Rental Car Consumer Complaints Increase for 2 Consecutive Years... Excessive Charges for Accident Handling Fees and Penalties

Consumer Agency's Analysis Results on Relief Applications Related to Rental Cars

Status of Rental Car-Related Damage Relief Applications by Type Over the Past 3 Years.

[Asia Economy Reporter Lim Chun-han] It has been revealed that consumer damages related to rental cars have increased, such as excessive charges for handling costs when rental car accidents occur or not receiving a refund of the deposit even after canceling a reservation.

On the 22nd, the Korea Consumer Agency announced that the number of consumer damage relief applications related to rental cars increased for two consecutive years, from 253 cases in 2018 to 276 cases in 2019, and 342 cases in 2020. The most frequently received type of damage relief application was excessive charges related to accidents (40.6%). Last year, due to social distancing measures, contract-related damages such as not refunding deposits or charging excessive penalties when canceling reservations accounted for the largest portion at 43.9%.

The Consumer Agency explained, "Disputes arose because car rental businesses demanded cancellation fees or penalties exceeding the consumer dispute resolution standards," adding, "According to these standards, if a reservation cancellation is notified 24 hours before the start of use, the full deposit can be refunded."

According to a survey conducted by the Consumer Agency from April 28 to May 7 among 524 consumers who had used short-term rental cars within the past year, 9.5% of respondents reported having experienced a rental car accident. Among them, 56% paid a downtime fee due to being unable to operate the vehicle during the repair period. Of these, 60.7% calculated the downtime fee based on the standard rental fee (rental fee according to the market price by vehicle model), 35.7% based it on the normal fee (rental fee without discounts), and 3.6% based it on the actual rental fee. It appears that some rental car businesses charged downtime fees based on standard rental fees or normal fees that were higher than the actual fees.

Regarding the evidence documents consumers want to receive from rental companies in case of an accident, 60.1% of respondents selected repair estimates (documents specifying the cost of parts and labor required before repair), and 38.4% selected repair statements (documents specifying the cost of parts and labor used in the repair). Additionally, 81.1% said that if it is impossible to drive the rental car directly due to bodily injury, etc., allowing substitute driving should be necessary.

The Consumer Agency plans to recommend the Fair Trade Commission to revise the standard terms and conditions to require the provision of repair cost evidence and allow substitute driving, and to advise the rental car industry to charge appropriate penalties and downtime fees.

This content was produced with the assistance of AI translation services.