Illustration of a car being depicted as a piggy bank and a person putting coins in it

When Stan Carpenter picked up his car from Dollar Car Rental during a trip earlier this year, he thought he knew what he'd have to shell out.

But two months later, he received a letter from Dollar informing him that he owed $15 for using a toll transponder, a small device mounted to a car’s windshield that automatically pays road tolls, even though the one toll he drove through cost $1.70.

The 70-year-old retiree says that when he rented the car, there was no mention of a fee for using the transponder, though he did later find an "administrative fee" for $15 included in his rental car contract. 

“The agent talked about insurance, asked if I wanted to get fuel before returning the car, and provided a number of disclaimers, Carpenter says. "After all that, there shouldn’t have been any surprises. If I knew it would be $15 instead of $1.70 for using the transponder, I would have sat in traffic a little longer."

More on Unexpected Fees

Lauren Luster, Dollar's communications manager, says that Carpenter may not have been properly informed about this fee by the agent when he rented his car. But she also says the transponder fees and other administrative fees are clearly stated in the rental agreement and also displayed on the company's website and on written signage and digital materials at the rental counter.

Fees and More Fees

It's easy, though, to miss such notices or not read terms buried in the fine print of rental contracts. And there can be a variety of fees that come by surprise, including esoteric charges such as a "vehicle license fee," an "energy surcharge," and a "facility fee."

Car renters could also have to pay more common charges such as a "drop-off fee," if you return the car to a different location than where you picked it up, or an "early return fee," if you return a car early. There could also be an "additional driver fee," if you add more than one driver to your rental agreement. (Note that some car rental companies will let a spouse or domestic partner drive at no additional charge in some locations.) 

When we recently asked Consumer Reports members about the fees that bother them most, many complained about such unexpected rental car fees. Some also cited local taxes and municipal fees, which they said drove up the cost of a car rental far beyond their initial estimates. Others complained about perennial problems, like rental agencies’ high fuel costs and insurance fees.

Their biggest car rental gripe, though, was about the toll transponder fee. 

Transponders are usually presented by the representatives of the rental car companies as conveniences that will pay for themselves, says Philip Reed, an auto expert at financial site NerdWallet. But that's just a sales pitch, he says. 

Members pointed out that the toll transponder fees were far higher than if they had just paid for the tolls in cash or if they had thought to bring their own transponder, because using it would entitle them to a toll discount. 

However, bringing your own transponder is not always even an option, because not all states and regions of the country use the same transponder system, and some car rental agencies may still charge you a fee for using your own.

Because there’s no uniform fee for toll transponders in the car rental industry, consumers need to read the fine print. Dollar, for instance, says its toll transponder daily fee varies by region, but consumers who don’t agree to use the service will be charged a $15 administrative fee if they drive their rental car through a toll, which is what happened to Carpenter.

Hertz (which also owns Dollar and Thrifty) says consumers who rent from a Hertz car rental facility will be charged a daily $5.95 “convenience fee” when tolls are incurred, on top of undiscounted toll prices. Avis, for its part, charges a $3.95 daily fee.

When it comes to renting cars, "consumers have to be particularly diligent as the price quoted rarely seems to bear any resemblance to the price charged when the car is returned at the end of a trip," says Anna Laitin, director of financial policy at Consumer Reports.

Though state and local fees will be similar regardless of which company a consumer rents from, Laitin says the car rental companies all sell add-ons and have fee structures that make it hard to comparison shop or to know what the final cost might be. 

To highlight these kinds of hidden expenses and to help you avoid them, Consumer Reports has launched a program called “What the Fee?!”  (You can find out more about our efforts at WhatTheFee.com.) 

Tips to Keep Fees Down

There are ways to reduce the chance that you'll be charged additional fees.

Check toll charges along routes you'll be traveling.  Because of the variation in fees, research the rental companies’ policies and determine whether you'll be driving on toll roads. You may decide that it’s worth the fee to get a transponder to avoid delays at tollbooths, or—if you don’t expect to drive on a toll road—you may want to skip getting this service.

If you have your own toll transponder that works in the region where you'll be traveling, you may want to tuck that into your luggage. In some cases, you are supposed to use a transponder only with the car it was assigned to, but ask the car rental agency whether you can use your own transponder and whether doing so will still result in an “administrative” fee.

Consider what extras you need and how much they cost. Like airlines, rental car companies offer plenty of extras that come at a cost. You'll probably pay more for child car seats, GPS service, and satellite radio, for example.

Think about fuel expenses.  Generally, it’s not worth the cost to prepay for fuel because you’ll pay far more than the market price. Instead, ask the car rental staffer where the closest gas station is to your return location and plan for extra time to refuel, says NerdWallet's Reed.

Check whether you're already insured. Many consumers will be covered by the credit card used to rent the car or by their personal car insurance. But there are some exceptions when it might make sense to buy extra insurance, because some card issuers have pulled back on offering rental car insurance coverage.

Consider renting a car outside the airport. Some airports levy fees on car rentals called “customer facility charges,” which can add up to $10 per day on a vehicle. Consumers can avoid these fees by renting cars from a downtown office, for example. But if you’re flying into an airport, that can add hassle and time to your trip.

“Anytime you hear about a fee, your antennae should be up,” says Reed.  Before you rent a car, research whether you’ll need any of the extras car rental companies often offer. Knowing your needs will help you avoid paying unnecessary fees, he says.