Rental cars: Watch for mileage restrictions

Many rental-car contracts, supposedly with "unlimited" mileage, limit the areas where you can drive. If you drive outside these areas, you could face some very unpleasant consequences.

A friend recently was arranging a rental car in Vancouver, B.C., and planned to drive to the neighboring province of Alberta. Fortunately, he read the fine print from the first rental company he contacted. Had he not checked, he could have been on the hook for a lot of money.

The company's policy stated that the unlimited mileage was confined to driving in British Columbia. If a driver takes the car out of B.C., the entire rental — not just the portion outside B.C. — reverts to a charge of 50 cents Canadian per kilometer (about 75 U.S. cents per mile). My friend figured on driving about 1,200 miles during his trip, and a short jaunt across the provincial border into Alberta could hike his total bill by $900 — far more than the base cost of the car.

This problem is not confined to Canada: You find it in many areas of the United States, at least from some companies. I've seen, for example, California rental contracts that prohibit out-of-state driving except for Clark, Douglas and Washoe Counties, Nevada (for Las Vegas, Lake Tahoe, and Reno). Ditto Northeastern rentals that limit vehicle use to a few New England states. If you violate one of these limits during a rental, you're liable to some combination of three very unpleasant consequences:

• Reversion of the entire rental from "unlimited" miles to a stiff charge — typically, somewhere between 75 cents and $1 per mile.

• Having to pay extra — a lot extra — for service if you have a breakdown.

• Cancellation of any insurance coverage normally included in the rental — even when you buy the extra-cost collision-damage waiver or personal liability coverage.

Beware of GPS tracking

In times past, many drivers decided to risk minor deviations from geographic limits, figuring that the rental company would never know. That's no longer the case: The rental company will know. More and more rental cars are equipped with GPS units that allow rental companies to monitor the locations of their cars. Those units operate whether or not you, as a driver, ask for the rental company's GPS guidance option.

Rental companies have used these GPS units for other purposes. In one highly documented case, a rental company charged a driver $150 each time the car exceeded 79 miles an hour for more than a minute or two. The driver racked up several $150 "instances." California, New York, and possibly some other states have enacted laws prohibiting rental companies from using GPS information this way, but you can't count on being exempt anywhere else.

Most rental contracts include a few other prohibitions. Most are sensible and obvious, such as no DUI, no excessive speed, no racing and such. Two fairly common prohibitions, however, might cause some problems:

• No drivers other than those signed on as "additional drivers." Unless the contract specifically allows it, this can apply to your spouse, parent or adult children. It might also be applied to a valet parking your car, although this seems to be a rare problem.

• No driving on unpaved roads. You never know when you might encounter an occasional stretch of unpaved highway in rural areas but, at least in theory, you shouldn't drive a rented car over it.

You run risks if you violate those provisions. The bottom line: Before you buy into a rental, check for any such limitations. Either abide by them or find another rental company.

Ed Perkins is the former editor of Consumer Reports Travel Letter.