As many of you have bemoaned, your credit card's automatic car rental insurance will not cover the rental of pick-up trucks on Bonaire or elsewhere, and may not even cover SUVs or the like.

Well, I just got a mailer for American Express that offers "premium car rental protection" (zero deductible too) and covers theft, damage, etc., for a flat fee of $19.95 per rental (up to 42 days contiguous) and it covers rentals in the Netherlands Antilles (but not in Jamaica, Australia, Ireland, Israel, Italy, or New Zealand, in case that matters).

With this plan you would waive all collision/theft surcharges on your car rental agreement (liability insurance is not covered however - that's separate), and instead let AMEX cover you.

I just signed up for it because it's a lot cheaper than the $10-20/day I'd have to pay for CDW etc. when I rent cars in the U.S. (I don't usually rent on Bonaire since I own my own cars here :-) )

One note however - if you are renting a car on Bonaire or elsewhere, and you do this sort of thing, you will still be liable to the car rental company for damage to your rental, which would then be charged to your card, and then you'd have to have AMEX work it out for you with the car rental company. (They had done this for me once in the past when someone broadsided my rental car in Las Vegas about 12 years ago - went fine.)

If anyone's interested in this, the number to call on the American Express letter I got was 1-800-858-5947, and you should mention code 5FK. They may ask you what rate you were quoted in the letter (there are two - $19.95 or $24.95 - tell them the lower one :-) )

Jake

A note, Jake... "Work it out for you with the carrental" only goes so far in that we respond to challenges to the charges. If a customers contests the charge, Amex will contact us and we will show them the charges due. That is the ONLY time we will deal with Amex. Even if we wanted, there would be no other way, because they are impossible to contact.

I should also point out that if this is going to be a cause of trouble or loss for us, we may have to decide to decline Amex all together.

Marc
Manager, AB Carrental

Marc,
I take except to your charge that AMEX is hard to contact. They have international numbers accross the world. Where in the new coverage plan offered by AMEX do you see a loss. They are providing the insurance. You are covered by charging the damages to the renters card and then the renter must go through AMEX to get a refund of those charges.

With your opinions, it seems the rental car businesses and the thieves of Bonaire attend the same meetings. Please try to remember who supports who!

Marc,

What I meant about "work it out" was that at least in my experience, AMEX insurance investigators worked to ascertain who was at fault (it was the other guy) and then arranged to have his insurance pay for the repair of the damage to the vehicle. Had I been at fault, AMEX insurance would have paid the bill themselves. I religiously use AMEX baggage insurance on all my many travels, and fortunately have not had to use it in several years although when I traveled ALM, I put the insurance to good use for delayed baggage, and AMEX was always prompt to pay.

I would expect that were damage to occur to a rental here on Bonaire, AMEX would request a fair appraisal of the damage and cost to repair, and settle that amount to the rental company, thus reversing the charge the rental company imposed on the renter's card to cover such repair.

The AMEX policy does not cover punctured tires, as best we can tell, although I think some Bonaire rental agencies offer insurance that does (I may be wrong though).

However, the AMEX policy does appear to cover vandalism to a car (such as a broken window), but doesn't cover theft of personal items out of the car (no car insurance I know of does that - you need that hard to find stupidity insurance when you leave valuables in a car in a deserted area).

In any event, folks who have questions about this insurance as well as that offered by car rental companies should inquire directly with those sources to make sure they know exactly what is covered and what is not and not take my word for it.

Jake

I have used this Amex Premium Car Rental Protection on my last two trips to Bonaire -- luckily I have not had to test it out. There is one aspect of enabling the insurance that I'd like to share. The insurance is typically enabled and your account is charged the $19.95 per trip whenever a they see a car rental charge. However, if your car is included as part of a package at a resort (for example, Buddy Dive's Drive and Dive package), Amex has no way of knowing that you are renting a car and therefore does not charge you, therefore the insurance has not been enabled. What I've done on the last two trips is to call Amex once the charges from the resort (eg. Buddy Dive Resort)have appeared on my bill, and tell them that this charge includes a car rental. Both times I've gotten bounced around on the the phone to several departments at Amex and had to ask for a supervisor, but if you hang in there and get the right person on the phone they will acknowledge it, give you a reference number, charge $19.95 to your card and thereby enable the insurance coverage for your trip.

One other important point: this premium car rental insurance DOES cover the small pickup trucks that seem to be the norm on Bonaire; most other insurance coverage does not.

Marc,

Are you saying that if too many people use their AMEX at AB and cut you out of your insurance premium that you may begin to decline AMEX cards?

The AMEX coverage is substantially more favorable to the consumer in both rates and coverage than the package you provide..especially considering the claims most likely to occur on bonaire...I'm glad to see the competition for the insurance business

I wonder what business you are in

Jake,

thanks for the heads up on the amex...I might finally break down and get one....my business insurance underwriter dropped their PU truck coverage recently so I was forced to purchase local insurance...what a rip off; especially when you read the fine print regarding what is covered (most importantly what not is covered) and the deductables....

Ric, about your comment you can reach Amex all over the world ... and I speak as a Amex customer, not a business owner, as we use also for private things Amex(we travel also...)... try to talk to Amex from Bonaire !!! In general you get a machine ... you push 1, 2 or 3 whatever, you get another question, you push 1, 2 or 3 or whatever, and on a certain moment, they want your social security number !!! We are not the US and we don't have a social security number !!! If you just push something, you get somebody who does not can or does not want to help you, and in general you end up in Mexico ... my English husband has problems to speak English with them, I (German) will never try it again.... If you are very lucky, they give you a real phone number in the US ... not an 800 number, because that does not work from our private phones, and than the game starts all over again !!! Costs for the telephone calls on us of course !!
We did not had a problem yet with an Amex card as a business, but I would think we would have the same wonderful time .....

Brigitte,

I'm a client of AMEX in the U.S. (my billing address is up there), and they provide me with a non-800 number I can call collect from anywhere in the world (and I occasionally do that from Bonaire).

Do you have an Antilles-issued AMEX card (I know MCB is involved with them in some fashion)?

Jake

Jake, I will tell Richard to have a look at your reply, I just don't know. I only know that there is an enormous problem to call them ... even just to tell them we are going to travel to p.ex. the DomRep, otherwise they make a problem to honour the card ... not much fun ...

Let me be as clear about this as possible. We don't deal with Amex or any "insurance" company. Period. If you do damage to our car, and you don't have our insurance, you pay that damage. The rest is up to you. We have NO obligation to help you prove to Amex that you're entitled to get your money back. We will provide you with as much paperwork as we can, but only as a service. *That's where it stops for us*. So no, I'm not even going to try to call them. I don't have the time to get bounced around between departments (never mind the cost of that to us); I'm willing to send e-mails, but try to find an address anywhere (I've tried).
Gregg, I'm in the car rental business. And that's more or less the same the world over, even in the US. Our cars are self-insured, which means that the gains from insurance (or waivers, as it has to be called in the US) has to cover ALL our repairs and maintenance. The margins are simply not high enough to sustain this business just on the rates. If everyone would decline our insurance, we'd go out of business, so we'd have to raise the rates (substanstially). Besides, I don't see the problem. What business is a credit card company in? Not insurance, I'll tell you. They will have outsourced that coverage somewhere, and they make a profit out of YOUR damage by cashing their 5% commission off the damage amount (at a loss to us, because we are not allowed to add that commission to the bill).

And by the way, at least we *do* still take Amex, unlike some of our colleagues.

Ric, I'd much like to get an apology from you for implying I'm a thief. I'm a businessman, and at least I'm honest about it.

A few things Ric:

One, I am amused that Marc, who is Dutch, is more skilled than you, a native english speaker, at writing cogent english using properly parsed words and proper punctuation. My apologies if you are in fact an alien, typed using a pencil in your mouth, or if you were raised by wolves.

Two, I wonder how many places in the world you've tried to call AMEX from, I know from personal experience that is is not always as easy to do as you seem to think. Bonaire is one of those places. 800 numbers don't work form Bonaire, for starters.

Three, are you at all aware of the costs to businesses of taking your AMEX card? You should be. As Marc says, it is usually five percent.

Four, your uninformed parochialism is only exceeded by your insulting arrogance in smearing Marc's name and alleging he is a thief.

Fifth, the man tells you his policy. If you don't like it, rent elsewhere. Cast your vote with your feet, not your mouth. I am so sick of people who think they know how other folks businesses should be run. I've never met one of them who had ever run so much as a lemonade stand.

Jake, thanks for the heads up, I will use that insurance this weekend, I think. In Ireland, none of the credit card companies will cover you anymore. Oh yeah, and even when you take all the rental company insurance, you are still liable for tires. And wheels too. Trust me, I know.

I think ultimately, we're talking about gambling with insurance anyway: we as car renters can either take a huge risk (decline CDW and, in AB Carrental case, the extra insurance), and gamble that we won't get into an accident or be vandalized. That costs us nothing extra if we win, but could cost a LOT if we lose.

We can also gamble by going for the AMEX option: it costs 19.95 per rental, but if any thing happens, yes, it'll go on the card, but it'll be taken care of by insurance. So, we're out 19.95 whether or not anything happens.

With CDW and extra insurance (which you alone offer I believe), every day costs what, 18.00 extra? Every day, we gamble whether or not there will be an accident or vandalism. If nothing happens, we're out almost 130 in one week.

Before we didn't have an option, so my feeling was, it was worth it. Have we ever had to use it? No, so that was money that went straight into AB Carrentals coffers.

Now that there's a cheaper alternative, we'll go with it. If we need to use it, it may be a bit of a hassle, but... I'll gamble that we won't.

Amazing what I unintentionally started here. Just goes to show that there are at least two completely divergent viewpoints on every issue (and usually dozens of variations on those), no matter how mundane it might seem to the masses.

Jake

Having rented a vechicles on every trip to Bonaire ( as well as allover the US), I have always declined the insurance, and yes maybe I am taking a chance, however.. one note... for those who do get charged for scratches and dents & who have taken the insurance or declined, have you every wondered what the rental companies actually do with the money from the claims .. as I have noticed there are many rentals on the islands that have scratches and dents all over them.

Seb,

We're so proud of your use of the English language and will benefit from your systematic grading of my post to this board. It seems you are a mastur "de" bator. The fact remains that Bonaire's car rental business insurance policy is a rip-off. In the past we as travelers had the choice of taking the rental companies policy or not, now we have a third alternative and the current owner/managers are threatening to not take AMEX. Why? Is the fact that we have choices their concern or the fact that they might lose those insurance dollars. Either way, I as an alien like to have choices in any marketplace. You as an English major and most likely a Democrat will never understand the free marketplace. If the owners/managers seem to be against a new option that benefits their customers over the thief's of Bonaire, we all are entitled to make our own conclusions. If the car rental companies have not included the cost of processing the AMEX cost into their cost of doing business then they need to revisit "How to operate a business" or just listen to you, since you are the expert on the subject.

Even you as a lemonade stand owner can comprehend the fundamental principals of mark-up.
I can hardly wait to peruse your reply!

Susan, Jan, Ric,

I agree with your comments completely...although this subject has come up numerous times, this is the first time I've heard a Car Rental Operator admit that they depend on the insurance premium to operate their business profitably. I applaud Marc for clearing this up this point. There are those of us who suspected it all along based on the high price of the insurance. In effect, the insurance is simply a back door price increase. The consumer always had the option of declining and taking a risk but the warnings and prediction of doom by the rental companies scare people into paying ~50% of the daily rate of the car as insurance to cover the incidences that rarely happen in Bonaire (the "big one"). Very few of the typical damages which occur in Bonaire are covered by the insurance (vandalism, theft of tires, flat tires, scratches, dents). The deductables are also very high...I'd be curious to see what the ratio of actual payout of insurance is to the income from the premiums. I doubt if the monies customers pay for the minor dings/scratches are ever used for repairs (as evidenced by the condition of the available vehicles). AMEX is surely allowing an outside insurance company to underwrite the insurance. The price of their premium $19+ per rental (not per day) truly exposes what the real costs are to support the losses. Hats off to AMEX for providing a consumer oriented option.

WOW...Jake, thanks for posting this...I'm calling AMEX to sign up now :-)

Gregg, the only reason they can do that is because they have the numbers and volume on their side. We do not. And you're wrong on vandalism and theft of tires... they are covered by our Full Insurance at no deductible. Yes, the money does get used for repairs. Without it, repairs and maintenance would have to come out of our rates and that's simply not doable. At least now you have a choice. We could just as easily up the rates by $20 and be done with it.

Ric, as to your "why", I've explained that. If you consider that a rip-off, fine, go somewhere else; that's the free market place. Do you think Amex is offering this out of the kindness of their hearts? Get real man. FYI, including the commission into the bill is not allowed by the BCCC (big credit card corporations) at the penalty of losing your merchantship. Oh, and thanks for still calling me a thief.

Marc, your assumption of what I called you is just that!

Marc,

Like I said, I appreciate you standing up and explaining that the rental companies in Bonaire depend on the back door revenue obtained from the "push" of the insurance. Even though that subject has been discussed numerous times on this site, this was the first time I've heard you make that type of statement. Personally, I'd rather the rental companies build all of their cost into the daily rental rate so that everybody knows up front what price they are truly paying. AS you say, each customer has the priviledge of taking their business elsewhere if they don't like the "deal".

If I misrepresented what your insurance paid for, I apologize. In other words, the consumer has to purchase both levels of insurance to cover these items...at those rates, each consumer who buys the insurance for week pays for at least one new tire per week. How do you pro rate the cost of replacement of a tire? especially if there is little tread and has dry rotted sidewalls

I applaud AMEX for providing an option that is in the BEST interest of the consumer. It doesn't matter to me that AMEX is a large company that can afford lower priced blanket policies. AMEX is competing for the consumer business with other large CC companies. Competition is grand when it is allowed.

I suspect that AMEX's insurance provider makes their profit from a preponderence of short rental periods - their risk grows by orders of magnitude for long term rentals, I would suspect, but there are far fewer of those.

Jake

Ric,
"The fact remains that Bonaire's car rental business insurance policy is a rip-off."

Says who? How did this become a fact? Got any proof? Any observations to back up your name calling? Personal knowledge of the car rental industry? Travel agent experience?

Lets see the data that lends such sureness to your rant.

Hey, guys, enough already! Step up, moderators, and moderate this for the majority of us. Let these folks email each other direct to have 'their' fun.

I think the important part of Marc's comment was "self-insured". As a business owner he has to put up with some unfixed scratch and dents that lowers the cars re-sale salvage value. He also buys a few dozen tires, half a dozen windows, gas caps, filler hoses, radios over the life of the asset. I suspect the life of a car rental in Bonaire is 4 years. I would think his margin over vehicle cost, repair and maintenance should be in the 40% margin. After rents, salaries, taxes, other expenses, etc. he should be trying to net net a clean 10%.

Let's do the numbers.
Initial purchase price Mazda 2200 w/ AC …..$18,000
Import tax..............................................$ 5,400
Maintenance 4 yrs.total 40,000 @ $.04……...$ 2,400
Tires 8 at $120 each.................................$ 960
Other repairs, vandalism self insured etc…….$ 4,000
Annuals fees, tags etc..............................$ 2,000
Major repairs, 4 over 4 years at $750 each….$ 1,500
Total.......................................................$34,260
Salvage value at end of 4 year life..................$ 6,500
Final Vehicle cost............................................$27,760

Cost per week (80% rental rate, 4 years)……$ 166.27
Rental Rate with CDW………………………$ 287.00
Gross Profit Margin before expenses………... 42.1%

Good so far.

Now let's say Wally gets into a really good batch of hootch at Lac Cai and launches his vehicle off the conch hill and does a really nice rendition of a NASCAR triple flip through 5 parked cars. Now let's say Eva had left Wally 3 months earlier, emptied the check book, sold the house and canceled all insurance policies (except the one the bank has on him), and took his great great grandma's quilt and favorite dog. Also, one of the destroyed cars was a big time LA lawyer's rental car and his fancy dog was sleeping in the back seat (and now has a limp and a nervous tick). Yikes

I sure hope you are carrying some decent re-insurance to protect your top side because the way I crunch the numbers...other then the benefit of living on Bonaire you are basically making a decent living and recycling a lot of used cars into the local populace. I suspect one little tick down in rental percentage utilization and you are not drawing a pay check that month.

Do the Dutch version of incorporation and put the house in the wife's name....there could be a Wally out there with your car.

Also don't respond to my numbers...I suspect cost are higher and utilization rates are lower. This was just a number crunching exercise for the gainfully (non-business owner) employed. I didn't draw a paycheck from Sundance for the first 16 months....I lived on refinancing my house and credit cards...took 4 more years to get out from under those rocks. Self made self employment is sooo easy....everybody should just give it a whirl.
The bright side is my wife dumped me in those days....and I meet Eva....funny how the best things in life happen to you in the hardest times.

Oh, by the way, I've been away for a few days....hurricanes have slashed 30% of our business so the scamble is on again....just like old times....what did I miss?

As a merchant who takes AMEX as well as Visa and Mastercard, I wanted to make one comment about a statement made in this thread. The cost of taking American Express cards is NOT NECESSARILY higher than taking Visa or Mastercard. AMEX tends to charge businesses higher rates to start, and lowers them later when you show a pattern of good business practices and few chargebacks. At the present time, I pay about the same rate for Visa, Mastercard and American Express.

Another point to consider about the charges paid by merchants: they're worth the price. If someone pays me by credit card, I have the funds within a day or two. If they pay me by check, I might get the money in several days. With the credit card transaction, I've gotten the use of the money in the mean time. I also save in trips to the bank to deposit checks (we don't take in much cash), and risks and overhead associated with handling of same.

Glenn,well said. It seems that Marc has no problems promoting his employers busineess on the newsgroup, which I may add Jake seems to allow...hmmmm, Also, where are the ethics when an employee publishes inside information (re beeing self insured, also financial workings of the company, etc.) If I had someone who worked for me and posted such info on a public forum, they would be pounding the pavement. Marc....if you want to respond,please call me rather than post publicly if you wish to disucss "ethics in the workplace" further.

Michael,

You have an odd sense of what self-promotion entails...

Jake

And so do you!

Easy on!! Easy on! What are they putting in the water down there these days???

Don't know, Glen. I've got a water filter on mine here in Belnem.

Dan - U.S. merchant rates are a fraction of what's charged on Bonaire - merchants here pay 4-6% for all cards - that's 2-3 times what merchants pay in the U.S., at least.

That said, I'd rather get paid with a credit card and pay a fee than lose the business (and not get paid at all). I wrote about that in an article about 10 years ago (three years before I moved to Bonaire, and 2 years before I had even heard of Bonaire). See:

http://www.richterscale.org/garage/garent-2.htm

Jake

Thanks, Dan - I was wondering about that (comparative prices of AMEX vs other CCs)

Wally, your "breakdown" seems wrong, and despite the fact that you say "don't respond to my numbers", I'm going to: you put them out there, and people will read them as fact.

You have the costs for four years, and the rental fee for 1 week.

Take that rental fee, multiply it by 52 (assuming it's rented every week - I realize that's not realistic) and you have $14,924. Multiply that by 4, you get $59,696.

Granted, there are a few weeks lost while repairs are being done after you and eva crack one up , so that amount is unrealistic. But even given the downtimes, I still think it's a fair ROI.

Factor in that as the trucks get more and more decrepit looking and feeling (I've yet to rent a "basic" vehicle in Bonaire that didn't give me the impression that the next good pothole and it'd be all over - and I've yet to rent one with a working handbrake), they're still being rented at what would be a premium price here.

A new arrival on Bonaire, renting a truck at 287.00 for the cheapest vehicle available, might have the expectation that they're going to get a truck that looks and feels like it's relatively new. When one of the typical Bonaire rental trucks is then presented to them, it's easy to see why someone would consider this a rip-off.

So it's easy to see why someone could percieve spending nearly 300 a week on a rent-a-wreck might be a bit perturbed.

Crap - I couldn't edit that last sentence, which should read something like:

It's easy to see why someone could perceive having to spend nearly 300 a week on a rent-a-wreck as highway robbery.

I enjoyed your article Jake. Also re merchants paying 4 6 percentpn credit cards. That becomes negotiable once you are established with a bank and have a decent track record..

Michael, we still pay 4.7% and I would think that Richard has after 32 years a decent track record ....

Did you ask for a lower rate!!??

Jeepers, people. I'm expecting James Blaha to chime in at any moment.

The Amex insurance is nice to know, but in Sept. '03, our rental agency wouldn't take Amex even though it was part of a package through a resort and everything else was on Amex. I was just grateful I didn't have to learn to drive on the left-hand side of the road.

Well, I was trying to rent a car for a few days in Curacao yesterday, and found that both Budget and National would not quote me a rate without additional theft and/or CDW insurance - they told me or indicated that "no insurance" was not an option.

I went and booked on-line with Hertz for Hertz Curacao, and the site showed all the insurance types to be optional and took American Express.

So, these issues exist elsewhere too in case anyone was wondering...

Jake

Hi Marc,

Just thought I'd chime in on this interesting and somewhat emotional topic with a dumb question.

What are you so upset about?

If I rent from you and run your car into a tree, you will charge my AMEX card for my destruction and they will pay you in guilders or farthings or USD or whatever the amount you have charged to my card. You will give me a proper receipt documenting ALL the costs and I will then be liable to fight it out with AMEX to recover my loss or just pay the bill when I get it. Other than your responsibility to give me a fair and honest repair bill, you are then out of the picture are you not? Now if it was your intention to give me an unfair and dishonest repair bill (which OF COURSE it is NOT!)THEN I would expect my agent AMEX to be in touch with you.

If Mastercard or VISA also decide that worldwide cheap car insurance covering ALL contingencies is in their best interests as well, will you then refuse to accept MC and VISA and only allow us to rent from you in cash, gold bars or precious stones?

Or are you just P.O.'d that the "free money" train (high insurance "premiums" paid to your company)is leaving the station? And if so, just raise your rates to reflect that income loss for those who decline your insurance plan.

Just wondering on a rainy Chicago Friday.

Hi Susan...I like the rent a wreak a robbery even unedited.
I was just wildly guessing at 80% rental rates (42 weeks a year)
I was also wildly guessing at what a vehicle cost on Bonaire. I think the import tax is a real fanny spanker though.
What I did was figured the cost of the vehicle for 4 years and then converted that to a cost per rented week (which probably isn't a good way to look at it) and then contrasted that to a rental income per rented week to get a gross margin on COGS per rented week. That analysis gives a gross margin per rented week but that doesn't help when we move to net margin after monthly expenses unless we again annualize the numbers.
Your way of crunching the numbers works out the same if we adjust to a 80% rental rate.

$287 x 42 weeks x 4 years = $48,216
Wild eyed guess at cost after salvage = 27,760
Gross margin over 4 year term = 42.5%

I have absolutely positively no idea what gross margins should be in retail, service or rental operations...I got a pretty good idea what they need to be in production fiberglass saltwater fishing boat manufacturing in the southeastern USA. How's that for a narrow field of view.

So if Uncle Bubba kicks the bucket and leaves me some jingle...and I decide to move to Bonaire, rent a kiosk at the airport and buy 10 trucks to rent.
After 4 years I sell them off and cash my chips in.
4 years gross off of 10 trucks is $204,560.
Now I pay 48 months of (per month)... helper girl($350), washer boy($275), rent($650?), power($75), water($50), re-insurance(god knows), pencils and paper, web site ads, booking fees, bank & card fees, 1 can of paste wax, etc etc etc ad nauseum....say that is $1800 cost per month...so for 48 months I spend on expenses $86,400. That leaves me with $118,160 for 4 years or a owners salary of 29,540 per year.
Making a living and living on Bonaire...but not exactly knocking it in the head big time.

I believe Uncle Bubba needs to leave me more money. I need enough inheritance that it takes about 10 years to squander it.

PS I meant for Marc not to respond as A. he shouldn't divulge, B. this is just an exercise in Biz101 because I'm bored and don't want to fix the roof on the shed, and lastly because it is not based on a single shred of any fact I can remotely back up.
Which is exactly how your Banker would look at it

Wally

Add another 25 cars to the total...the fixed costs of the vehicles would still be the same but the expenses would go down on a per vehicle basis....also, what if the vehicles are rented 5 yrs instead of 4....then add in the "mandatory" insurance premium at 50% of the rate of the rental....looks like a damn good business to me

the last car I rented had 75000 km on it, dry rotted medium tread tires, enough dents on it to qualify for demolition derby (including the top caved in)...I was afraid to leave the Divi parking lot...the rental company claimed that was the only vehicle available...I still can't figure out how one can put 75000 km on a vehicle in Bonaire

if the rental company is operating on a self insured basis, it has to mean that they believe they can make more money being self insured (otherwise, why do it)...based on the numbers, looks more like they are in the insurance business and rent cars on the side

Gregg, we have guests regularly who proudly tell us they did about 700km in 8 days ..... Í too have no idea how they do it ...
I think that the bigger car rentals use their cars 3 or 4 years ... the salt on Bonaire works fast !!!

$4200 per annum for a desk worker? isn't that like $2 an hour at a 40 hour week? $3200 per annum for a car washer? I know these aren't real numbers, Wally, but Bonaire is an island in the twenty first century, not 1952. Anybody who can find people willing to work for those wages could probably start a nice manpower business on the island.
Gregg, part of being self insured is that you can have your own rules, viz a viz having renters leave windows open, etc, that have become accepted wisdom on Bonaire. I do not think the non self insured companies can provide these same rules(car must be locked, windows up, etc.)

Seb's got a point. I think minimum wage for a clerical worker is about NAF 1500/month, plus a 13 month bonus (a standard for employers in the Antilles - so standard that it is figured into the tax rates), plus various employer taxes & premiums (figure about 25% above base salary), and I get a per employee figure of about $14K per year. And that presumes that all employees are getting only minimum wage even after many years of service, which I think it pretty darned unlikely.

Also "self-insured" is a misnomer. By law all cars on the road must have insurance issued by a a certified and registered insurance company. So being self-insured does not remove that requirement. Figure at least another NAF 500-1000 per year for the most minimal insurance per new vehicle (probably covers severe accidents and not much else) (I know full insurance for a new vehicle is about NAF 2000-3000, depending on the vehicle.)

Also, repair costs for vehicle, in my experience are about 3-4x what they are in the U.S. (witness the $69.95 muffler special at a Midas, and my having had to pay about NAF 350 (around $200) for a new muffler on my truck a few years ago).

Then there's the cost of washing the cars (not insignificant when you consider water prices on Bonaire and the fact that for quickest turnaround the car rental agencies tend to use professional cleaning services (we have two automated car washes and one manual one on Bonaire, mostly fed by the car rental industry).

And, resale value on pick-ups and mini-vans is relatively low because of how they get abused (like taking them to Washington Park). After 4 years...well, I would probably not buy one. Sedans tend to be in better shape after that time because they don't take as much diver abuse.

I suspect that without the optional insurance, rental car companies on Bonaire would probably not break even on costs, or maybe just break even. Keeping in mind that they are business just like any other, they need to be profitable to survive and justify their existence.

That's probably why 2 of the 3 car rental companies in neighboring Curacao refused to even quote me a no-insurance rate on their vehicles last week. They probably have to include the insurance to remain in business and solvent.

I suspect Bonaire car rental companies can't just jack up their rates to include those costs because then their rates would not comparable to other competing rental agencies on the island. It wouldn't be an "apples to apples" comparison any more.

Talk about being between a rock and a hard place...

Jake

My understanding, maybe wrong, was that for the additional insurance AB offers, the company is the insurer, they take the risk themselves for that portion of the overall insurance bill. How or if they protect themselves from that risk I do not know.
Bottom line is that if having a car rental company were a license to print money there would be more of them and the newer ones would be driving down the prices.

Jake,

not sure I understand your next to the last para...I prefer apples to apples comparisons...survival of the fittest etc etc...if the cost structures are the same for all rental companies in Bonaire, how do the companies differentiate themselves from their competitors...better vehicles? lower prices? better service? or, are they all the same?

I was referring to comparing net rates (without any insurance) to inclusive rates (with insurance included). That's apples (net) to oranges (inclusive) because most folk don't read the fine print to see that the latter include additional fees for additional services. Folks will just compare the numbers, and see that the rates from the company showing inclusive rates are noticeably higher than those showing net rates, and thus the folks with the lower rates get more business. Hence, unless there is a sudden market move on Bonaire by ALL car rental companies to start making insurance less than optional and start showing the resulting inclusive rate in quotes, Web sites, etc., you are unlikely to see any Bonaire car rental company advertise anything but the net rate, even if they expect people to take the "optional" insurance.

Have I confused you further Gregg?

Jake

Jake,

thanks for clearing it up....that was my feeling also...I believe the BUDGET price includes insurance but the AB does not include insurance. On the surface, as you say, AB appears to be a better deal. However, if you add the insurance at AB, I think the prices are a wash. Now that AMEX has their option, there is more incentive to go to the non mandatory insurance rentors...until as Marc says, they'll stop taking AMEX because it will cut into their profits.

Glad to see that Jake and Seb noticed my lowballs on the labor analysis. I also significantly lowballed cost of maintenance and repair, depreciation, insurance (Jake spotted that), rent and general office expense.

RandyP, for the most part, I want to point you to Jake's last post which did an excellent job of explaining the difficulties of our business.

Why am I upset? Let's say you plant one of our cars in a tree. The car gets toed to the workshop, which gives us a bill of $3000 dollars. I present this bill to you, and 9 times out of 10 that's where the upsetness starts... because most people will literally raise hell over such amounts. Of course, seeing that it was your responsibility, you do pay the money with your Amex card. Our bank account will then show something like $2860... so we're $140 short. Does it stop there? No, because I'm not counting (as we're not charging) the number of days that we can't rent that car. So you can easily add a couple of hundred dollars more to that (especially if parts are needed, which often have to come from off-island).
Of course, we'll also have to sit and wonder whether or not you're going to contest the charge, leaving us in the position of having to prove to AMEX that we did a legitimate business.

Michael, thank you for your concern on my moral dilemmas. Fortunately, my employer also reads these groups so he's fully aware of what I do. He doesn't always understand why I bother, but it seems that many of people appreciate my honesty and I get a lot of personal praise from customers, which makes it worthwhile.

Hi Marc,

Thanks for responding. I'm still a bit confused (nothing new I assure you-lol).

no matter WHO is providing the insurance if it's laid up in the shop for repairs, it can't be rented. So THAT part of the equation doesn't impact WHO provides the insurance.

And if you cannot prove that you are doing legitimate work, then any insurance carrier SHOULD contest the charges. Won't your present insurance carrier also want proof the work was done and the costs are legitimate?

As long as I'm covered by my carrier (let's just say that it's AMEX for now)I really don't have much issue with whatever the charges are. If I bought coverage from YOU and then you wanted to charge me extra $$$$ before I could leave the island THEN I'd have some "issues".

I am NOT familiar with your company's vehicles. The one I rented my last trip was ridden hard and put away wet, as they say. I strongly doubt it had seen much maintenance or body work since it was purchased new. Many of the rental vehicles I did see were in similar condition. they just didn't look like much of the unused premium $$$ were re-invested in them. Just my opinion.

If you would not be able to compete or be profitable if folks turned down your insurance because their credit card offered a better policy at a lower rate, then refuse to rent to them or inflate the rental costs. Then those who do not want to pay the seemingly high charges for your coverage won't be breaking your cars and trucks and causing you any grief or lost revenues. They will just go elsewhere.

I'm guessing that the free-market system will support several vehicle rental options, high end, low end and those in the middle. Tourists on Bonaire (and everywhere else they fly) ARE a "captive" market and at the mercy of the local merchants. It's not like we can pack our own transportation.

And everything I have written is just my ignorant and useless opinion which you should disregard in the first place. I do NOT have an AMEX card (not a high enough income to qualify) and haven't been on-island since 2002 (same reason as no AMEX). So what I think is of little or no import anyway.

Marc,

I am one of those who appreciates your candidness on this issue. I can make a better decision for me when I have all the facts.

I believe AB is entitled to make a profit and should set their rates to cover all the costs of doing busines. I don't think the issues you face in Bonaire are any different than the issues faced in other countries. The only difference is the cost. However, I do agree with Randy in most of his points. Once I turn over a claim to the insurance company, I don't really care what the cost becomes (unless the charges are deemed not fair and reasonable). The insurance company will pay. BTW, in the US, the insurance companies DO pay for loss of days rental. However, based on my experience with the condition of vehicles from AB, I suspect that your vehicles are rarely taken out of the fleet for repairs. I would consider it unethical for AB to charge for loss of days rental if AB doesn't actually take the vehicle out of the fleet for the actual repairs.

Would you explain to us what type of insurance AB does carry on its vehicles as required by law (per Jake's comments above)

Freedom of choice is what it's all about! I've been in the Ins Bus for over 30 years & I've rented vehicles on Bonaire for the last 20. NEVER have I ever purchased the CDW or other "add ons". So looking back in retrospect I've saved quite a few dollars.
I for one do not see the cents (sic) of paying $15-$20 PER DAY for this over priced coverage when I get it for free using my AMEX gold. Just be careful what vehicle you rent & check with AMEX prior to renting..Here's directly from AMEX..
Subject: American Express Consumer Cards Coverage


Thank you for your recent inquiry regarding the American Express Car Rental Loss and Damage Insurance Program. As requested, we have enclosed a Description of Coverage which fully explains the benefits and restrictions of this program. We recommend that you read all of the information, however, highlights of the program are noted below:

Use your eligible American Express Card to reserve and pay for the entire rental
Decline the car rental company's Collision Damage Waiver and Theft Protection
There is no liability coverage provided with your American Express Card
American Express provides Excess coverage to all other insurance policies
There is no coverage provided for vehicles rented in Australia, New Zealand, Italy, Ireland, Israel and Jamaica
Coverage is provided for vehicles rented for 30 consecutive days or less
There is no coverage provided for Loss of Use or Loss of Revenue
The Card member must be the primary renter of the vehicle
All additional drivers must be listed on the rental agreement
Cargo Vans, Custom Vans, Pick-up Trucks and moving vans such as U-hauls are not covered
Compact Sport Utility vehicles are covered, however, there is no coverage provided for full size sport utility vehicles such as a Ford Expedition
Please retain this information for future reference.>>

So, as I indicated earlier, it's really just a matter of choice. You decide. I for one am very happy with my choices.

I am in the dark concerning the $20 coverage offered by Amex. The post by Vince concerning the American Express car rental loss and damage insurance program states:
------------------------------------------
Cargo Vans, Custom Vans, Pick-up Trucks and moving vans such as U-hauls are not covered.
-------------------------------------------
I am back to buying the insurance from the car rental company because I will be renting a pickup truck.

Vince is referring to the free car insurance that comes with his American Express Gold Card. It does NOT cover pick up trucks.

The coverage that Jake started this thread off with is American Express Premium Car Rental Protection. Once you sign up, it costs $19.95 per rental (not per day) and DOES cover pick up trucks. I have signed up for this and used it to cover truck rentals in Bonaire several times now; I have not had to use it.

Hope this clears things up for ya!

Yana..Scott's right on this..FYI...Rather then renting the fullsize Toyota hi Lux, I find the suzuki Jimny 4 wheel drive is adequate for 2 people with dive equipment. The Suzuki would be covered by AMEX Gold (it's not a full size truck). If you have a party of 4 & need the full size Toyota Hi Lux Truck then investigate the Premium CAr rental Protection as Jake has indicated.
My posting above was specifically for MY AMEX Gold card which was issued through Fidelity Investments. Sorry if the post created any confusion.

I would like to thank Jake for bringing this to my attention -- I will definitely sign up. Even though complete insurance with Budget is "only" $11/day, $20 for two+ weeks (my typical rental) is a much better deal.

In the end, the market decides these sorts of issues. I am an AMEX customer -- they treat me very well but I know they are pretty harsh towards merchants (much higher discount, etc). As long as there are other viable options, a car rental business that refuses AMEX will not get my business.

My decision is made based on price, product and service. When I look at price, I look at the total (extra driver, any insurance I may want, taxes, etc.). One could argue that the business is saturated in Bonaire -- so be it. If AB cannot make money at their current rates (and rely on another profit center), that is fine. If that other profit center dries up and they increase their rates, so be it. But they will not get my business unless they best meet my product/price/service triad.

Note: I suspect it is very difficult to run a profitable car rental agency. As hotels (i.e., Buddy) offer cars that reduces the demand. The conditions are harsh -- how many of us have driven in the salt water puddles near shore? How many have rested tanks on the tailgate or driven through big pot holes? That said, the market can be very harsh. If someone will undercut you on price (because they run their cars longer, got a better price because a cousin worked for Toyota or have an uncle who will do the repairs for free, or they pay no franchise fee), as business owner it is hard to keep charging higher prices.

Jake,

Called and signed up for the AmEx insurance this morning.

They asked if I had gotten a letter, I said no that a friend of mine did and they said that was fine.

They asked if the quoted rate was $24.95 and I said the rate quoted in my friend's letter was $19.95 and they signed me up for the $19.95 rate.

Just wanted to say "Thanks friend"!!!!!

Belinda

I never pay for the CDW --- and a couple of years ago switched to a small van rather than a pick-up so that my MasterCard covers the CDW.

Everts has a very nice little van that's very convenient for tanks, gear, etc.

Josie

I vote we rent donkey carts. Wouldn't that be cool, cruising along with your gear in a little cart. Get to the dive site, put out a bucket of water and a bucket of oats and go diving. A good donkey would know the way back to town...Eva and I get get in the back of the cart and ....well you know.

But then will you have to pay extra for donkey poop bags since you don't want them pooping in the cart by accident. And then the whole thing starts again... LOL!

Marabeth, the actual issue there would be the liability of pedestrian accidents caused by the slippery poop on the street. PLI (Poop Liability Insurance) would be available, however it is advised that you read the fine print as some policies only cover poop generated by donkeys that dine on feed, not hay. Additionally, most credit cards will not cover four wheeled carts, only two wheelers. Amex is planning on offering Premium Poop Rental Insurance (PPRI) for certain cardholders.

Ahh - you are so right Scott - my bad. Pooping in the cart probably would not be covered as that is certainly the renters problem and NOT the problem of the rental company nor anyone else.

And yes, I can see where the PPRI would become a benefit for all except where AMEX is not accepted. I will anxiously await my letter from AMEX about my PPRI so that I too can take advantage of that savings. With 4 divers in our family it just doesn't make sense to use a two wheeled cart so coverage with any other card is just not an option. Thanks for heads up on the fine print - we will wait until we get there to make certain that we purchase the proper fuel for our 4 wheel cart.

Mara

I just called AMEX to register for the premium car insurance. They said that they DO NOT cover pick-up trucks of any size. Has everyone else gotten the same information from AMEX?

Yes indeed Maria. No pickups, some suvs, they generally cover the carryvans used on Bonaire, but not vans over a certain size.

My premium car insurance coverage expressly says:

" Coverage extends to luxury cards (worth over $50,000), pick-up trucks, full-size vans, and SUVs."

Ask for a written copy of the coverage for the AMEX Premium Car Rental Protection plan.

Jake

Ummm, that's not true.

We asked specifically about trucks, and as Scott Phillips says above:

---

quote:

One other important point: this premium car rental insurance DOES cover the small pickup trucks that seem to be the norm on Bonaire; most other insurance coverage does not.

---

Hello,
Im traveling to Bonaire for the first time in January.Im a single dive traveler and am staying at the sand dollar condominiums.Ive reserved a truck through sand dollars package rate.After reading through this very informative message board,I have a few questions maybe someone can assist me with.First of all,is it wise to rent a truck to access the dive sites or would a car be sufficient?I normally rent from one of the big rental companies like avis or hertz and decline the cdw, as im covered with my visa card.Im a little nervous going to a foreign soil,renting a truck and having to rely on the insurance they offer(as my credit card company doesn't cover trucks)It sounds as though vandalism at the dive sights is a situation to be concerned with?I guess my question is : Is it better to use the rental truck offered in the package deal from sand dollar condos and use the cdw they offer? Would there cdw cover all acts of vandalism and damage to the truck in case of an accident? Or: should I not use the truck offered in the package by sand dollar and rent a car from avis or another american company,pay with my visa,decline the CDW at the rental counter in bonaire and be covered by the insurance visa offers when you rent a car? Thanks very much in advance for helping me out with this question....Mike

Michael:

Choice of Car: While a car will work fine, I find a pick-up easier as it has improved clearance and a nice place to kit-up. I know many have used the vans (they look like a toaster to me) or a Suzuki Samurai without a problem. *If* you want to go into the park (which I always enjoy doing one day each trip), I think a car is simply unsuitable given the clearance you sometimes need.

In terms of insurance: be sure you understand what your coverage is and any gaps you might have -- all insurance is not created equal. Read the coverage contracts.

If you rely on Visa, be sure you understand any limitations (certain vehicles and countries are often excluded; be sure that vandalism as well as theft as well as collision are covered; understand any deductibles).

If you use insurance provided by the car rental agency, be sure you understand any limitations. FWIW: I rented last time from Budget and for $11/day got pretty complete coverage (vandalism, theft, collision, although the deductible was $300.) That said, I know at least company provides collision seperate from theft/vandalism.

In terms of car rental companies: You should be aware that most of the "big US companies" in Bonaire (as in other non-US locations) tend to be locally owned franchises. For example, Budget is a locally owned franchise. I personally have no reservation using either a franchisee of a US company or a small local company.

Vandalism does happen but, in more than 20 weeks of car rentals, it has never happened to me. And I really don't worry about it. BTW, as far as I know, any "vandalism" is really part of an attempted car prowl. My advice: a) If they provide the club, use it (if not, don't worry about it); b) Leave *nothing* of value in the car; c) Leave the doors unlocked and the windows down; d) Try and figure out a way to secure the spare tire if you use a p/u (some come with a padlock); e) at night, if possible park in an area with some lighting. These are the same rules I use in parking at hiking trail heads here (well, except for the windows down -- I do live in Washington!)

So, in the end, I would:
a) Figure out how much the truck at Sand$ is costing you w/their insurance. Be sure the insurance covers the big three (collision, theft, vandalism) and the deductible is something you can live with.
b) Compare that to a truck from another provider w/their insurance. Be sure the insurance covers the big three (collision, theft, vandalism) and the deductible is something you can live with.
c) Compare that to a car w/your Visa coverage.

One other tip: I often fly American Eagle. The schedule is such that you arrive late (8pm or later) and leave in one week plus about 12 hours). So what I do is take a cab to my hotel and then have a rental car dropped off the next day. This way I pay for only the week rental (that extra 12 hours can easily be $30), get to my hotel fast (no waiting in line) and I get the car the next morning when I am less tired and it easier to inspect the car.

I got a written copy of the AMEX preminum insurance and you guys were RIGHT! The written document says they DO cover pick-up trucks. The AMEX lady on the phone was obvioulsy misinformed. Thanks for all your help.

I have found that the people you get on the phone at Amex are frequently very misinformed on the Premium Car Rental insurance. As I related in a post above, be very careful if you plan on being covered by the insurance if your rental is part of a package and not done thru your typical car rental company. It will likely take repeated calls and requests to speak to a supervisor before you get the right answers, but IMHO it is well worth it -- 20 bucks versus sometimes hundreds everytime you go to Bonaire.

I have rented a Toyota Hi Lux on three different trips to Bonaire and they were practically new. And without it the charm and dive sites of Bonaire would be very limited. There is a price to pay for our adventures in Divers' Paradise and the ease of driving over walking around the island is one we all can afford. Marc I don't think you're a thief.
Best wishes from a mid-west Yankee!

I called AMEX and asked if they would cover donkey carts. They said they would, but only if the carts have a donkey diaper to avoid the poo-tential liability

Well, one point I would like to make here is that I haven't noticed anyone saying that instead of being "hit" for dings and scratches etc DO A VERY thorough and DOCUMENTED inspection of rental vehicle before you sign/seal/charge and take delivery! I mean, it is liking signing an apt. lease, if YOU didn't put the holes in the closet doors to hang stuff on etc then YOU shouldn't have to pay for them. The truck a friend and I rented last Dec on our trip to Bon (and we are returning this Dec hooray!) had many deep dings and scratches through paint surface etc. We wrote them all down in each other's presence AND in the presence of the rental agent (who may have been less than thrilled with us but.....).

I do appreciate the AMEX info...I've always declined their card.....may look into it. Thx!

v.

While that is all very good, when someone is completely dazed from a long flight and stuck standing in a short line for hours in the hot sun (no one could accuse the car rental people in Bonaire of being too hurried), your brain may not be able to handle that task. I know ours weren't.

Plus, with the AMEX plan, you can save hundreds of dollars right from the start. Without it, CDW and optional "extra" insurance costs nearly $20 a day. That's almost $140 for one week, vs. 19.95 or 24.95 for the entire rental period. Stay longer, and the cost savings are even better.

And if they say I dinged the car, they'll have to prove it to AMEX.

I know someone who wrecked a pickup while we were both in Bonaire. No damage to the pickup which rear-ended a Toyota. The rear of the Toyota was smashed. I saw the Toyota and would guess the repair bill in the U.S. would have been between $2,500-4,000. They took it to a shop which bid $550.00. The driver of the pickup told me the local driver said she thought that was too high and she would try to get a better price. The repair ended up costing less than $300.00 That one experience suggests it costs way less to repair a damaged vehicle in Bonaire than in the U.S. I guessed that may be the case because labor costs are so high in the U.S. I also wondered if the rental companies couldn't get the work done for significantly less than most Americans are used to paying in the States. Just a thought.

This car rental insurance thread is quite interesting. Lots of qualified opinions and some very interesting view points on the issue. Certainly it sounds like a real expensive and involved chore to run a car rental business on the island.

My point in writing this note is for those of you who get to the island late in the evening after traveling all day and are not in the mood to do a thorough inspection of the rental vehicle in the dark. Use your digital camera to take about a dozen pictures of it (the rental vehicle) from all angles along with one of the rental agent you are dealing with. This can serve as a reference if there is a question about the condition of the vehicle at the time of rental return.

If you do not carry a digital camera on your trip. ..

Regards, Pag

I've continued this discussion on another thread, with more analysis of AmEx's Premium insurance and comparisons with both free credit card insurance and the costly on-island pay alternatives.

http://www.oldbonairetalk.com/newsgroup/messages/32/213001.html?1108738625

David