Should You Decline the Miles You Can Earn for Renting a Car?
"Reader Questions" are answered three days a week — Mondays, Wednesdays and Fridays — by TPG Senior Writer Julian Mark Kheel.
TPG reader Ryan sent us an email to express his surprise about an extra charge on his recent rental car bill...
[pullquote source="TPG Reader Ryan"]I just reviewed my car rental receipt with Dollar Rent A Car. I didn't recognize the "FF SURCHARGE" and was surprised to find that it's a fee I paid to Dollar to cover the Alaska Airlines miles I "earned" through the booking. Do other rental companies charge a fee for miles?[/pullquote]
When you earn miles by flying an airline or eating at a restaurant that participates in a dining program, there's usually no extra fee charged for those miles. Miles earned on your credit card for renting a car don't come with an additional charge, nor do any miles you earn by going through a shopping portal first in order to book the car. So why would there be a fee for adding your frequent flyer number to the rental reservation, right?
Well, the rental car companies don't see it that way. In fact, what Ryan experienced at Dollar is a very common practice across most rental car companies. When you're in the process of booking and you're presented the option to add a third-party loyalty program number to your reservation, those miles will almost always come with a fee attached.
In some cases, such as when booking with National Car Rental or several other companies, you'll see this stated clearly right next to the option to select a loyalty program, though you might still need to dive into the terms and conditions in order to figure out what the actual fee will be.
But in other cases, it takes extra work to realize you'll be charged for the miles. Dollar doesn't disclose this charge directly next to the option when booking online. Instead, you have to click on the "Local Policies, Terms & Conditions" link to find it spelled out...
Even when you see a promotional offer for bonus miles on a rental car, you'll want to look closely at the terms and conditions to see if the extra miles are, in fact, free.
So is it worth paying for these miles? Let's do the math using this Dollar/Alaska triple miles promotion as an example. Dollar says you'll get 150 Alaska Mileage Plan miles per rental day, but the miles are subject to a surcharge of 95 cents per day. That means you're effectively paying 0.63 cents per mile. Based on the most recent TPG monthly points and miles valuations, Alaska miles are worth 1.9 cents each, so buying those miles at one-third of that value is probably worthwhile.
However, if this wasn't a triple miles promotion and you only got 50 miles for 95 cents per day, you'd be paying a much higher 1.9 cents per mile, which means you're not gaining any value by purchasing those miles. Better to leave your frequent flyer number off the reservation in that case and save your infinitely more flexible cash for a better mileage offer down the road.
So Ryan, now you know what to keep an eye out for the next time you consider earning miles for renting a car. Thanks for the question, and if you're a TPG reader with a question you'd like answered, tweet us at @thepointsguy, message us on Facebook or send an email to email@example.com.