Excessive Cancellation Penalties, Overcharged Repair Costs... Rental Car Damage Warning During Vacation Season

[Asia Economy Reporter Jeon Jinyoung] Mr. A rented a vehicle from a car-sharing company for 111 hours last March and used it for 53 hours. Mr. A requested a refund for the remaining usage time, but the company said cash refunds were difficult and instead credited him with points worth about 32,000 won. Mr. A is demanding a cash refund and a recalculation of the remaining usage fee.

As the number of consumers using car rental services increases, disputes related to excessive cancellation penalties, overcharging for repair costs and deductibles after accidents, and other issues have also risen.

The Korea Consumer Agency analyzed 957 cases of rental car-related damage relief reported over the past three years (2019?2021) and found that consumer damages related to rental cars occurred most frequently in Jeju (44.1%, 422 cases) during June and July (22.7%, 218 cases).

By type of damage, ‘contract-related damages’ such as excessive cancellation penalties accounted for the largest share at 45.1% (432 cases), followed by ‘accident-related damages’ such as overcharging for repairs at 35.4% (339 cases), ‘issues during the return process’ at 6.7% (64 cases), and ‘poor rental car management’ at 6.5% (62 cases).

Among the 339 accident-related damage cases, 263 involved claims for damages by businesses to consumers. Analysis showed that ‘overcharging for repair costs’ was the most common at 55.9% (147 cases), followed by ‘excessive deductibles/self-payments’ at 38.0% (100 cases), and ‘overcharging for vehicle downtime fees’ at 19.0% (50 cases).

In particular, many businesses imposed uniform deductibles/self-payments regardless of the severity of the accident, and in the case of car-sharing, numerous cases were confirmed where excessive penalties were charged citing consumers’ failure to report accidents.

Analysis of rental car usage regions showed Jeju accounted for the highest proportion at 44.1% (422 cases), followed by Seoul at 35.9% (344 cases), and Gyeonggi at 9.6% (92 cases). When limited to short-term rental cars and car-sharing cases (729 cases) with similar service types, Jeju accounted for a majority at 57.2% (417 cases).

The Consumer Agency urged consumers to ▲check contract details such as refund policies upon cancellation, deductibles, and repair cost limits before signing contracts ▲inspect the vehicle’s exterior upon receipt ▲obtain repair estimates and maintenance records in case of accidents.

Additionally, in cooperation with Jeju Special Self-Governing Province, they plan to promote the use of standard automobile rental terms and conditions among local businesses and conduct consumer awareness activities to address rental car-related consumer damages.

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