Rights for cancellation
If you buy products online, by phone or mail order you have the protection of the Consumer Contracts Regulations. But these regulations don't apply to certain leisure and travel contracts such as car hire, flights and hotel bookings.
So, if you decide you don't want your hire car after booking, your cancellation rights will vary between companies.
Unfair car hire terms
Some companies will allow you to cancel the booking and get a full refund, but others will give you little or nothing back.
It may seem obvious but it's important to read the terms and conditions carefully so you know what to expect should you need to cancel.
Cancellation policies must stay on the right side of the Unfair Terms in Consumer Contract Regulations, which ban unfair policies.
Under the Unfair Contract Terms Act any term in a contract that aims to restrict or remove the trader’s liability in certain situations can be considered unfair.
For example, it could be unfair for a company to charge you a hefty cancellation fee if you booked in a popular resort during school holidays when demand for cars was outstripping supply.
This is because the company may not have incurred a loss as a result of you not taking the car when demand for car hire was so high.
This doesn't mean the car hire company isn't entitled to make some charge though.
Even if the cancelled car could be easily rented, the company would still be entitled to charge something to cover its administration costs - as long as this charge was fair and proportionate.
Anything that appears disproportionate or too great could be challenged under the Unfair Terms in Consumer Contract Regulations 1999.
Be aware that if you got a preferential rate by taking a 'Buy Now' option there is normally a trade off where you agree to a higher fee if you cancel or don’t show up.