Rim damage.
darling
Such protection makes Charles Tanguay, spokesman for the Office for Consumer Protection (OPC), hesitate.
“You have to know what normal wear and tear on a vehicle is,” he says. The dealer often charges fees that he should not have (charged). »
Mr. Tanguay suggests having the vehicle checked by an independent mechanic before returning it to the dealer at the end of the lease.
“Quebecians tend to be overinsured,” he continues. Is it worth paying $1,000 for protection that could in principle be covered by auto insurance offered by an insurer? »
- This type of coverage is paid in addition to the rental of the vehicle. We’re talking about a monthly payment of between $30 and $40. Over 48 months we are approaching $2000. It is very expensive for a product that is very poorly understood by consumers.
- Some dealers simply won’t refund claims if the vehicle rental agreement does not provide for a refund claim.
- At times when the used car price is higher than the residual value of a leased car, it is advantageous to buy the vehicle back at the end of the term. This type of protection is therefore not appropriate, as certain programs will lose you protection if you buy the vehicle back. You haven’t paid anything. But in four years, the used car market in Quebec could have changed…