Car hire - penalty charges/handling

Honest John Back Room » Motoring discussion
View Threaded
Mon 15 Jan 2007 21:27
Car hire - penalty charges/handling - Archie35
Good evening! I hope that someone can give me some motoring-related legal advice...

I recently hired a car in London, and, whilst lost, somehow managed to turn right at what I now gather was a no right-turn junction (along with a stream of other cars). I have just received a letter from the hire car company forwarding on a penalty charge of £100 from "transport for London", and charging me a further £30 handling fee. Leaving aside the error I made (I have worked out how to dispute the penalty, and my father went to look at the junction on my behalf and believes that the signposting is totally unclear and has taken some photos to prove the point), I am also somewhat unhappy about the additional £30 charge from the hire car company.

I read recently a BBC article about banks having to refund excess "penalty charges" on the grounds that one can only recover costs for actual losses -
article at www.tiny.cc/VswHI
I am now wondering whether the same principal applies to car hire companies. Surely there is no way that they can claim that it actually cost them £30 to forward on this one letter? I could believe a £5 charge for someone's time and postage (the man at the hire car desk was almost illiterate, so I cannot believe that they were paying him that much), but not £30. Does anyone have any thoughts?

Any comment gratefully received,

"Archie"
Reply | Report as offensive | Link
Tue 16 Jan 2007 08:08
Car hire - penalty charges/handling - Dwight Van Driver
What does the small print of the Hiring Agreement say about these and other charges i.e. parking PCN's. They do tend to cover these things tighter than a duck's backside.

dvd
Reply | Report as offensive | Link
Tue 16 Jan 2007 08:37
Car hire - penalty charges/handling - T Lucas
Not really the point about what it costs the hire company,after all they need to make a profit,and i'm sure you signed for it in the rental agreement.
Reply | Report as offensive | Link
Tue 16 Jan 2007 08:52
Car hire - penalty charges/handling - Bill Payer
I think the 'small print' thing is a red herring - the banks had pretty tightly drawn contacts, but were considered to be unfair.

The main issue with bank charges was a lot of them were for letters (ie saying you're overdrawn) which get sent out automatically so cost the banks next to nothing. I imagine tying a penalty charge to a hire car is quite a manual process.

In the bank charges case, some people paid thousands of pounds. This dispute is about a one off £30 charge - at the end of the day, is it worth spending time on?

You could try sending the hire company the penalty charge plus £12.50 for their trouble and see if they accept that, but maybe they'd either refuse to accept it or chase you for the difference and add a further admin charge.
Reply | Report as offensive | Link
Tue 16 Jan 2007 20:18
Car hire - penalty charges/handling - Archie35
Yup, I agree it is probably not worth that much time... It is however very irritating, especially on top of a fine that I really think is unfair! The car hire company's letter was clearly a form letter, and I would not imagine it really took that much time to dig out my address - it was on their computer, after all. All the clerk needed to do, I would guess, is type in the registration and date, and out would pop all in the info needed. As for the small print, all it said was that they would charge me any necessary admin costs in dealing with fines etc. I am afraid that I cannot pay them less, as they immediately took the admin fee off my credit card. A colleague did suggest that I should telephone my credit card company and tell them that I refuse to accept that charge, but I suspect that the credit card company would quibble with that also, and I don't really have the time to get into 3 arguments (transport for London, the hire car company and my credit card company!). The penalty fine itself is my responsibility to pay direct to transport for London - it goes nowhere near the hire car firm, another reason why I cannot see that this has cost them anything near £30.

All in all, I guess I will have to put it down to experience, but I have to say that everytime I drive in London I am heartily glad that I live elsewhere, and this has merely added to that feeling. Thanks for the various comments.
\"Archie\"
Reply | Report as offensive | Link
Tue 16 Jan 2007 21:15
Car hire - penalty charges/handling - Imagos
A national car hire company I know of employs 2 staff to process literally thousands of traffic violations over the whole country per year at a profit of £0 to them.

As a ballpark figure say the staff are on £15k and other costs of say £5k. (postal etc)

Thats £45K per annum with a profit of a bit fat zero!

So that's where your £30 comes into play my friend.
Reply | Report as offensive | Link
Tue 16 Jan 2007 21:53
Car hire - penalty charges/handling - Bromptonaut
A national car hire company I know of employs 2 staff
to process literally thousands of traffic violations over the whole country
per year at a profit of £0 to them.
As a ballpark figure say the staff are on £15k and
other costs of say £5k. (postal etc)
Thats £45K per annum with a profit of a bit fat
zero!
So that's where your £30 comes into play my friend.



Think those numbers only add up to £35k, but since staff will also need desks, buildings and IT support and the employer will pay NICs and perhaps a pension contribution I'd regard £45k as conservative!!!!!
Reply | Report as offensive | Link
Tue 16 Jan 2007 22:09
Car hire - penalty charges/handling - Imagos
>>Think those numbers only add up to £35k>>

well of course.. i hit the wrong key/o;

Anyway any business worth its salt would try and recoup this money.. hence the charge.
Reply | Report as offensive | Link
Wed 17 Jan 2007 12:14
Car hire - penalty charges/handling - The Lawman
Ok, here is the law!

the law of contract says that "penalty" clauses in contracts are unenforceable. a penalty clause is a cluase which says what damages will be payable in the event of a breach of that contract.

a clause is a penalty clause if if is not a genuine attempt to pre-estimate the loss that teh claiming party will suffer in teh event of a breach.

Going over your overdraft limit is a breach of the terms of the bank mandate (which is just another contract) The standard £30charge has not been tested in court, but it has been widely reported that banks are prepared to refund these charges rather than fight it out in court in each individual case.

I am not sure that the administration charge claimed by teh hire comapny would amount to a penalty clause. It does not relate to a breach of the hire agreement, so it isn't really to do with damages.
Reply | Report as offensive | Link