Alamo Prepaid Gas- Do the Math Before You Buy -Recent (May 2012) experience

[Lewisc]

The prepaid price for gas today is 3.56 per gallon. The price per gallon IF you do not fill your tank before you bring it back is 5.40. the average price for gas in the Orlando area is 3.627 according to gas buddy.

Yes, many people opt for this option and they are informed that they will not get a refund for any fuel not used, it is fully disclosed.

16.5% to be exact and that is disclosed. 10% airport tax and 6.5% sales tax, the other fees are unchanged.

The price listed on the pump includes taxes, including sales tax. Did the pre-paid price of 3.56 include the sales tax or the airport tax?

 

[gmeh1]

The price listed on the pump includes taxes, including sales tax. Did the pre-paid price of 3.56 include the sales tax or the airport tax?

The prepaid price of 3.56 plus the airport tax and the sales tax. As I keep saying, it is a convienance, and the fact that taxes are added is disclosed.

 

[Lewisc]

The prepaid price of 3.56 plus the airport tax and the sales tax. As I keep saying, it is a convienance, and the fact that taxes are added is disclosed.

Thanks for the clarification.

I know what you said but the plan was, and may still be, marketed to some as a way to save some money. Years ago the price you paid under the plan and the local price for gas was prominently displayed.

The price you listed of 3.56 results in a total price of 4.17. Not saying you do this but any comparison which includes sales tax for the local price of gas (total cost) should also include taxes on the cost of gas paid under the gas plan.

Marshel said In the past I've been offered up to 15 cents less a gallon than than the prevailing rates The taxes taxes are over 17%, most places charge sales tax on the airport surcharge (tax on a tax).

It's impossible to break even let alone save money. The only question is how much extra you'll be paying.

 

[Lewisc]

Just another point to add is that prepaid gas is also subject to taxes and fees. So at MCO you are adding just under another 20% to the total price of the gas.

Thanks for the information. I had forgotten, may never realized, the cost quoted for gas by the rental agent didn't include those fees. Add 10% then sales tax and the total is just over 17%

A person who returns the car with literally zero gas is paying around $10. Now add the cost of any fuel remaining in the car and you're probably over $20. Low fuel comes on with about 3 gallons left. Probably the point where many people will put some gas in the car.

 

[gmeh1]

Thanks for the clarification.

I know what you said but the plan was, and may still be, marketed to some as a way to save some money. Years ago the price you paid under the plan and the local price for gas was prominently displayed.

The price you listed of 3.56 results in a total price of 4.17. Not saying you do this but any comparison which includes sales tax for the local price of gas (total cost) should also include taxes on the cost of gas paid under the gas plan.

Marshel said In the past I've been offered up to 15 cents less a gallon than than the prevailing rates The taxes taxes are over 17%, most places charge sales tax on the airport surcharge (tax on a tax).

It's impossible to break even let alone save money. The only question is how much extra you'll be paying.

Lewis, I did disclose that the price per gallon was plus tax and fees. We are required to disclose this. We don't charge a tax on the surcharge, it would be a straight 16.50%.
Again, we do NOT sell this as saving money, we sell this as a convienance.
No agency displays the prices on local gas stations. The way gas prices change, it would be almost impossible to keep up.

 

[Lewisc]

Lewis, I did disclose that the price per gallon was plus tax and fees. We are required to disclose this. We don't charge a tax on the surcharge, it would be a straight 16.50%.
Again, we do NOT sell this as saving money, we sell this as a convienance.
No agency displays the prices on local gas stations. The way gas prices change, it would be almost impossible to keep up.

Technically you don't charge tax, you collect it. Sales tax is charged on the entire rental price, including the airport access fee. I just did a test reservation. The total was an extra 17.16%.

Trust me. There are agents which still promote this as a way to save money. The price displayed on the pump includes a variety of taxes. The only honest way to present the gas plan would be to include the 17.16% in the gas rate disclosed to the customer.

FWIW the test reservation I made indicates a price of 3.53. Gasbuddy says the current price in the WDW area is 3.43-3.45. I think gas is priced to be lower the the price for premium gas.

The customer is paying a little more per gallon. Is paying an extra 17% in taxes/fees. Is paying for any fuel left in the car. I doubt very many customers realize the triple whammy.

I'm sure a number of, less honest, agents suggest a customer might save money. I'm sure most agents don't accurately tell customers how much extra the gas plan will cost them. You're an honest agent and you're off by .65%.

 

[gmeh1]

Technically you don't charge tax, you collect it. Sales tax is charged on the entire rental price, including the airport access fee. I just did a test reservation. The total was an extra 17.16%.

Trust me. There are agents which still promote this as a way to save money. The price displayed on the pump includes a variety of taxes. The only honest way to present the gas plan would be to include the 17.16% in the gas rate disclosed to the customer.

FWIW the test reservation I made indicates a price of 3.53. Gasbuddy says the current price in the WDW area is 3.43-3.45. I think gas is priced to be lower the the price for premium gas.

The customer is paying a little more per gallon. Is paying an extra 17% in taxes/fees. Is paying for any fuel left in the car. I doubt very many customers realize the triple whammy.

I'm sure a number of, less honest, agents suggest a customer might save money. I'm sure most agents don't accurately tell customers how much extra the gas plan will cost them. You're an honest agent and you're off by .65%.

Gas prices are changed 3x's a week and regular gas is used to calculate the price of gas.
sorry my math was off by .0066%, (not .65%.) .1716-.1650= .0066
We collect the tax by charging the customer's account.
Happily and thankfully, I am not in a position of exit agent anymore.

 

[Lewisc]

Your math wasn't off. You didn't realize sales tax is not only charged on the gas but also on the 10% airport fee applicable to the gas.

I decided to accept the implied challenge and crunch the numbers. I'm assuming a 13 gallon tank. Gas rate is 3.56 and the "penalty" rate is 5.40. I'm assuming a customer does a minimal amount of shopping and is able to gas up for the same price of 3.56. A customer who shops should be able to beat the price by at least .05 /gallon. These numbers reflect the 10% airport fee and sales tax. In understand some people are willing to pay for convenience:

1. Run out of gas while on the return line. The pre-paid gas plan cost you $8 more then if you had gassed it yourself.
2. Return the car with 2 1/2 gallons. I'm assuming you won't drive more then 10 miles with the low fuel light on. The pre-paid plan cost you $17 more then if you gassed it up yourself.
3. Pay the "penalty rate" and return the car with 3/8 tank of gas left. The pre-paid plan cost you $3 more then if you paid the penalty rate for 5/8 a tank of gas.. You can return the car with less then half of tank and still cost you less then paying for an entire tank of gas at the discounted price.
   
   Conclusion. People who want to save money should never buy the pre-paid gas plan and should return the car full. People who want convenience should consider gassing up when they have less then half a tank and pay the penalty rate when they return the car. Running ahead of schedule. You have the option of stopping near the airport and filling up. Your choice.
   
   Assume I'm flying out of Tampa. I go to DTD my last night. The low fuel light goes on as I leave my resort. I should have about 3 gallons of gas. I'll need enough gas to get to DTD, back to my resort and then drive to Tampa the next morning. What's more convenient?
   1. Give it a shot? Leave the interstate and try to find a gas station if it looks like I need it. Do you feel lucky.
   2. Stop at Hess by DTD and buy a couple of gallons of gas?
   3. Fill the car at Hess and pay the penalty rate when I return the car?

JMO but buying a plan which necessitates returning the car as close to empty as possible, but without running out of gas, isn't very convenient. Stopping even once to put a few dollars of gas in the car, so I won't run out, isn't my idea of convenient.

edit to add Declining the pre-paid plan gives you the best of both. You have the option of saving $$ or paying the rental agency for the gas you use.

 

[Inkmahm]

The prepaid price of 3.56 plus the airport tax and the sales tax. As I keep saying, it is a convienance, and the fact that taxes are added is disclosed.

Wow, I never would have guessed that. That means prepaying for gas is even MORE of a rip off than I thought previously.

 

[gmeh1]

Your math wasn't off. You didn't realize sales tax is not only charged on the gas but also on the 10% airport fee applicable to the gas.

I decided to accept the implied challenge and crunch the numbers. I'm assuming a 13 gallon tank. Gas rate is 3.56 and the "penalty" rate is 5.40. I'm assuming a customer does a minimal amount of shopping and is able to gas up for the same price of 3.56. A customer who shops should be able to beat the price by at least .05 /gallon. These numbers reflect the 10% airport fee and sales tax. In understand some people are willing to pay for convenience:

1. Run out of gas while on the return line. The pre-paid gas plan cost you $8 more then if you had gassed it yourself.
2. Return the car with 2 1/2 gallons. I'm assuming you won't drive more then 10 miles with the low fuel light on. The pre-paid plan cost you $17 more then if you gassed it up yourself.
3. Pay the "penalty rate" and return the car with 3/8 tank of gas left. The pre-paid plan cost you $3 more then if you paid the penalty rate for 5/8 a tank of gas.. You can return the car with less then half of tank and still cost you less then paying for an entire tank of gas at the discounted price.
   
   Conclusion. People who want to save money should never buy the pre-paid gas plan and should return the car full. People who want convenience should consider gassing up when they have less then half a tank and pay the penalty rate when they return the car. Running ahead of schedule. You have the option of stopping near the airport and filling up. Your choice.
   
   Assume I'm flying out of Tampa. I go to DTD my last night. The low fuel light goes on as I leave my resort. I should have about 3 gallons of gas. I'll need enough gas to get to DTD, back to my resort and then drive to Tampa the next morning. What's more convenient?
   1. Give it a shot? Leave the interstate and try to find a gas station if it looks like I need it. Do you feel lucky.
   2. Stop at Hess by DTD and buy a couple of gallons of gas?
   3. Fill the car at Hess and pay the penalty rate when I return the car?

JMO but buying a plan which necessitates returning the car as close to empty as possible, but without running out of gas, isn't very convenient. Stopping even once to put a few dollars of gas in the car, so I won't run out, isn't my idea of convenient.

edit to add Declining the pre-paid plan gives you the best of both. You have the option of saving $$ or paying the rental agency for the gas you use.

No, I did realize that there was the airport fee of 10% on the gas and the 6.5% sales tax. I was off by .0066%.
Personally, I don't care what people opt for. I used to offer it and advise them of the gas price and the fact that airport fees and tax was additional. For those that wanted it, I would print out a new contract.

 

[Lewisc]

Lewis, I did disclose that the price per gallon was plus tax and fees. We are required to disclose this. We don't charge a tax on the surcharge, it would be a straight 16.50%.
.

Wow, I never would have guessed that. That means prepaying for gas is even MORE of a rip off than I thought previously.

No, I did realize that there was the airport fee of 10% on the gas and the 6.5% sales tax. I was off by .0066%.
Personally, I don't care what people opt for. I used to offer it and advise them of the gas price and the fact that airport fees and tax was additional. For those that wanted it, I would print out a new contract.

You didn't realize sales tax is charged on the airport tax. You're off by .65%. Trust my math.

 

[gmeh1]

You didn't realize sales tax is charged on the airport tax. You're off by .65%. Trust my math.

no, I was not off by 65 percent. I was off by .0066 percent. I have stated,incorrectly, that the add ons to the gas were sixteeen and one half percent. You came back and stated that my math was incorrect, very true, but, not matter how you slice it the difference between .1716 and .1650 is not sixty five percent. It is .0066 percent. On 40.00 the difference is .264 cents. Given your percentage the difference would have been 19.40
40.00x.65= 26.00. I think you dropped two decimal places.

When I did the mock reservation with and without fuel, it went like this.
without fuel, the bottom line was 196.20 with airport fees of 14.33 and sales tax of 11.97.
with fuel (46.60), the bottom line was 250.80 with airport fees of 18.99 and sales tax of 15.31. The difference in fees and taxes are 8.00. 46.60x.1650=7.689 46.60x.1716=7.996 a difference of .307cents, which equates to a difference of .0066.

 

[seashoreCM]

no, I was not off by 65 percent. I was off by .0066 percent. I have stated,incorrectly, that the add ons to the gas were sixteeen and one half percent. You came back and stated that my math was incorrect, very true, but, not matter how you slice it the difference between .1716 and .1650 is not sixty five percent. It is .0066 percent. On 40.00 the difference is .264 cents. Given your percentage the difference would have been 19.40
40.00x.65= 26.00. I think you dropped two decimal places.

When I did the mock reservation with and without fuel, it went like this.
without fuel, the bottom line was 196.20 with airport fees of 14.33 and sales tax of 11.97.
with fuel (46.60), the bottom line was 250.80 with airport fees of 18.99 and sales tax of 15.31. The difference in fees and taxes are 8.00. 46.60x.1650=7.689 46.60x.1716=7.996 a difference of .307cents, which equates to a difference of .0066.

A difference of six and six-tenths thousandths (aka sixty-six ten-thousandths) of a percent of what?

Also I think some of you are confusing fractions with decimals with percentages.

0.1716 is supposed to equal seventeen and sixteen-hundredths percent. At least it was when I was in high school.

0.1716 is four percent more than 0.1650.

Back to the topic. After figuring in taxes and fees, what is the net price per gallon collected up front for the tankful purchased in advance? I didn't realize that Florida sales tax is also computed on the price of the gas in the tank (3.539 per gallon times 13 gallons or whatever). Whereas the price shown in the pump at a gas station is the final price including all taxes. This makes comparing the cost per gallon of gas quoted by the rental agent and the price of gas at the self service pump an apples to oranges comparison.

The primary gain to the rental company each time it sells a tankful of gas up front is the gas remaining in the tank when the car is returned. For prudent customers who do a reasonable amount of planning, this is in the 2 to 3 gallon range, at current prices worth around $7. to $11. Once in awhile a car comes back with much more. When the customer buys the tankful, whatever the rental company gains, the customer loses. Or whatever the customer gains (not having to stop at a gas station to fill up) the company loses (having to do the fill up for the next customer).

 

[Lewisc]

I never said 65%. You missed the . I put before 65. Assume the sales tax is 7.5% and a sales clerk tells you the sales tax is 7%. I'd say the sales tax made a mistake of .5% when telling me the rate. Alamo doesn't charge 16.5%. The total charge is 17.15%. The total dollar difference is under 50c but it's not rounding error. The error was in the tax rate. Florida charges tax on top of the airport fee meaning the total tax rate on the gas isn't 16.5% but 17.15%.

Seashore--The rental company gains when a customer returns the car with fuel in the tank. The rental company also gains from the difference between what they charge the customer (per gallon) and what they pay for gas.

The customer does lose by the amount of gas left in the car. $7-$11 is probably the minimum. The customer also loses since the total price for fuel charged by the rental agency, including taxes, is about 60 cents a gallon more then what it would cost to fill up the car at a competitive station. In other words a person who returns the car empty, literally running out of fuel as they're returning the car, will by paying almost $10 extra. A person who doesn't want to drive with the low fuel light illuminated will be paying $20 extra.

Some people want convenience. What's interesting is how much gas you have to use before the pre-paid plan is cheaper then just returning the as is and paying the penalty rate. Return the car with even 3/8 of a tank of remaining fuel and you'll pay less then paying the "penalty" rate for the amount of gas you actually use.

edited to add: All this discussion of taxes on taxes and what's the significance of the effect of Alamo being forced to charge a tax on a tax/fee is confusing the issue.

Price on the pump reflects all taxes. The gas price quoted by Alamo is increased by over 17%. People who return their gas with zero gas are still paying around $10 extra for the convenience. What's interesting is looking at how often paying the penalty rate is a better deal then pre-paying for the entire tank of gas.

 

[Marshel]

.

What's interesting is looking at how often paying the penalty rate is a better deal then pre-paying for the entire tank of gas.

When you return less than full and pay a penalty, you are relying on rental company to truthfully charge you the proper amount; it would be difficult to dispute that charge if you felt they were gouging you for a few extra gallons. Looked it up and the Enterprise family(Ent., Nat'l and Alamo) actually treat you much fairer in a penalty situation, they charge you market price +50% or market price + $2, whichever is less. According to Enterprises website the per gallon penalty fees as of late March for Oralndo were:

Avis/ Budget $8.00
Hertz 7.86
Dollar/Thrifty 9.29
Enterprise 5.78
Nat'l/Alamo 5.86

(source: http://www.enterpriseholdings.com/p...ompetitive-gas-prices-and-refueling-fees.html)

 

[Lewisc]

and when you take the prepaid plan you're trusting the rental agency topped off the tank. The previous renter may have filled up at the Hess station, used a couple of gallons and returned the car with the gauge still reading F. You're also trusting the location where the agency fills the cars is on level ground.

 

[Alexander]

A difference of six and six-tenths thousandths (aka sixty-six ten-thousandths) of a percent of what?

Also I think some of you are confusing fractions with decimals with percentages.

0.1716 is supposed to equal seventeen and sixteen-hundredths percent. At least it was when I was in high school.

0.1716 is four percent more than 0.1650.

Back to the topic. After figuring in taxes and fees, what is the net price per gallon collected up front for the tankful purchased in advance? I didn't realize that Florida sales tax is also computed on the price of the gas in the tank (3.539 per gallon times 13 gallons or whatever). Whereas the price shown in the pump at a gas station is the final price including all taxes. This makes comparing the cost per gallon of gas quoted by the rental agent and the price of gas at the self service pump an apples to oranges comparison.

The primary gain to the rental company each time it sells a tankful of gas up front is the gas remaining in the tank when the car is returned. For prudent customers who do a reasonable amount of planning, this is in the 2 to 3 gallon range, at current prices worth around $7. to $11. Once in awhile a car comes back with much more. When the customer buys the tankful, whatever the rental company gains, the customer loses. Or whatever the customer gains (not having to stop at a gas station to fill up) the company loses (having to do the fill up for the next customer).

What???? 0.1716 is 17.16% and 0.1650 is 16.50% That is a difference of .66% not 4%. You were heading in the right direction, but that totally threw me off, and I teach this everyday. Anyhow, I can't believe this thread is still going. If people want the convenience, they'll pay it, if they don't they won't. Kinda of the end of the story isn't it?

 

[sam_gordon]

What???? 0.1716 is 17.16% and 0.1650 is 16.50% That is a difference of .66% not 4%. You were heading in the right direction, but that totally threw me off, and I teach this everyday. Anyhow, I can't believe this thread is still going. If people want the convenience, they'll pay it, if they don't they won't. Kinda of the end of the story isn't it?

I don't think seashore was wrong... use a calculator... 0.1650 + 4% = 0.1716. So yes, 0.1716 IS 4 percent more than 0.1650.

Change the numbers. If you're referring to 20 & 20.8 (even if talking about percentage), 20.8 is 4% more than 20.

 

[Alexander]

I don't think seashore was wrong... use a calculator... 0.1650 + 4% = 0.1716. So yes, 0.1716 IS 4 percent more than 0.1650.

Change the numbers. If you're referring to 20 & 20.8 (even if talking about percentage), 20.8 is 4% more than 20.

4% is .04

0.1650 + .04 = 0.205 When you straight up add.

0.1650 x .04 = 0.0066 When you find 4% of (which means multiply).

0.0066 + 0.1650 = 0.1716

 

[Chaufeurse]

I would like to take the prepay option but for years have been advised that our Brit pre-paid car hire voucher is ineligible for prepay at Fort Myers. So, imagine my surprise to discover, only this week, that MCO have been accepting and offering other Brits prepay with the same voucher and from the same UK booking agent!

Instead Fort Myers say we have to take the car with a full tank of fuel and we will be charged upon return - and boy, oh boy, do they charge - $100 for a mid size car including concession recovery and DLY FT fee in Feb 2012. They charged $5.24 a gallon whereas prepay would have been in the region of $3.72.

I am less than amused about this situation and have spoken to the car hire company customer service but would appreciate any constructive advice on how to proceed with this issue.

Thank you.