Jeju Curbs Excessive Rental Car Competition... Sets Discount Rate Cap and Codifies Self-Damage Exemption Standards

Administrative Regulation Announced on July 15; Takes Effect September 16
Clear Standards Set for Deductibles, Exemption Fees, Loss of Use Compensation, and Coverage in Self-Damage Exemption System

Jeju Special Self-Governing Province has finalized and announced the 'Regulation on Stipulating Car Rental Terms and Related Matters' on July 15, which aims to curb excessive discount competition in the local rental car industry and to provide clear operational standards for the self-damage exemption system. The regulation seeks to preemptively prevent disputes between consumers and businesses by codifying these standards and will take effect after a two-month grace period, starting on September 16.

A panoramic view of Jeju International Airport area in Yongdam-dong, Jeju City, the gateway to Jeju Special Self-Governing Province and the first step for tourists using rental cars. Starting September 16, the introduction of rules formalizing the upper limit on rental fee discounts and the operating standards for the collision damage waiver system is expected to significantly reform the rental car environment on the island. Photo by Park Changwon.

According to Jeju Province, the newly established regulation primarily introduces an upper limit on the daily rental fee discount rate to prevent reckless and excessive competition where rates are reported far below standard levels. It also clearly defines the details of the self-damage exemption system—such as deductible amounts, exemption fees, compensation for loss of use, and coverage scope—which have frequently been the subject of disputes between consumers and companies due to a lack of explicit standards thus far.

This measure is intended to make the rental car pricing system more rational, rectify distortions in the market order, and strengthen both the consumer’s right to know and overall consumer protection.

During the process of establishing the system, the province held a legislative preview in June as well as an informational session for rental car businesses in Jeju in order to coordinate opinions from the industry. The final version of the regulation passed the Ordinance and Rules Deliberation Committee on June 22, leading up to its proclamation today.

Jeju Province will allow a preparation period for individual businesses to report any changes to rental fees and exemption systems and to ensure these changes can be properly implemented. The regulation will come into full effect on September 16.

This establishment of the rental car terms regulation in Jeju Province is seen as a milestone measure that can significantly raise the level of trust in Jeju tourism. It directly addresses long-standing tourist grievances regarding dumping-style ultra-low price discounts and opaque self-damage exemption fee practices.

However, there are concerns that, in the early stages of implementation, loopholes such as irregular business practices to skirt regulations or passing on additional on-site fees to customers could emerge. Therefore, heightened caution is advised for users during the transition to the new pricing system to minimize unnecessary friction between consumers and the industry, and it is considered necessary for the relevant administrative authorities to strengthen proactive on-site monitoring of the rental car market.

Kim Samyong, Director of Transport and Aviation at Jeju Province, stated, "With this new regulation, consumer inconvenience and excessive competition within the industry surrounding rental car fees and self-damage exemption systems will be greatly reduced. We will establish an environment of trust for both operators and consumers, enhancing the competitiveness of Jeju tourism. During the initial phase of implementation, we will also conduct promotional campaigns and on-site guidance for businesses."

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