Renting cars and small passenger services

Check before and after you hire

When you rent a car, most of your rights and obligations will be governed by your contract with the rental agency. Before you sign the contract, check your liabilities – what you're covered for and what you're not (exclusions). You may also want to shop around for a better deal to reduce your liability.

You also have some rights by way of consumer guarantees under the Consumer Guarantees Act, as well as protection against unfair contract terms, and false or misleading advertising and conduct.

Checklist before you hire a rental car

• Find out what the total cost is, including rental, basic and excess insurance cover and any extra costs.
• Find out who can drive the vehicle.
• Check if can you get a refund for returning the car early.
• Check the fuel tank is full and find out the requirements for refuelling the car before you return it.
• Inspect the car thoroughly and insist on a written inspection report before driving away; give the agency a note of any existing damage that you can see or get photos.
• Check the terms and conditions and know exactly what you’re covered for and under what circumstances. You may get cheaper insurance cover for a rental from your own insurer, a motor vehicle association such as AA, or through a travel insurance package.
• Clearly specify (in writing) any special requirements you want the car to be fit for.

Checklist for after you return the car

• Pay for any fines or tolls before you return the car to avoid extra administration charges.
• Arrange to return the car at a time when you can hand the keys back in person and get a sign-off, so you are not liable for any damage. Take photos of the car upon return in case there is any dispute about damage later on.
• If you do damage the car, make sure you get an itemised account of any repair charges from the rental agency.

Small passenger services including taxis

Drivers of all small passenger service vehicles (including taxis, shuttles, dial a driver, private-hire vehicles and app-based services like Uber) are regulated by the New Zealand Transport Authority (NZTA), and drivers must have a current ‘P’ endorsement on their licence.

Know your rights

Rental cars

Your consumer guarantees mean that any car you rent in New Zealand must be of acceptable quality. It needs to be safe and roadworthy, clean, tidy, reasonably fit for its purpose and free from defects, unless you're aware of minor defects that don’t bother you.

The vehicle must also match the model you booked and be fit for any purpose specified by you or the rental company.

If a particular feature of the car is important to you but isn't specified, mention this when you book, eg fuel efficient or with a large boot for luggage.

Otherwise, it may be harder to turn down a bigger car if the small one isn't available. If, however, the company advertised the car you booked as being fuel-efficient, or a company representative told you it was, any replacement car needs to meet this requirement.

Most importantly, your consumer guarantees can’t be reduced by a car hire company, even if it tries to do this by agreement or through terms in a contract.

Also, under the Fair Trading Act, car rental agencies can't make any false or misleading representations about the car, price, or your level of cover and liability. Businesses also shouldn't use unfair contract terms – see Contracts and sales agreements for more information. See Misleading prices or advertising for more information about your rights with untrue statements.

If your rental car breaks down or is not working properly, contact the rental car company immediately. Under the Consumer Guarantees Act, you need to let the company sort out the problem for you. However, if they refuse, get it sorted yourself and send the bill to the company.

See Faulty products for more information.

If you have mechanical troubles with your rental car, any replacement car provided should be the same model, or an upgrade if you agree.

Damage to a rental car

Under most rental vehicle contracts, you may be charged for damage to a vehicle during the rental period. You may dispute this, eg a third party was at fault or the amount you are being charged for repairing the damage is excessive.

Nearly all rental car contracts are paid for by credit card. If extra charges are placed on your card without you being given the chance to dispute them, or if the maximum damage liability is charged without a repair quote, you can try quickly seeking a chargeback through your credit card company. Chargeback is a process where the credit card company may refund your money.

A term in the car hire company's contract allowing such practices is likely to be deemed unfair according to the Commerce Commission’s Unfair Contract Terms Guidelines(external link).

If the rental company accuses you of damage that you don't think you have caused, make sure they know you are disputing the charge. You may need to apply to the Disputes Tribunal if the money has been deducted from your credit card and you can’t get a chargeback.

Waiver or excess damage insurance

This provides extra cover for roof and underbody damage, single-vehicle accidents, windscreen damage, careless driving, vandalism and hailstorms.

You may find it's not worth taking out the company's excess reduction cover eg, if you can get cheaper cover through your own insurer, or through an Association such as AA, or travel insurance.

If you do choose the rental agency's liability reduction, the agency needs to be clear about what is and isn't included. It can't mislead you into thinking that extra cover products provide greater protection from liability than is actually the case. Also important details must not be hidden in the fine print.

Small passenger services

Small passenger services (SPS) include taxis, shuttles, dial a driver, private-hire vehicles and app-based services like Uber. Anyone who drives for a SPS (with a maximum of 12 seats, including the driver) for hire or reward needs to have a current Passenger (P) endorsement on their driver's licence from the New Zealand Transport Agency (NZTA), except for exempt services(external link). The NZTA has certain requirements that must be met before a P endorsement is granted including:

• Meets mandatory background checks - "fit and proper person" checks
• Has held a full New Zealand Class 1 driver licence for at least two years
• Passes medical checks
• Assessment for a range of other risk factors.

Visit the NZTA's website to find out more about: 

• small passenger services (SPS)(external link)
• passenger endorsement for SPS(external link)

Using a small passenger service

Taxi drivers and drivers of all SPS vehicles are regulated by the NZTA and must:

• have a small passenger service licence, or drive on behalf of someone that does
• have a current P endorsement on their licence
• drive a vehicle that has a current certificate of fitness
• adhere to work time and logbook requirements
• take the most advantageous route for the passenger
• agree the scale or basis of the fare (including any extra charges and GST if charged) at the start of the trip and ask for payment of no more than that
• be able to issue a receipt if requested – either paper or electronic.

Taxis and other SPS drivers should always take you to your destination using the shortest or most advantageous route. Sometimes they will take a different route because they have information about traffic or road works.

Taxis are not required to display a fare schedule but many do. However, drivers must agree the scale or basis of the fare before the trip.

The driver must accept the first request for hire unless there is a lawful reason to refuse, or if the service the driver works for only provides services to registered passengers.

If things go wrong

Make a complaint to the company. Give them a chance to sort out the issue. Small passenger services, eg buses, taxis, shuttles, app-based services, are covered by the guarantees under the Consumer Guarantees Act.

How to complain

Consumer Guarantees Act

If you and the company cannot agree on a solution, you can:

• Go to the Disputes Tribunal — if you are looking for compensation under $30,000 if both parties agree. Compensation might include your money back, compensation for losses, eg missing a flight because an unroadworthy coach broke down, a bus service lost your luggage.
• Go to District Court —if your claim is for more than $15,000.

Report it

Commerce Commission

If you think you have been misled, eg the company advertised their services at a discount but asked you to pay full price, you can report them to the Commerce Commission.

Commerce Commission can't investigate every complaint, or solve your individual problem. But they can warn or prosecute the business. Your information helps them assess which consumer issues are causing the greatest harm.

Make a complaint(external link) — Commerce Commission

Waka Kotahi New Zealand Transport Authority

Complain about urban buses, taxis, shuttles, app-based services, intercity buses, limousine services, coaches and dial-a-driver services.

Make a report if the driver:

• refused to take you
• did not charge what you agreed
• refused to give you a receipt
• took a route that meant you had to pay more
• did not have a passenger 'P' endorsement and/or a driver ID card
• was driving an unwarranted vehicle
• behaved inappropriately.

If your complaint is about violence, assault, sexual offences, or driving under the influence of alcohol or drugs, contact the New Zealand Police.

Complain to Waka Kotahi(external link) — Complaint about a specific matter, Waka Kotahi

Using a passenger service(external link) — Waka Kotahi

More help

Get support at any point from:

• Citizens Advice Bureau (CAB) — a free, independent service, run by volunteers. CAB can advise you on your consumer rights and obligations, in person, by phone, or online.
• Community Law Centre — offers free one-on-one legal advice to people with limited finances. The organisation has 24 community law centres throughout the country. You can find legal information and other resources on its website.

Find a CAB(external link) — Citizens Advice Bureau

Our law centres(external link) — Community Law Centres

Common situations

Misleading deals with rental cars

Jack sees a rental car company advertising a total daily rate of $34 a day plus fees and charges. But when he tries to hire the car, he is told that there is also an extra service charge of $7 a day plus an administration fee of $55 in the fine print. This is misleading as these extra fees should be included in the total daily charge. Jack can make a complaint to the Commerce Commission to investigate this company. He should also shop around for a better deal.

Cancelling your rental car

Maggie hires a rental car for the first week of the school holidays to go to Taupo. However, one of her children falls ill and they have to cancel the trip a few days beforehand. The rental car company agrees to the cancellation but charges her a hefty cancellation fee. Maggie can ask the rental car company for the basis for this charge, and this should also be specified in the contract. It has to be based on a reasonable estimate of their actual losses for the time period and their administration charges.

Not paying the road toll

Brad hires a car for work and drives around Tauranga. He goes over the toll bridge a few times and forgets to pay the charges. When he returns the car he is billed extra for the road tolls, which includes an administration fee. This is within the terms and conditions of the hire contract so he has to pay the extra bill.