A car rental agreement, also called a vehicle rental contract, is a legal document that details the terms for the rental between the company and the customer. In this type of agreement, the customer rents the car for a set period in exchange for some money paid in advance. The rental agreement defines the insurance coverage, duration of the car rental, who is responsible for paying the fuel charges, mileage usage, damages caused by the customer or a third party, and any additional charges. Such rental agreements generally bind the parties involved and are enforceable by law.
Note: It is important to understand that a vehicle lease agreement differs from a vehicle rental agreement. Even though the customer must pay a specific amount of money to access the vehicle, there are some notable differences. For instance, in a vehicle lease agreement, the duration is usually longer, while in a rental agreement, the vehicle is rented for a duration usually less than twelve months. Ideally, the rental company insures the vehicle before renting it to the customer. This is to absolve the renter from theft and accident liabilities. However, the renter may or may not have to pay for maintenance depending on the length of the rental period. Also, the renter may be charged for damages to the vehicle when returning it.
This article will dissect everything you need to comprehend, including why you should sign such a rental agreement, what is included in the agreement form, and what to consider when signing an agreement to avoid complications. This article will also provide free downloadable templates that you can use when signing a rental agreement form for a rented car.
Car Rental Agreement Templates
Renting a car from a rental company is often very simple and straightforward. Still, ensuring you are fully aware of all the terms and conditions applicable to the agreement to avoid any disputes later is important. We have provided free downloadable rental agreement templates for vehicles that can be readily downloaded and customized to suit your needs.
Why Should a Car Rental Agreement be Signed?
Signing the agreement signifies that the customer has read, completely understood, and accepted the terms and conditions outlined. Additionally, signing the agreement form clarifies each party’s rights and obligations within the contract. This way, the renter can identify the liabilities bestowed on them and what they should expect from the rental company. This is beneficial, as it prevents future disputes. A signed rental agreement is proof of the rental transaction and can be presented as viable evidence in legal proceedings. Lastly, the renter needs to know exactly what they are signing when renting a vehicle since they typically accept a set of terms they have no control over.
The agreement also offers legal protection to the customer and the rental company because they set forth the terms of use for the vehicle before renting it. This means that if anything later happens that the renter deems a violation of the contract, they can have grounds to file a lawsuit against the car rental company.
What is Included in a Car Rental Agreement Form?
The form must include several necessary items for a car rental agreement to be legally binding and valid. These items may render the agreement invalid and legally unenforceable if not included. This means that if your contractual rights as the renter are violated, you may be unable to file a lawsuit against the car rental company.
Some of these items include the following:
Details of the parties involved
The form must include the customer and rental company identification details for the agreement to be binding. This will most likely include your and the car company’s name, address, and contact details, such as phone numbers and email addresses. You should also include your driver’s license number and state of issue.
Vehicle’s condition
The rental agreement form must record the car’s condition, including any existing damage, to establish whether it is suitable for use. This information is necessary because it helps establish the full extent of damage to the rented vehicle in case of an accident. By clearly outlining the vehicle’s condition in the form, you can avoid disputes when returning the vehicle after the lease duration ends.
Mileage limit and the gas tank reading
The agreement form must record the mileage limit you are to cover during the rental period and a gas tank reading at the time of issuance of the vehicle. This is because, in most cases, the car rental company will charge you for the mileage you have traveled if you return the vehicle past the mileage limit provided in the agreement. This will help you avoid paying for the mileage and gas overcharges.
Note that sometimes the rental company provides you with the car with full gas tank reading and expects you to fill the vehicle with gas before returning it. This is referred to as the “full to full” policy.
Rental period
The duration of the rental period, including start and end dates, should be included in the rental agreement form. This is important because it helps determine how long you can use the vehicle before returning it. Verifying the duration with the car rental company before signing the contract is important to ensure you have enough time to use the vehicle. Most companies usually give a grace period of 30 minutes before they charge you an extension fee.
Rental vehicle details
The vehicle being rented must be described in the rental agreement form. This includes the type of vehicle to be rented, its color, and VIN/Serial Number. This helps you to verify the vehicle at hand. It is also important to understand that some car rental companies do not need you to specify the type of car you wish to rent. Rather, they will have only one type of car available. In such cases, it is important that before signing an agreement form, you ensure that you have thoroughly inspected the vehicle and are satisfied with it before renting it.
Undertaking
An undertaking is simply a statement of intent or promise, which means that by signing the rental form, you agree to abide by all the rules/regulations the car rental company outlined in the form/document. Therefore, it is imperative that you read and understand each rule, regulation, and purpose of such rules in the car rental agenda before signing an agreement. You should not sign the agreement form if you cannot abide by any of these terms or rules.
Attestation
The car rental company should provide you with an attestation confirming that the car they have leased to you is in excellent working condition. Therefore, verifying the vehicle’s condition before signing the contract is important to ascertain that the vehicle is in excellent working condition, with no known damages or defects.
Insurance details
The agreement form must clearly state the type and amount of liability insurance you must have before renting a vehicle. Car rental companies usually require you to carry a certain liability insurance coverage with your driver’s license. You should ensure you have all the necessary details regarding your insurance coverage so that you do not miss any deadlines for filing claims after an accident.
Also, check to ensure that the insurance covers things such as accidents, theft, fire, etc. In addition, make sure that the insurance provided covers the full term of the agreement.
Terms and conditions
Terms and conditions are rules you must abide by while renting the car. Most people tend to skip reading them, but it is important to read this agreement section because it outlines what you can or cannot do with the rented vehicle. Some common rules usually specified in most car rental forms include driving at speeds above the maximum limit, exceeding any mileage limit, not carrying more than three passengers at a time, and not carrying any pets unless cleared by the company.
Other rules may include not driving under the influence of alcohol or drugs or carrying weapons or illegal items. When renting a car, you should read and understand the terms and conditions provided by the car rental company to avoid any disputes after returning the vehicle.
Payment and charges
Before signing the form, always read and understand the payment terms and fees. Also, verify that they are reasonable and within your financial ability. Most car rental companies will offer different selections of cars with different prices on their website. However, they do not offer special discounts to attract customers. The price displayed in the advertisement may not necessarily be what you will be paying at the end of your contract term. If you are unsure about their prices, it would be better to get a quote from several car rental companies to compare their charges before deciding.
Consider Effective Practices to Avoid Complications in the Future
While reading and understanding the agreement before renting a car is very important, it is also important to take effective steps to avoid complications in the future.
Things that you can do to avoid such complications include:
Paying attention to three key sections
Most car rental companies offer different types of insurance coverage, such as breakdown, collision, and third-party coverage. You should ensure that you know your insurance coverage requirements before signing the agreement.
You should also make sure that the following are well documented in the rental agreement:
- Collision damage waiver: A collision damage waiver means the car rental company will cover the repair cost if you are involved in an accident. The amount of money you will have to pay the company for such repairs may vary from one company to another. They will offer collision damage waivers or CDW as part of their insurance package. If you choose to opt for this coverage, you should ensure it is clearly stated in the contract.
- Theft protection: Theft protection or theft reimbursement means that the car rental company will cover the repair cost should you be involved in a theft. Some companies offer theft protection as part of their insurance package, while others offer theft reimbursement. The amount of money you must pay them for such repairs will also vary depending on your choice. If you have decided to opt for theft protection, you should ensure it is clearly stated in the rental agreement.
- Third-party liability coverage: Third-party liability coverage is important to any insurance policy. Third-party liability coverage usually covers the legal costs you may have to pay should you get involved in an accident with another person and cause damage or injuries to the victim. If you were to be involved in an accident with the rented vehicle and did not have third-party liability coverage, you could be held legally accountable for all the damage and injuries incurred. Some car rental companies will offer third-party liability coverage within their insurance package, while others will only offer this coverage in addition to the insurance package. Before signing the agreement, it is important that you inquire if they provide third-party liability coverage and whether it is included in your insurance package.
Take steps when you pick up the car
When you pick up the car, you should ensure that the type of car you have reserved is the same as what you get. It is also a great idea to check your vehicle registration and insurance card and ensure they are complete, accurate, and current. Before driving off, you should inspect and take pictures of your vehicle to avoid future disputes.
Do the necessary things when you return the car
When you return the vehicle, you should ensure it is damage-free and has excessive wear. When you return the car, it should also be clean and in good running condition. Before leaving the car rental office, you should check if all the services listed in your contract have been performed and document any additional charges you have incurred on the invoice provided by the company for your records.
Also, consider taking pictures of the car, especially if you are returning it with damages. This will help eliminate any discrepancies in damage or excess wear and tear on the vehicle, as you will have proof to go with your claim.
Frequently Asked Questions
What should you do if your rental car gets damaged?
If your rental car gets damaged during your rental period, it is as important to report the damage to the car rental company as it is to ensure you are covered against them. Most companies have deductibles that they charge for damages and other claims that may be incurred. The deductible amount will be deducted from the deposit you have paid before filing a claim.
What if you cause damage to another car when driving a rental car?
If you cause damage to another vehicle when driving a rental car, the car rental company will typically hold you liable for such damages. However, if it is proven that the accident was not your fault, you will be free from any liability for the damage caused to the other vehicle. If you have opted for third-party liability coverage through your insurance policy, then your insurance policy will cover the total cost of damage and repairs.
What if you have a dispute with the car rental company?
If you have a dispute with the car rental company, it is important to ensure that you carefully document all the details of the situation, as evidenced by asking for photos and an itemized invoice. You must also take the necessary steps to ensure that your claims are properly processed and in accordance with the law.