Record rate hikes in rental car fees

If you haven't rented a car for a while, be prepared for sticker shock along with extra fees for everything from earning frequent-flier miles to canceling a prepaid booking.

"This past year, we saw record rate hikes," says Neil Abrams, a consultant for New York-based Abrams Consulting Group, which tracks car rental rates.

Reacting to a downturn in business due to the global recession, rental companies reduced their fleets by as much as 25percent by replacing fewer cars, "That created an artificial demand and higher prices," Abrams said.

shortages over holiday periods that left many scrambling to find available cars. Certain types of cars will be harder to come by (such as convertibles in Florida) as rental companies shift more of their fleets to more fuel-efficient vehicles.

Other changes are afoot. Just as airlines started charging for checking bags, car-Rental companies are looking for ways besides price increases to boost their bottom lines. A few tips:

CANCELLATION POLICIES

Except for prepaid bookings, major car rental companies don't require a credit card to hold reservations and don't charge for cancellations or no-shows, but there . Barrows predicts there soon could be fees for failing to cancel reservations for certain types of high-demand cars - hybrids or passenger vans, for instance - just as many hotels require a 24-hour notice on cancellations.

AIRPORT SURCHARGES

Rental prices are highest at airport locations, where extra fees taxes and facility charges can add an up to 30 percent to the total price. Better public transportation in many cities makes picking up a car in downtown locations easier than it once was. Plus, you might be able to drop off at the airport at no additional charge.

PREPAID PITFALLS

Some rental companies offer discounts for prepaying, but read the fine print for cancellation penalties ($10-$50) and extra charges that can't be prepaid. Check to see if an AAA or AARP discount might yield the same savings, without the penalties.

FREQUENT-FLIER SURCHARGES

Some companies charge a fee on rentals that earn airline frequent flier miles. Hertz charges $1 a day or a maximum $5.25 a rental. Avis charges 75 cents a day for miles earned on most airlines; $1 for Southwest. Budget charges 75 cents a day.

INSURANCE

Odds are you won't need extra insurance - at least in the United States. Your auto insurance policy will likely pay most of the damage if you're involved in a rental accident. Your credit card company likely will provide secondary collision, theft and damage coverage if you pay for the car with the same card and decline collision waiver (CDW) coverage.