Rules for car rental businesses

If you rent or lease vehicles to customers you must obey the Australian Consumer Law (ACL). You need to know the rules when designing your:

• advertising
• business management practices.

You can not:

• mislead or deceive
• make false or misleading representations
• bait advertise
• use unfair contract terms
• accept payment without intending to supply
• behave unconscionably.

Advertising

You need to make sure that your advertising and marketing techniques do not mislead or deceive.

You should always:

• think about your audience
• use plain English
• clearly state all key terms of the agreement
• make sure rental contract terms or qualifications are clear and not only written in fine print.

Advertising mistakes often made by rental car businesses include:

• using disclaimers and fine print in advertising
• bait advertising
• component pricing.

Disclaimers and fine print

You may use daily rates to attract customers with price.

However, you must clearly state terms and conditions that are associated with getting the daily rate.

If you use fine print, make sure:

• an asterisk or some other symbol or descriptor is used to refer consumers to the conditions
• the fine print does not alter the impression created in the more prominent advertising.

The important facts of the advertisement (the real terms and conditions) must be made:

• clear
• readable.

If you are not clear, you might:

• mislead consumers
• breach the ACL and face a possible fine.

For example

It could be misleading if you:

• advertise a daily rate for a car of $44/day*
• do not state there is a minimum hire period of seven days to get this rate.

Read more about misleading and deceptive conduct.

Bait advertising

If you offer a vehicle at a discounted rate, customers must have a reasonable chance of taking up the offer.

You must make it clear in the advertisement, if:

• there is a limited number of the advertised vehicle available
• the sale is for a limited period of time.

For example:

It could be bait advertising if you:

• advertise a discount rate of $38/day
• only have one vehicle available for hire
• are aware that you are likely to get multiple enquiries about the discounted rate.

Pricing

Where you give part of the price of your service, you must also give a single total price that is just as clear. The single price must be the minimum cost to the customer as you calculate it at the time of advertising.

If a component cost can not be calculated because it will vary between customers, you should explain:

• the way the amount will be calculated
• the minimum cost.

When advertising your service remember that:

• all compulsory component costs must be included in the advertised single price
• any optional changes excluded from this total must be truly optional
• the price shown for any optional extra must include all relevant components for which the consumer will be charged.

For example

• You advertise a vehicle hire rate of $45/day, but every customer must pay a pick-up fee. You must either:
• include this extra amount in the total
  or
• display it as prominently as you display the $45/day rate.

If you do not communicate a required fee, you could be misleading consumers.

Read more about component pricing.

Accepting payment

You cannot accept payment for goods or services if you:

• do not intend to supply them
• intend to supply materially different goods or services.

Contracts

We recommend that in your contracts, you:

• use plain English, not legal jargon
• have clauses that are upfront and easy to understand
• make sure you do not include any unfair contract terms
• make sure your sales staff point out to customers the important contract terms and conditions
• put your contract terms and conditions on your website. This gives customers a chance to read them before they sign.

Read more about unfair contract terms.

Damages

Make sure customers know about their potential liability for damage to the vehicle. This includes:

• explaining damage liability to customers
• telling them about any gaps in coverage
• the length of time after the rental that the damage costs can be charged
• that their credit card may be debited for the cost of any repairs to the vehicle.

Make sure that your pre- and post-rental inspection procedures:

• are clearly explained
• are available to customers.

Dealing with customers

Some customers may be considered more vulnerable than others. You should be particularly conscious when you deal with customers:

• who are disabled in some way
• of differing ages, health or social situation
• who may have difficulty understanding your advertising or contract terms and conditions
• with limited vehicle hire alternatives (for example, remote location or other disadvantage)
• who do not speak or read English as their first language.

When dealing with customers, make sure:

• you give full and frank disclosure
• they understand the contracts and any other documents you give them
• your staff are trained and aware
• you and your staff avoid high pressure sales tactics
• you have consistent messages in all areas of your business (includes your website, advertising, call centre and car rental contracts)
• your service is carried out with due care and skill
• the vehicle is suitable to the customers needs and is fit for the purpose
• the fleet vehicles are in good condition.

Think about your after sales service and ensure that you:

• are open and accessible to your customers
• have an effective complaints handling system
• tell your customers about your complaint handling process
• are willing to negotiate with your customers.