May 10th, 2011

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Today’s guest blog post is by Flyertalker Evan! (that’s his handle- I’m not actually screaming), who is known for being one of the most savvy people when it comes to analyzing car rental programs and promotions. I fully admit that my coverage on car rental programs has been minimal, so I’ve asked Evan! to chime in from time to time when there are opportunities that TPG readers should know about. For his first post, I’ve asked him to do a “101” so you can hopefully understand the concept of the car programs, because they are much different than airline or hotel loyalty programs.

The Points Guy has asked me to share with his readers some tips I have gleaned over the last few years on renting cars – more specifically; frequent flyer/point accumulation from car rentals.  Before you scroll down the page looking for the next article you might want to reconsider as you could be losing out on some very lucrative miles/point earning opportunities.

Whether you are a business renter or a personal renter, the opportunity to earn loyalty miles/points is out there.  But often the miles/points don’t come free, so you need to avoid “deals” that will actually cost you more money. So let’s get started the the basics of perk programs when renting cars.

#1 Consider earning points in the car company’s own loyalty program instead of earning miles.  Examples: Hertz #1 Awards, Thrifty Blue Chips and Avis First.  These programs vary greatly on their structure – some allow for earning agency-specific perk units and partner perk units (frequent flyer miles, hotel points, etc) while others only allow one OR the other.  From my experience it’s only the very frequent renter that can benefit by earning agency-specific perk units, because multiple rentals are required to gain any tangible value. If you only rent once in a while, it’s probably smartest to choose airline/partner miles and points.

#2 Never earn on the base earning ratio, because you will pay more for the miles than they are worth.  Most of the time, the perks are NOT free, so I only recommend earning miles when promotions make it very lucrative.  The majority of agencies in the U.S. charge a “frequent flyer mile surcharge” so you are basically paying for the miles they are “giving” you.  The daily surcharge can range from 75 cents to $1.50.  The base earning rate (no promotion attached) for most agencies is around 50 to 100 miles per day.  (I’m going to stick with “miles” for the moment but you should note that hotel points are usually in the 250/day range.)  At 50 miles per day @ 75 cents (before tax) per day you are buying miles at 1.5 cents per mile.  Not very good. With that said there are three exceptions worth noting to this rule:

    1) Most car companies do not charge a surcharge when earning miles/points in a non-U.S. program such as British Airways or Flying Blue.  Consider entering a FF# for a foreign carrier when earning only the base rate.

2) You have miles/points about to expire in a program and you need activity to re-start the expiration countdown clock.  (Okay, but honestly there are so many better ways to extend the expiration date of FF miles.)  Keep in mind that it only takes 1 mile earned (in most programs) to re-start the clock.  Don’t waste the $ for a week of surcharges for this purpose. Keep it down to 1 or 2 days of renting.

3) Often crediting your earnings to a hotel program rather than an airline program will mean no surcharge.

#3 Familiarize yourself with the lingo. Most car companies provide for the use of a discount code as well as one or more coupon codes.  Discount codes play the larger part in determining how much you pay for your rental.  And paying “rack rate” is THE CARDINAL SIN of the savvy-traveler world – if you do that, you’ll be considered a big loser.  Coupon codes are very different.  They can affect the rate you pay (free weekend day, 10% off, etc) but they can also grant you upgrades, hardware (GPS, On-Star), or … PARTNER PERK POINTS.  Don’t get me wrong, sometimes the discount code earns FF miles/points, but in general discount codes determine the rate you pay and coupon codes determine the perks you get.  Hertz has “CDP” and “PC” codes.  Avis: AWD and coupon.  Budget: BCD and coupon. Alamo: Corp ID and coupon.  When you are booking, know what these fields are for and use them appropriately.  A coupon code that earns 1,000 FF miles on your airline of choice can bring that daily surcharge into an acceptable rate per mile.  Example: A three-day rental that incurs a 75-cent per day surcharge with a 1K bonus and 50 miles/day base nets the renter 1,150 miles for $2.25 or  $0.002 per mile (that’s two-tenths of a penny per mile).  Without the bonus the renter is buying 150 miles for $2.25 … you do the math … it isn’t pretty.

#4 Take $$$ before miles! Let’s say you have a discount code that disallows for earning of partner perk units and the total you will pay for the rental is $200.  You also have a different discount code that DOES allow for earning miles and a coupon to get 1,000 bonus miles.  But the rental is now $225.  TAKE THE CASH.  Let’s say the entire haul of miles is 1,200 (4 days).  $25 extra in rate + $3 in FF miles surcharges = $28 for 1,200 miles which ends up being $0.023 per miles – or 2.3 cents per mile.  Personally I’d rather bank the $28 and use it to buy a ticket the next time I want to fly.

#5 Don’t be misled by ad copy.  Very often a promotional ad will imply that renter must use a specific discount code in order to get the miles from a coupon code.  Buried in the Terms and Conditions you might find that another discount code can be used and you can still glean the miles from the coupon code.   While the T&C is usually in a very small font size using Ctrl with the “+” key (Command with “+” on Mac) will raise the font size making the “fine print” not so fine anymore.  Which brings me to….

#6  Read the Terms and Conditions. All of this advice is moot if you find out too late that a Saturday night was required in order to qualify for the bonus miles.  Take a screen shot of the ad copy AND the T&C. It takes only few seconds and you can email the image to yourself for safe keeping.  Screen shot tools are usually free.  Here are some browser add-ons for screen shots:Firefox – FireShot

Chrome – ScreenSh00ter

Opera – Lightshot

Safari – Snapper

Internet Exploder – I’m sorry, what did you say?

This is by no means the most comprehensive guide to rental cars, but it’s a starting point. I know this can be confusing, so I will be hanging around to answer any questions. Feel free to ask them in the comments section below. My next post will be an overview of the best earning promotions out there, so stay tuned!

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.