How would a collection against me affect my credit

Question

I went to a new city two weeks ago and rented a 2011 Civic in the meantime. On the last week of the rental, someone hit my car in the front bumper in a parking lot.

The damage was a 2 by 3 inch dent in the front bumper. There were pre-exisiting scratches on the front bumper (these were documented during check out)

The rental car company had come up with a ~$2k estimate to repair this!

I called their bluff and negotiated it down to $950.

However, the dent is really superficial and in no way compromises the safety and functionality of the car.

I could have repaired it myself for ~$50 using those dent repair kits, but the terms of the rental stated that no repairs could be done by me.

My own car insurance covers this rental, but my deductible is $1.5k

I am considering offering the rental car company $250 - a fair figure considering a brand new OEM front bumper is $175.

Questions:

1. What happens if they turn down my offer? Will they forward this to a collection agency or possibly litigate against me? (I am assuming $1k is too small to warrant a litigation suit!)

2. If they forward this to a collection agency, how much of the $950 could I be really required to pay? If I negotiated with that agency and paid them $150, how would this affect me, esp. my credit?

3. Would this affect my credit in any way (other than if the collection agency reported me to the beauru)

4. Can the rental company charge my credit card, that I used to pay the rental amount, for the cost of the damage without my written approval?

Answer 1

Would this affect my credit in any way (other than if the collection agency reported me to the beauru)

If and that's a big if, it is not reported to a beauru then no it will not affect your credit at all(I don't recommend you find out if they will report you).

As for the rest of your question it's not so black and white.

If they turn down your offer all bets are off, it is up to them weather they file a law suit or hand it over to a collection agency. $1k is not to small to warrant a law suit, it's called small claims court. You could be left on the hook to pay the entire amount.

With that being said if you truly feel they are over charging you then instead of "calling a bluff" explain to them how you feel and offer them a compromise such as offering to take the car to a third party mechanic and agreeing to pay the price that they quote.

Can the rental company charge my credit card, that I used to pay the rental amount, for the cost of the damage without my written approval?

Most likely they took out a deposit when you rented the car and you already gave them permission when you signed the agreement. The deposit they took out might not appear on your card.

For instance, when you pay for gas at a gas station you swipe before hand, what the card does is, it sets aside X amount of money for the transaction till it is complete. Similar when you pay at a restaurant money is set aside for tip hence why they don't need to recharge your card.

Regardless believe me they can charge your card again. I actually had an experience where I got a parking ticket renting a uhaul, I paid the ticket my self but they received notice about the ticket and they charged my card for the ticket a month after I rented that truck.

Answer 2

They'll charge your credit card, that's what they have it for. Don't you have rental CDW on your card? Almost any US card has that.

Collection will trash your credit for a long time, definitely not worth the $700 you're trying to save.

Re the litigation... Since if you lose you pay their costs, and since you already negotiated with them to some agreed number you're bound to lose if you don't pay it, I'd guess that if they want to sue you - they'll sue you.

Lesson learned - make sure its fixed before you return the car next time.

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Can the rental company charge my credit card, that I used to pay the rental amount, for the cost of the damage without my written approval?

The approval is embedded in the rental contract. They can charge you without any additional approval, and you won't be able to dispute it. The credit card company might try to mediate, but they won't work too hard for you. There are no grounds for charge-back, if they do something for you - it would be their courtesy.