In car rental, a security deposit is a sum of money that a supplier holds on to until the customer returns the rental car. The supplier uses this money to pay for any unexpected charges such as damages to the car and parking tickets. The customer can usually use their credit card for the deposit or sometimes a debit or check card. Some suppliers also accept cash deposits.
Suppliers mainly use pre-authorisation to hold a security deposit from a card. The funds are then reserved and can’t be used for other purposes but they haven’t been charged. When the customer returns the car without any problems, the deposit is released. In some cases, the deposit is actually charged from the customer’s card. In that case, the deposit is then refunded to the customer.
Some suppliers release the deposit right after the rental. But it may also be released a few days after the car has been returned. In any case, the exact time it takes for the money to reach the customer’s account depends on their bank.
Security deposit is usually either a set amount or determined with a specific calculation method. The exact amount depends on various aspects, such as the rental time and length, car type, the renter’s place of residence and the rental location.
Example sentence(s):
- For cross-border rentals, the security deposit is equal to the purchasing value of the vehicle.
- The security deposit is equal to one day's rental fees, plus the excess amount applicable to your rental vehicle.
