Why the $25 a day for under age 25? (rent, drivers, renting)

[Joei]

I rented a car once before, and every place adds on an extra $25 PER DAY for being under 25.

What I don't understand is that then, you're still not covered by insurance with the $25, which is more expensive per day than the premium insurance rate.

I don't get it? If its not covering insurance, whats the point of the extra $25?

[PacificFlights]

It covers them if they are sued because of somthing you did while driving their car. they say under 25 have more accidents and lawsuits due to negligence or inmature bahavior so they charge extra. Its that or they don't rent to you. Some have started tacking on extra day fee for drivers over 75 for the same reason.

[jlawrence01]

Originally Posted by Joei

I rented a car once before, and every place adds on an extra $25 PER DAY for being under 25.

What I don't understand is that then, you're still not covered by insurance with the $25, which is more expensive per day than the premium insurance rate.

I don't get it? If its not covering insurance, whats the point of the extra $25?

First, if you shop around, you'll find that there are several that now rent to drivers 21 and over.

Second, in renting to younger drivers, the agency is accepting greater risks that the vehicle will be in an accident. So they charge more.

If you are a corporate driver, the agencies generally waive the underage fee.