Five of the major car rental companies Avis-Budget, Enterprise, Europcar, Hertz and Sixt, which represent two thirds of the UK and EU market have agreed to improve the information they give to motorists following a Europe-wide review of the industry.

The number of complaints made to the European Consumer Centre about car rental services booked in another country, has increased from 1,050 in 2012 to more than 1,750 in 2014.

As a result, five companies have promised to the UK Competition and Markets Authority (CMA) and the European Commission to make one or more of the following changes over the next six months:

  • Improve transparency when customers make a website booking or reservation. This includes providing clearer information about all mandatory charges and optional extras, and detailing key rental terms and requirements, including any deposits charged.

  • Provide better information at the booking stage about optional waiver and insurance products, including prices, exclusions and applicable excesses.

  • Undertake clearer and fairer pre- and post-rental vehicle inspection processes.

  • Improved notification of, and dispute processes for, any charges for damage.

All five firms have also committed to always offer drivers a "full-to-full fuel" option in the next six months. This means motorists will have the option to return a car with fuel in it, rather than bringing it back near-empty.

The European Commission says "full-to-full" is generally the better option, but equally, if you're running late and don't have time to re-fuel, you may be charged a 're-fuelling fee'.

Currently, some policies force drivers to pay for a tank of petrol upfront and then return it empty. But this left customers out of pocket, as they weren't refunded for any fuel left in the tank.

Martin Lewis
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Do car hire firms actually have to follow these guidelines?

This is a code of conduct, which the firms have agreed to. Technically, laws are already in place to ensure consumers are protected and treated fairly, but this new code of conduct has been drawn up to ensure companies properly follow the rules.

If firms don't follow this agreement, the CMA says it can look at whether there's been a breach of consumer law and go back to them to ensure they adhere.

Other car hire firms are also expected to follow suit, and Leaseurope, the EU trade association, has agreed to further develop its practical guidelines for the whole car rental industry.

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Car hire firms promise to treat customers fairer
Five of the major car rental companies have agreed to improve the information they give to motorists

I've got a gripe with a car hire firm. What can I do?

If you've a dispute with a UK rental company, the CMA says you should first check if it belongs to the British Vehicle Rental and Leasing Association (BVRLA). If it does, you can take your complaint there. If it doesn't, you can take your complaint to the Financial Ombudsman Service.

If you've a complaint about an EU hire car firm, you can take your dispute to the UK European Consumer Centre (ECC).

In both instances you need to complain to the car hire firm involved first. However, while both the BVRLA and the Financial Ombudsman Service can issue binding decisions on its members, the ECC can't.

'Improvements by these businesses set a benchmark for the rest of the industry'

Nisha Arora, CMA senior director, says: "The CMA, together with the European Commission and our EU counterparts have worked constructively with the leading EU car rental companies to reach agreements on revised practices that will benefit motorists who rent vehicles in the UK and abroad.

"The improvements by these five businesses now set a benchmark for the rest of the industry to follow."