Rental car bond, deposit and excess: what each one is

What's the difference between a deposit, a bond and an excess?

They're three different things, and rental companies don't always use the words the same way, so it's worth pinning down which is which before you book:

• Deposit: money paid when you book to hold the car. At Rentzy it's part of the rent, not an extra charge.
• Bond (sometimes called a security deposit): money held while you have the car to cover anything you might owe at the end, such as fuel, tolls or damage. It's not rent, and what isn't needed comes back.
• Excess: the most you pay towards loss or damage from one incident, in the normal case. It's not paid up front; it only matters if something happens to the car.

Every amount is also on the fees and charges page.

How does the booking deposit work?

An A$100 deposit is paid online when you book. It is part of your rent, not an extra charge. The rest of the first period's rent and the bond are paid at pickup, at the counter. Online booking isn't open yet, so at the moment you request a car first; these payments apply once your booking is made.

The deposit is the part you can lose if plans change late:

• Cancel 48 hours or more before pickup: everything you paid online is refunded.
• Cancel less than 48 hours before pickup: we keep A$100 (the deposit).
• Not collecting the car (a no-show): we keep A$100.

How does the bond work, and when do you get it back?

A refundable A$500 security bond is paid at pickup, separate from your rent. We return it within 7 business days of the return, less any charges allowed by the rental terms.

• Clause 4 of the rental terms says the bond secures what you owe under the agreement and is not a cap on your liability. If charges come to more than the bond, you pay the balance.
• Approved charges are taken from the bond first; the rest comes back by the same method it was paid, unless agreed otherwise (clauses 4 and 10).
• Your bank's processing time is on top of the refund window.

Before you hire anywhere, the ACCC suggests asking in what circumstances the company will charge your credit card, what amounts it can charge, and when the security deposit is refunded.^[1] The national rental car industry guide also tells businesses that ask for a bond to state in writing the circumstances in which it will be forfeited.^[2]

What is the renter's excess, and when isn't it the limit?

At Rentzy, the renter's excess is A$2,500 per incident. Under clause 9 of the rental terms, you're liable for loss of or damage to the car, and for loss to third parties, during the rental up to that amount for each incident. Two incidents mean two excesses.

The excess stops being the limit in some situations. At the time of writing, clause 9 lists these, where you're liable for the full loss:

• breaking the driver rules or the list of things you must not do with the car (clauses 2 and 7.2), including driving under the influence or without a valid licence
• reckless, wilful or criminal conduct
• overhead or underbody damage from driving into an obstacle or on an unsuitable surface, and water damage from driving through water
• using the wrong fuel, and tyre, windscreen or key damage or loss caused by misuse
• not reporting the incident or not cooperating with Rentzy and its insurer, or leaving keys in or near an unattended car

Clause 9 also makes you liable for rent lost while the car is off the road for damage you're responsible for, up to the limit it sets. Read the clause in full before you sign; the rental conditions summarise who can drive and how the car can be used.

This is the point the national rental car industry guide makes to businesses: where the headline excess isn't a true ceiling, that should be made clear.^[2] The ACCC also notes that a hire contract will usually say you're not covered for certain types of damage.^[1]

How are damage charges worked out at Rentzy?

1. At pickup, the car's condition, odometer and fuel are recorded with photos. Check the record and point out any damage it misses before you drive away (clause 6).
2. At the return, the same record is made again.
3. The car is inspected within 48 hours of the return.
4. Any proposed charge (fuel, cleaning beyond normal use, tolls, late return or damage) is itemised and sent to you with the evidence.
5. You have 72 hours to dispute a charge before it's collected; disputed charges are reviewed by the team.
6. Damage is charged up to the excess (A$2,500), or more only where clause 9 allows. Approved charges come out of the bond first.

The FAQs answer the common questions about returns and charges.

What does consumer law say about damage claims?

The Australian Consumer Law applies to car hire, and the ACCC says most consumer guarantees apply when you hire a car, except those related to ownership.^[1] Rentzy's terms say nothing in the agreement excludes rights you have under it (clause 13). In practice, that guidance means:

• You can't be held responsible for damage that was already there. The industry guide says a business can't hold you responsible for pre-existing damage, and that you're entitled to inspect the car against its condition report and note extra damage on it.^[2]
• You can take photos and be there for the inspection. When you return a car, you have the right to photograph its condition and to be present when it's inspected.^[2] The ACCC also suggests asking for written agreement that the car came back undamaged, or, if there was damage, agreeing the costs in writing before you leave.^[1]
• Charges should be itemised first. Before deducting damage from a card, a business should give an itemised bill and a reasonable chance to dispute it.^[2] You can also ask for an itemised bill showing how a price was worked out within 30 days, and the business must give it free within seven days of the request.^[2]
• Unfair terms may not be enforceable. Laws against unfair contract terms in standard form contracts apply to most car hire contracts.^[1] The industry guide gives the example of a contract that lets a business automatically charge the maximum damage amount without working out what the repairs will cost: likely unfair.^[2]

The ACCC takes reports about businesses but doesn't resolve individual car hire disputes.^[1]

Does travel insurance or a credit card cover the rental excess?

Sometimes. The ACCC notes that some travel insurance policies and credit cards may include hire car excess cover.^[1] Moneysmart lists car hire among the things most travel insurance policies cover, says the level of cover changes between international and domestic travel, and tells you to read the product disclosure statement (PDS).^[3]

Credit card cover is narrower. Moneysmart says you usually need to pay for a certain amount of travel costs with the card to be covered, the cover may apply only to the cardholder, and it generally covers only the trip you paid for on the card.^[3]

If you're comparing total rental costs, the weekly vs monthly cost guide shows what the rent comes to for different lengths.