Imagine renting a car and being charged for damage that occurred before or after you drove it.

It sounds outrageous. But that’s exactly what can happen if you don’t take precautions, especially if you’re renting from a car-sharing service such as Zipcar.

Rental companies hold drivers liable for anything that happens to the vehicle during the rental period, even if the incident that caused the damage was out of the driver's control. Such rental car damage charges can occur when there isn’t a rental company employee available to examine the vehicle when you pick it up and again when you return it. If the company isn’t aware of prior damage or if something happens to the car after you drop it off, the company will assume the incident occurred on your watch, and you could be on the hook for some serious money.

This is a particular problem with car-sharing services, which allow members to pick up vehicles left parked on the street or in commercial parking garages and then drop them off when they no longer need it. Because the cars aren’t inspected between rentals, the car-sharing companies depend on the next renter to report any damage to the vehicle interior or exterior before driving it.

There are a couple of problems with this system.

Suppose the car already was damaged when you picked it up? You may have failed to report it because you didn’t notice the damage or didn’t think it was significant enough. If the next driver reports it, the damage will be attributed to you.

The same goes if you drop off the car and it's damaged before the next rental. Perhaps another car backs into it, someone vandalizes it, or the weather takes a toll on the car.

Zipcar Under Fire

Unfair and illegal damage charges were among the concerns cited by the New York attorney general in a recent settlement with Zipcar. The state accused the company of improperly charging customers without giving customers a chance to dispute damage claims.

“In one instance, Zipcar charged a customer $750 for scratches on a car before it even notified the customer of the damage,” says the attorney general’s statement. “When the customer complained that the damage had not occurred at the time of his reservation, Zipcar reviewed the file but refused to refund the money it had charged.”

Although Zipcar automatically provides renters with collision insurance, it still can charge customers for vehicle damage, currently up to $1,000, unless the customers pay $9 a month for even more coverage. From 2011 to 2015, it charged 5,000 New Yorkers for vehicle damage, the attorney general said.

Under the settlement terms, Zipcar must refund rental car damage charges to customers who picked up a vehicle in New York and then contested their responsibility for anything that happened to it. It also is barred from charging customers for damage unless those customers agree they’re liable or the company obtains a legal determination—for example, from a court—that the driver is responsible. It also must pay the state $35,000 in fees and costs.

In a written response to our questions, Zipcar said: “Under this agreement, it appears that only a very small number of members over the course of five years were negatively impacted by Zipcar’s damage process with respect to this statute, and Zipcar is addressing any such incidents in accordance with the agreement.” In settling the case, Zipcar did not acknowledge wrongdoing.

Zipcar has a record of being unresponsive to customers. As of late August, it had 67 unanswered complaints at the Better Business Bureau, which has awarded the company a D- rating, just one step above a failing grade of “F.”

But Zipcar isn’t the only car-sharing service that requires customers to inspect the vehicle and report damage before they start their rental or that can hold drivers liable for post-rental damage.

To avoid liability, Enterprise CarShare customers also must report pre-rental car damage before driving the vehicle, says Enterprise spokeswoman Laura Bryant. She acknowledged that there is no sure-fire way for them to prevent being charged for post-rental damage. But she said the company goes out of its way to give “the benefit of the doubt” to customers who say the damage didn’t occur while they had the vehicle.

Traditional Rentals at Risk

You also can face unexpected rental car damage charges for traditional rentals.

One way that can happen is if you drop off a vehicle when the office is closed. If the vehicle is damaged before an employee examines it, you’re responsible.

You also can end up being charged if an employee didn’t properly record pre-existing damage when you picked up the vehicle. That can be a particular problem with many airport rentals, which are inspected and then left for customers to pick up later unescorted. There’s no employee around to re-inspect the car with the customer present, and there’s no way for the customer to know if any damage occurred after the employee inspection.

What to Do

Avoid car sharing. Think twice about using car-sharing services. It can be risky.  

Report all damage. No matter what kind of rental company you use, inspect the car thoroughly before driving off and report any damage, a dirty interior, or other problems to the company immediately. If it’s a full service rental company, have an employee inspect the vehicle with you and note any damage beforehand. Have the employee inspect it again when you return it and insist on written confirmation that there was nothing amiss. If possible, avoid returning the vehicle when no employee is available.

Take photos. It may be inconvenient, but consider photographing and or videoing the vehicle inside and out before and after the rental. If the car’s electronic system displays the date and time, capture that as well (rental companies know that date and time information on digital photos and videos can be altered). Pay particular attention to any damage or other issues that are present before you begin driving.

Bryant of Enterprise says the company would consider photograph and video evidence in determining whether to hold a customer responsible for damage, but there’s still no guarantee the customer would prevail.

Check your insurance or credit card coverage. If you have collision coverage on your own car or use a credit card to pay for the rental, you may be covered for any damage, no matter when it occurs. Check with your insurer or card issuer before renting.

Buy the collision damage waiver. At a last resort, consider paying extra for the rental company’s collision damage waiver, which, in most cases, protects you from being charged for damage. But read the fine print first.