California Rental Car Company Overcharges for Accident Damage Waivers

Civil Code section 1936 was primarily designed to protect consumers against rental car company overcharges for collision damage waivers--defined in the statute as "a rental company's agreement not to hold a renter liable for all or any portion of any damage or loss related to the rented vehicle, . . . or any storage, impound, towing, or administrative charges" (Civ. Code, 1936, subd. (a)(4))--and for the cost of repairing cars damaged during a rental. The statute does, however, touch on a variety of other rental car practices. Subdivision (m)(1) of section 1936 provides that the only charges a rental car company may mandate as a condition of leasing the vehicle are the rental rate, taxes, and a mileage charge, if any. However, subdivision (m)(2) of section 1936--the provision with which we are here primarily concerned--does permit a rental car company to impose additional charges for optional services if the renter knows the charge is avoidable. In material part, subdivision (m)(2) provides as follows: "In addition to the rental rate, taxes and mileage charge, if any, a rental company may charge for an item or service provided in connection with a particular rental transaction if the renter could have avoided incurring the charge by choosing not to obtain or utilize the optional item or service. Items and services for which the rental company may impose an additional charge, include, but are not limited to . . . charges for refueling the vehicle at the conclusion of the rental transaction in the event the renter did not return the vehicle with as much fuel as was in the fuel tank at the beginning of the rental. . . .".