If you are planning a trip to a new destination like Dubai, your transportation needs should also be among your plans. Dubai is not a place anyone visits and sits in one place, you will surely like to explore the marvels of the city. When it comes to transportation, you have two main options; car rental Sharjah, or public transportation. While public transportation might seem cheaper at first glance, renting a car offers more convenience and comfort, allowing you to see the value for your money.
Moreover, long term car rentals are actually cheaper than public transportation especially when you travel in groups. However, the cost of taxes could quickly add up and make the price soar. In this article, we are going to walk you through legal strategies to help you avoid or minimize tax on your rental car. But before we do that, let’s talk about the different types of taxes that you can incur when you rent a car.
Different Types Of Taxes On Car Rental
- Value added tax(VAT): Value added tax or VAT is a tax added to most products and services offered by VAT registered companies including car rentals. The VAT tax incurs a rate of 5% on your car rental according to the UAE laws and there is no legal way to avoid this tax.
- Airport surcharge: An airport surcharge is a fee that a car renter must pay when they come to pick up their car from the airport. This is because the airport is considered a premium location, therefore, car rental companies are charged higher rent and taxes to operate there. These charges and taxes are passed down to the rental rate and given to the final consumers.
- Tourism fees: Tourism fee is a tax that is applied to goods and services that are purchased by tourists. Some car rental companies may incorporate this fee as part of the rental cost.
- Local government taxes: Some rental companies may add various local government taxes to the rental cost.
Read Also: 7 Ways a Travel Agency Can Save You Money On Flights
How To Minimize Taxes When You Rent A Car
While some taxes are unavoidable, there are others that can be minimized or even completely waved off, here’s how;
- Avoid airport rentals: The cost of renting a car at the airport is significantly higher than off-airport rentals due to the included taxes and airport concession fee included in the rental cost. You can avoid this extra expense by choosing an off-airport location as your pick-up destination.
- Rent a car for longer periods: Long-term car rentals can result in lower daily rates and reduced taxes; just make sure that you are hiring from a reputable company with transparent policies. You can find reliable suppliers on OneClickDrive marketplace and hire from them.
- Avoid add-ons and extras: Some additional services such as GPS, child seats, and additional insurance incur more fees as well as taxes to your rental costs. Unless they are inevitable, don’t include them in your rental package.
- Review the rental agreement: When renting a car from any company, don’t skip the rental agreement. It contains valuable information regarding additional fees and taxes. Ensure all taxes and fees are clearly listed and understandable. Ask questions for clarity in case you find any unexpected charges or taxes. Ensure it is clarified and if you are not satisfied, visit a different company.
- Use credit card benefits: Some special credit cards offer several benefits including rental car insurance which helps you cut down on rental cost and taxes.
- Join a loyalty program: If you are a frequent traveler and renter, then it is recommended to join a loyalty program from your most frequented rental company. Loyalty programs offer several benefits such as discounts, fee waivers, and fee upgrades. By joining one, you are rest assured to enjoy one or two of these benefits more often than not.
Read Also: How To Hire A Mini Bus Online In Delhi: A Step-By-Step Guide
Conclusion
Most people assume that renting a car is more expensive than public transportation. While there may be some truth in that, it is not entirely correct. You see, some car rental companies add additional fees and taxes to the rental costs which you may not be aware of; thereby making the rental price sky-rocket. It is necessary to be vigilant and always peruse the rental agreement thoroughly before proceeding with your next car rental Dubai.
