Budget Rent a Car, like many car rental companies, participates in frequent traveler programs that allow you to earn airline miles or hotel points when you rent a vehicle. This sounds like a great deal for frequent travelers looking to maximize their rewards. However, a closer look at the costs involved reveals a hidden fee that might make you question if enrolling in these programs is truly beneficial.
Many renters are attracted to the idea of accumulating miles or points passively while taking care of their transportation needs. For example, Budget offers the option to add frequent flyer numbers from various airlines, including American Airlines, Delta, and United, to your car rental reservation. The catch lies in what Budget terms a “Frequent Traveler Program Surcharge” or “Excise Tax.” This fee is levied to “offset a portion of Budget’s annual cost of participation in frequent flyer programs.”
While the wording might sound innocuous, this surcharge can significantly reduce, or even negate, the value of the miles or points you earn. In the case highlighted by a user, Budget charged a $14 “Frequent Travel Program” fee for a 14-day rental for adding an American Airlines frequent flyer number. For this fee, the renter would earn 500 American Airlines AAdvantage miles.
Let’s break down the value proposition. A common estimate places the value of an American Airlines mile between 1 to 1.5 cents. Therefore, 500 miles are worth roughly $5 to $7.50. By paying a $14 fee to earn these miles, the renter is effectively paying significantly more for the miles than they are worth. In this scenario, the cost per mile becomes approximately 2.8 to 4 cents per mile, far exceeding the average valuation.
This example isn’t unique to American Airlines. Budget’s fine print indicates that the surcharge applies to numerous airline and hotel loyalty programs, though the exact amount can vary. It’s crucial to note that this fee is per day. For longer rentals, like the 14-day example, the accumulated surcharge can become substantial.
Therefore, before automatically adding your frequent flyer number to your Budget car rental reservation, it’s essential to ask yourself: is it worth it? Consider these points:
- Calculate the Fee: Check the “taxes and fees” breakdown when booking to identify the “Frequent Travel Program Surcharge.”
- Evaluate Mile/Point Value: Know the approximate value of the miles or points you expect to earn in your chosen program.
- Compare Cost vs. Benefit: Divide the total surcharge by the number of miles/points earned to determine your effective cost per mile/point. Compare this to the average value.
In many cases, especially with Budget’s surcharge, paying extra for frequent traveler programs on car rentals may not be the most economical way to accrue rewards. The convenience of automatic earning can be overshadowed by the inflated cost of miles or points purchased through these surcharges. Always scrutinize the fine print and do the math to ensure you’re getting a genuine benefit from frequent traveler programs on car rentals and not just paying for the privilege.
