5 Common Car Rental Scams in Central America

Renting a car in Central America is so different from the United States because there’s an enormous amount of precaution and paperwork. So far, I’ve rented cars in Panama City, Costa Rica, and most recently in El Salvador. Even though you may be enticed to rent a car in Central America due to seemingly low daily car rental rates, you may be in shock with your final bill. Here are 5 common car rental scams in Central America.

Why You Should Rent a Car in Central America
Car Rental Tips for Driving in Central America
5 Common Car Rental Scams in Central America

1. Manual v. Automatic Cars

In Central America, most of the lowest priced cars are actually manual cars, meaning manual transmission. If you’re not comfortable with driving manual, book a car with automatic transmission. Most people assume that the car they’re getting is an automatic (like in the United States), but look closely at the car you book because there will be a huge up-charge at the rental car facility to change cars.

2. Car Rental Damage Scam

A common scam with renting a car in Central America is a bill for damages that you did not cause. After returning your car, the rental car company might accuse you of pre-existing damages. The only real way to prevent this scam is by taking videos and photos of rental car before you drive it off the lot. Take a video with your iPhone clearly noting scratches, dents, and other damages to the car. After that, take lots of pictures with your mobile phone highlighting the affected areas. Also, tell the rental car agent to make note of the damages on the paperwork (which usually shows an image of a car) and highlight the affected areas .When using video and picture evidence against the rental car company, they will most likely back down.


3. Fuel Scam

Another common scam is getting billed for fuel at an exorbitant amount such as $10 a gallon plus taxes and service charges when you returned your rental car with a full gas of tank. You can prevent this scam by saving all your receipts from gas stations (yes, always get a receipt) and take a picture of the odometer and fuel gauge upon return of the rental car. With irrefutable photo evidence, the rental car company will back down on their claim.


4. Mandatory Supplementary Liability Insurance (SLI) Scam

You many have heard of the infamous mandatory Supplementary Liability Insurance scam or SLI scam. There are also variations of this ‘so called’ insurance called third party Additional Liability Insurance (ALI) which can cost $14.99 a day + taxes.

The so called mandatory SLI/ALI insurance is not really insurance at all. It’s basically free money in the car rental company’s pockets. $14.99 a day can really add up if you’re renting for a week. I highly recommend buying the American Express Premium Car Rental Coverage for a flat rate of $24.95 up to 42 consecutive days of coverage. Again, most rental companies in Central America will INSIST that you purchase the ‘mandatory’ SLI/ALI insurance even if you have the alternate additional Amex Premium Car Rental Coverage, so make sure you contact the rental car company beforehand to confirm. Car rental companies can hold up your car reservation hostage if you decline to pay for SLI/ALI insurance and you can’t prove you have alternate premium coverage.


5. Collision Damage Waiver (CDW) Scam

Never, ever pay for Collision Damage Waiver or CDW insurance if you are paying with a major credit card that has rental car insurance benefits. Why pay for redundancy? The cost of CDW insurance is not cheap as well and can cost up to $24.99 a day plus taxes.


Backtrack to Why You Should Rent a Car in Central America.


About the Author

Points Summary
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12 Comments on "5 Common Car Rental Scams in Central America"

  1. have you succesfully avoided SLI fees?
    do you need proof? what kind?
    same for CDW?

    • No I haven’t avoided the SLI fees because I only rent for a few days. Some places have SLI at $10 a day and I’d rather not get hassled at the car rental company. I’ve heard some people print out proof and what not but I don’t have any real world experience with that. Declining CDW is not a major issue at all but they always stress the SLI/ALI insurance.

      • i hear you. ill have to check if amex premium insurance includes liability. i feel like it doesnt.
        also surprising that hertz & alamo dont prevent this mandatory insurance scheme…or maybe not

  2. I have not gotten around SLI in those countries and don’t want to try to use my credit card as no credit card covers liability and Gene is correct, no Amex Premium is just amped-up CDW, it does not include liability.

    Another scam I have heard about in Nicaragua though did not encounter is police shaking you down if the rental agency did not pull all the required equipment in the trunk like the hazard triangle.

    Oh, and notarized documents to take a Belize rental to Guatemala for Tikal are pricey!

    Excellent post.

    • Ah, I’ve read one report online where some guy signed up for the Amex Premium Car Rental with printed proof and he was able to avoid the SLI fees altogether (perhaps it was an oversight). I don’t rent enough in Central America to try and get around the SLI, so I just pony up and pay for it. Yes, I’ve heard about the triangle and cone scam in Nicaragua as well. Thanks for the tips Stefan!

    • -sounds like the real issue is that in central america rental companies dont include liability in the cost of the rental?
      -whereas in other countries liability IS included in the cost of the rental?
      -why only cent. amer.? why not other, non-1st-world countries?

      • This is just a guess based on my work but in many respects Central American countries have regulations echoing Mexico, it allows fairly smooth conduct of business across the region, and so perhaps this started with Mexico and spread. It is the same procedure in Mexico.

        • yeah. ive experienced this in mex also. though was spared the liability ins in roatan.
          -interesting that hertz & alamo dont prohibit their franchises from imposing mandatory insurance.
          -so in other countries (slovakia, thailand, etc.) liability is included in the cost of the rental but CDW is not? who pays for the damage to other property?

  3. Declining or trying to get out of liability insurance is foolish! No credit card covers liability. It appears that in certain parts of the world (central america/caribbean at least) car rentals look cheap because they do not include liability coverage which is included by default in other places.
    CDW only means that the car rental company will not come after you for damage to their car. If you damage other property or cause injury, then liability comes into play and you want to be well covered!

  4. I just returned from Panama City Central America. I arrived to PTY airport.
    I reserved a car prior on Kayak.com at the rental rate was $5.00 a day including taxes. When I arrived to ACE rental car they would not rent me a car unless i took the mandatory insurance for $18.00 dollars a day plus tax.
    I have an amex cold, InK plus they would not accept it. I went around to Dollar, Hertz, Sixt all required the mandatory insurance. Not only that every car rental in the airport made you sign a deductible waver. Be prepared to wait a long time to get checked out. They make you sign 5 pieces of paper.

  5. I just rented a car from Sixt at the Airport in Panama City. Although I had made my reservation in advance and purchased a $88 supplemental insurance policy for my week-long rental they absolutely insisted I purchase an additional $28/day insurance policy and place a $8,000 deposit on a credit card OR pay an additional $280 in insurance and a $1,000 deposit. Although I argued and provided documentation of my policy they REFUSED to allow accept any of my current valid insurance. I reluctantly agreed to the additional daily $28 fee and $8,000 deposit. Mysteriously they could not get my card to work for the deposit. Of course they also would not allow me to use any of their telephones to call my card company and figure out what the problem is. Fortunately I was traveling with a friend who allowed me to use their phone and after calling my card company 6 different times (to confirm adequate credit availability, to verbally authorize the transaction, and to confirm that there was not a fraud block on the account) I was informed that none of the 8 attempts to authorize my Caital One card by Sixt showed up in their system. Sixt told me the card was an invalid number, but they were not running the card with a chip reader, but rather called another location where someone else ran the card. Evidently they were doing so incorrectly. Finally, after almost two hours of ridiculous drama I agreed to the additional insurance policy and $1,000 in deposit so I could take my group of 7, the van I reserved, and leave. My total charges had now gone from: $200 rental plus $88 supplemental insurance from Orbitz to to approximately $700 plus a $1,000 deposit (and that was after my local friend got them to give me a $70 discount by choosing a less expensive policy. Ultimately they took $3,000 from my debit card (but assured me the $1,300 difference would be credited back the difference in 7-10 business days). Then we I return the car the $1,000 deposit will take an additional 7-10 days to return to my account. I will be disputing the over charges as soon as I return to the US and I will NEVER rent from Sixt again!

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