Renting a car? These are the cards you need to get now

Apr 23, 2020

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Editor’s note: At TPG, our top priority is providing our readers with the information needed to make educated decisions about travel and rewards-earnings strategies. This is not the best time to travel, domestically or internationally, but we are sharing details about these cards because they are great offers that could provide value to cardholders for future travel once coronavirus concerns have subsided.

Although no one knows exactly when the coronavirus pandemic will ebb and it will be safe to travel again, it’s fair to say that many people are going to be reevaluating the way they travel and opting for more socially distant trips over mass transit. For many, this might mean renting a car and taking a memorable road trip instead of boarding a flight.

Find COVID-19 updates on TPG’s coronavirus hub page and sign up for our daily newsletter for the latest news.

Here at The Points Guy, we tend to focus on how to best use your hard-earned points and miles when booking travel, but what about saving money when the unexpected happens while traveling?

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

If you’re planning on renting a car for your next vacation, now is the perfect time to add either the Chase Sapphire Preferred Card or Chase Sapphire Reserve to your wallet. No, it’s not just for the hefty sign-up bonus or the bonus Ultimate Rewards points you’ll earn by paying for the car with the card (2x on the Preferred and 3x on the Reserve). Instead, it’s the layer of insurance you’ll get, thanks to a benefit known as primary car rental coverage, which can save you hundreds or even thousands of dollars in the event of an accident.

Whether you opt for the Sapphire Preferred or the more premium Reserve, keep reading to find out why you need at least one of these cards in your wallet today.

Related reading: 5 reasons to get the Chase Sapphire Preferred card 

What is primary car rental coverage?

Let’s start with a quick primer on exactly what this benefit is. Whenever you rent a car, you’re typically offered additional insurance coverage through the rental company for an added fee (which could be as high as $20 per day). This is commonly referred to as a “Collision Damage Waiver” or CDW. Fortunately, many popular credit cards offer car rental coverage and thus allow you to decline this added fee but still enjoy protection on the car. However, the vast majority of these policies give you secondary coverage. As the name indicates, this would kick in on a secondary basis after other applicable insurance policies apply (namely your own personal car insurance) in the event of damage or loss to your rental car.

Primary coverage works in the opposite way. If you’re driving a rental car and get into an accident or have your car stolen, primary car rental protection kicks in first. This prevents you from needing to submit the claim to your personal insurance company and subjecting you to a possible deductible and future rate hikes.

If you decline the car rental company’s optional CDW and use the Chase Sapphire Preferred or Chase Sapphire Reserve to pay for the car, here’s what you’ll get:

“The Auto Rental CDW benefit provides reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles. It is primary coverage which means you do not have to file a claim with any other source of insurance before you can receive coverage under this benefit.”

Bear in mind that this only provides coverage for the car; it doesn’t include liability insurance for damage you cause to property nor will it cover injuries to you or others involved in an accident. That being said, it can still be an incredibly valuable benefit if things go wrong this summer.

Related reading: Should the Chase Sapphire Preferred be your next card?

Hypothetical Example

Let’s consider two hypothetical travelers who are hitting the road this summer and renting a car with their respective families: John and Allison. After reading this article, John signs up for the Chase Sapphire Preferred Card and when he arrives at the rental car desk, he declines the extra Collision Damage Waiver (despite a hard sell from the agent) and uses his new card for the rental. Allison also declines the CDW but then swipes her no-annual-fee card for the car. Since she uses that card for all of her purchases, she doesn’t even think twice.

Fast-forward to three days later … after a fun day of sightseeing in their respective destinations, the two families come back to their rental cars and find them scraped along the side. There are no notes from the other drivers or any nearby cars with damage; just the horrible realization that they are facing the possibility of an additional expense for repairs.

The rest of their trips continue without incident, and they pull into the car rental return ahead of their flights home. The agents in charge of checking their cars back in notice the damage (not surprisingly) and file accident reports. Each one notes that they’ll need to repair the car and will assess both the cost of repairs as well as loss-of-use fees while the car is in the shop (and thus can’t be rented).

Related reading: Make sure you do these 5 things when you get Chase Sapphire Preferred

After a few weeks, the bill from the car rental company arrives and includes the following amounts (rounded to make the calculations easier):

  • Damage: $960
  • Loss of use: $150

To cover the tab, $1,110 has been charged to the credit card each renter used when they picked up their cards.

Here’s where the two families’ experiences diverge. John calls the benefits administrator on his Chase Sapphire Preferred Card (1-888-320-9961) and fills out the Collision Damage Waiver claim form. Along with this completed form, he submits copies of the billing statement showing that the entire rental was charged to his card, the accident report from the car rental company, the rental agreement, the repair estimate and several photos he took of the damage. Just 12 days later, John receives a check in the mail for the full amount that he paid (or possibly a statement credit directly to his card).

Related reading: Chase Sapphire Preferred credit card review

Allison has a very different experience. Since the card she used for the rental doesn’t include primary car rental coverage, she must submit the claim to her personal insurance company for reimbursement. Her policy has a $500 deductible and doesn’t include a provision for loss-of-use coverage. As a result, Allison is only reimbursed for the additional $460 in damage above her deductible. In addition, when her personal insurance policy renewal comes up later in the year, she notices that her rates have been hiked $90.

When all’s said and done, John came out $650 ahead of Allison simply by opening and then using the right credit card for his car rental. This gap will actually grow each subsequent year thanks to the higher insurance premium Allison now must pay. Talk about an expensive mistake — and one that’s easy to avoid!

If the story of John and Allison isn’t enough to convince you, let me share one of my own. I studied abroad in Paris during college, and one weekend after finals were over a few friends and I rented a car to drive down to the Mediterranean coast and visit Monaco, Nice and St. Tropez. After an incredibly fun weekend, we stopped at a farmers market in Nice to pick up lunch and headed to the beach one last time before starting the nine-hour drive back to Paris. We couldn’t have been gone more than 45 minutes, but we came back to find the front passenger-side window of our Toyota Yaris smashed in and half our backpacks gone from the back seat (though go figure — whoever robbed us left an iPad in plain sight!).

Replacing my laptop and passport was an ordeal all on its own, but our immediate concern was getting back to Paris safe and sound. After nine hours on the highway with the window “open,” we made it back to the Hertz outlet where we’d rented the car. The bill for the damage plus the loss-of-use fees came out to just under $1,000, all of which Chase reimbursed to my Chase Sapphire Preferred card before the end of the semester.

The Sapphire family of cards are known for their strong earning and luxury perks, but Chase has had my back on a number of occasions with incredible travel protections when things go wrong, and in doing so they’ve earned my loyalty for life.

Bottom Line

Opening and using travel rewards credit cards is a great way to unlock valuable redemptions like luxurious hotel rooms or premium-class flights. However, a less-heralded set of perks on these cards can really come to the rescue when things go awry, especially when you’re traveling. Paying for damage to a rental car is one, but paying with a card like the Chase Sapphire Preferred Card will ensure that it doesn’t cost you dearly.

Of course, there are a handful of other card options with primary car rental coverage, but the Sapphire Preferred is my top pick thanks to the incredibly lucrative value it offers, especially for someone just getting started with points and miles. If you don’t currently have one of these cards and are renting a car this summer, time’s running out to grab one and drive off the rental car lot with added peace of mind.

Apply here: Chase Sapphire Preferred – 60,000 points after $4,000 spent within the first three months and Chase Sapphire Reserve – 50,000 points after $4,000 spent in the first three months

Featured photo by @Gouldjosh via Twenty20

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the 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.