Delaware House approves consumer protection rules for rental car customers. What’s next?

The Delaware House of Representatives recently approved legislation that would implement robust consumer protections for rental car customers impacted by “loss of use” fees in the state. 

Currently in the state of Delaware, rental car companies are permitted to charge customers a fee called “loss of use.” This fee is imposed on customers when a rental car is out of service following car damage from a reservation. 

The problem? The loss of use clauses are often ambiguous and hidden in rental agreements, leaving customers susceptible to price gouging. To make matters worse, there is currently no oversight on how much and for how long rental car companies can charge customers for loss of use, meaning customers are sometimes paying fees for long periods of time for vehicles that may not even be intended for future rent.

News reports from NBC and USA Today have found rental car companies are charging thousands of dollars to customers over the course of a year or even, shockingly, after a whole year. Consumer protection news reports in multiple states have also noted that many insurance companies refuse to pay loss of use, leaving the customer to foot the bill. 

We know accidents happen and, look, if a customer brings a vehicle back with damage, then absolutely they should be on the hook for the repair cost, if they skipped on a protection plan. However, car rental companies seem to calculate their loss of use fees according to a theoretical, unknown, and possibly made-up formula. Customers may not even know whether the rental car companies would have actually been renting out the damaged vehicle. Plus supply and labor delays can drive up costs, favoring rental companies

Today, three U.S. states have banned the loss of use fee, and nine states have limitations on how rental car companies can charge it. 

It seems Delaware wants to enact a ban on loss of use with HB 209, and that measure would be welcomed by consumers. The DE Senate is slated to take up the measure and, if passed, it would go to the governor’s desk to be signed into law. Until then, customers who want to play it safe should turn to Turo– a car sharing company that never charges customers a loss of use fee.