Worst 5 scams in Australia when renting a car

Australia is an incredible country, and renting a car is the absolute best way to experience its breathtaking nature. But before you hit the road, you need to understand the dark side of Australian car rentals: the scams.

I have broken down the five worst car rental scams in Australia and, most importantly, how you can avoid every single one of them. And at the end of the video, you will also discover a bonus tip that can easily save you over $100. But let’s dive straight in.

Scam 1: The Massive, Shocking Excess

Most standard Australian car rentals include these insurances: the mandatory Third-Party Liability (TPL) insurance and a Collision Damage Waiver (CDW). The catch is the excess, or deductible.

In Australia, this excess is often set at a massive $5,000 to $7,000 AUD. That figure is pretty unique globally; usually, the maximum deductible is around $1,000 to $3,000.

Why is it so high? Because once you leave the city, accidents with Australian wildlife, such as large kangaroos or wombats, can cause incredible damage to the vehicle.

Rental companies often use this fear tactic, I mean this massive excess, to push their own dramatically overpriced insurance at the counter, sometimes charging an arm and a leg, potentially $40 to $50 per day.

Also, keep in mind that in several cases I personally experienced a full insurance offered at the counter that did not cover everything, so, honestly, it should not even be called full insurance!

How to Avoid This Scam

Well, the fix is simple and budget-friendly: Buy a third-party full insurance coverage before you arrive at the rental office. This full insurance, or “Zero Excess Cover,” is often 70 to 80 per cent cheaper than at the desk, and it usually includes everything. 

For example, on the comparative website DiscoverCars, where I usually rent my cars, they offer full insurance between $10 and $20 a day based on the car model (that’s 6 to 10 USD/EUR a day).

Given that a small scratch could cost you $500 to $1,000 upon return, this is an absolute bargain for total peace of mind.

I have been renting cars in Australia for 20 years, and I love DiscoverCars because it works as an Airbnb of car rentals, where all the providers are rated between 5 and 10 stars based on genuine reviews from real customers. I usually filter above 8 or even 9 stars to shortlist the most trusted providers and book from there

Scam 2: Claiming Pre-Existing Damage

This is probably the most commonly reported scam worldwide, and it targets your huge excess that we already talked about in the previous chapter.

Some dodgy rental companies may try to claim pre-existing damages—like a small scratch, a dent, or even a chip in the windscreen—and charge you against your high excess. For a minor 2cm scratch, they may attempt to charge you $500 to $1,000.

How to Avoid This Scam

You need proof of the car’s condition upon pick-up.

Before you drive off, you should take plenty of photos and videos of the car’s exterior and interior, including the rooftop and the undercarriage, on all 4 sides of the car. It takes you just a few minutes, but it can save you plenty of money and time at the end of the rental period.

If you have full insurance, it’s less of an issue, of course, but still, this helps you avoid the lengthy claims paperwork when you drop off the car.

Scam 3: Limited Mileage Fees Ruin Road Trips

Be extremely wary of deals that offer a fantastic low daily rental rate but come with a severe limited mileage restriction, typically 100 or 150 kilometres per day.

If you are visiting Australia, you are likely planning a long journey, such as driving the Great Ocean Road (600–700 kilometres round trip) or heading from Sydney to Queensland.

Exceeding that daily limit will activate extremely high per-kilometre charges, sometimes as high as 30 cents per kilometre. This can quickly add $60, $70 or more to your bill, turning that fantastic deal into a costly surprise.

This scam is sadly common, particularly when rental staff know you are booking a long road trip but “fail” to highlight the mileage daily limits. I know, very annoying!

How to Avoid This Scam

If you plan to leave the city centres, the rule is easy: Always rent a car that offers unlimited mileage. It is incredibly easy to exceed a daily limit when exploring the countryside.

Scam 4: Excessive Toll Handling Fees

And now let’s talk about the Excessive Toll Handling Fees

Australia’s major roads, especially in Sydney (Harbour Bridge, M2, M4) and Melbourne (M1, M2), operate on a completely cashless toll road system. Cameras read your number plate, and the charge is applied electronically.

The scam is that rental companies can charge extra administrative fees—sometimes a flat daily fee regardless of usage on top of the actual toll cost. This can be $3-$4 per day or every time you pass a toll, which is ludicrous.

How to Avoid This Scam

You have three solid methods:

1. Register Directly: Purchase a visitor pass or register your number plate directly with a toll operator like Linkt or Roam before your trip, linking it to your credit card. You can also pay the toll within 72 hours on the Linkt or E-Toll websites.
2. Use Navigation Apps: Apps like Google Maps or Waze can be set to suggest alternative routes that avoid tolls altogether.
3. Check the Policy: Always check the rental contract’s toll policy beforehand, as the administrative fees can vary significantly between companies. And there are companies that actually include this service for free, which is great!

Scam 5: Cross-Border Fees and Voided Insurance

This scam is less common but potentially the most devastating, as it can completely void your insurance.

First let’s talk about the Interstate Fees. Some companies charge an additional fee, sometimes up to $150 AUD, just for driving across state borders, such as from Victoria to New South Wales. You may only find out about this charge when you discuss your road trip itinerary at the counter.

Be also aware that a few rental companies strictly ban driving on unsealed (dirt) roads or to specific remote islands (like Kangaroo or Fraser Island).

If you breach these terms and damage the vehicle, your insurance is instantly void, meaning you become liable for the entire repair cost, easily tapping into that $5,000 excess on CDW.

How to Avoid This Scam

This one requires you to read the fine print. You must carefully review the rental conditions in the ‘Cross-border travel’ and ‘Driving Restrictions’ sections to ensure your itinerary, including any ferries to Tasmania or unsealed tracks you plan to use, is fully permitted.

For example, on the booking website I previously mentioned, DiscoverCars, there is a clear section describing where it is and where it is not possible to drive.

Bonus Tip: The Cleaning Fee Trap

Finally, let’s jump to the bonus tip. Watch out for the cleanliness scam. If you return your car “too dirty”—especially if sand is found after a beach trip—you might be hit with a cleaning fee of up to $70 or $80 AUD. Some companies near popular beaches charge $100 or more if they find sand.

The quick fix is simple: spend about $10 to $15 on a quick wash and a vacuum cleaner at a petrol station the day before drop-off. This tiny effort can save you a big fee!