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Why You Shouldn’t Use Your Airmiles For Car Rentals!

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I have to give credit to my dad for thinking this one through...

When spending your hard earned air miles don't use them for a car rental! Here's why!

When renting a car you have to pay for two things: the car rental and insurance. You don't 'have' to get the insurance but it's definitely the 'smart' thing to do otherwise if there is an accident you will be paying for it out of your pocket. Sometimes this insurance can cost more than the car rental itself!

However, some credit cards (like this one) have an added bonus of car rental collision insurance as part of the credit card. For example: the Platinum American Express Airmiles Credit card states as part of their promoional package that "Car Rental Theft and Damage Insurance" is included!

When renting a car with your airmiles you can't use your credit card to cover the collision insurance. This is because you need to book and pay with your credit card for it to be valid. Therefore, if you're booking with your airmiles you have to pay for the insurance out of your pocket. However, if you would book (and pay) with your credit card you only pay for the car rental. Often these two will be the same price (if not more for the insurance).

For Example: Renting a car in Vancouver for a week in October will cost you $292.02 (after taxes). The insurance will cost approximately $24.95/day. This works out to $175 in insurance costs! So if you were booking with airmiles it would cost you the air miles PLUS $175!!! If you simply rented with your platinum credit card it'll cost you $292 and not the $175!

Note 1: The liability insurance is usually covered by your own car insurance. Be sure to check with your insurance provider on this prior to renting the car.

Note 2: I find travelocity.ca to be the best place for booking car rentals as they make a cool table with all the car prices and dealers.

*** note: I'm not an expert on insurance and/or credit card fine print..... Take the advice above as a guideline and do your own do diligence when dealing with scary things like insurance.

Comments

You can get an endorsement added to your personal auto insurance that will cost approx $25-$75 a year that will add on the physical damage insurance coverage for rental vehicles. So, if you rent a vehicle even once during the year, you are saving money. Ask your insurance broker about it, you may already have this coverage and not know about it.

Hi Nancy, Thanks for sharing the great tip!

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