Renting a car this summer? AI might hit you with a surprise damage claim

Car rental companies are incorporating artificial intelligence to detect hard-to-see dings and scratches on vehicles, and it has left consumers fuming over costly charges for damage that is unexpected and sometimes nonexistent.

SIXT Car Rental, based in Fort Lauderdale, Florida, uses a “Car Gate” equipped with vehicle inspection technology backed by AI to inspect rentals for damage.

Hertz Car Rental has also started using AI technology to scan cars. The company partnered with UVeye, which uses high-resolution cameras and “machine learning” to scan vehicles for damage to the exterior of the car, its windows and tires, and even the undercarriage.

UVeye promises a “6x higher total value of damage captured” and says the technology reduces disputes and shortens damage claim times “to just a few days.”

Car rental customers are complaining that the AI detection scan is more like a scam.

Consumers say it attempts to force renters to shell out hundreds and even thousands of dollars for questionable damages or damages they do not believe they caused.

In June, Kelli Groh returned her SIXT rental to Washington Reagan National Airport and drove through the company’s “Car Gate.”

A rental car employee told her there was no need to inspect the car at drop-off because it was “all AI,” she said.

Two days later, SIXT contacted her about four scratches and dents on the vehicle. Despite Ms. Groh’s repeated requests, the company did not provide pictures of the alleged damage or an invoice. Ms. Groh contested the claim, and it was dropped after she posted one-star reviews and negative online comments about her experience with the company.

“I said it was a shame, and there are thousands of people all over the internet with the same issue,” Ms. Groh said. “I was going to report them to the Better Business Bureau and the attorney general.”

Other SIXT renters have had less luck quickly resolving AI-detected damage claims. The company has sent disputed charges to a collection agency even when it has failed to send customers any photos or an invoice verifying or explaining the damage claims.

The AI scanners are enabling car rental companies to bill for minuscule scratches and dings they may have previously ignored.

Ravin AI CEO Eliron Ekstein said unrecouped damages can cost a large car rental company $30 million annually.

He said car rental companies can recover an additional 20% on average for damages per rental by using automated technology scans.

“This improvement in recovery rates can translate into millions of dollars in saved costs annually for large fleets,” he said in Auto Rental News magazine.

Consumers are paying for the heightened scrutiny.

A Hertz renter was recently charged $440 for “a tiny scuff,” measuring about an inch, to the driver’s side rear wheel.

Hertz’s AI scanner at Hartsfield-Jackson Atlanta International Airport picked up the damage. According to a report by The Drive, the bill included $190 in processing and administration fees, which Hertz defines as “the cost to detect and estimate the damage that occurred during your rental.”

The damage was reported to the consumer through an app, and there was no quick way to speak to a live agent. A discount was offered in exchange for quick payment for the damages, but the consumer had trouble reaching a live agent to contest the charges, and the discount expired.

In Fort Lauderdale, photos taken by SIXT’s AI scanner in one damage claim show a close-up of a car returning, but the AI shot of the car leaving the rental lot was darker and farther away, making it nearly impossible to compare the two photographs.

The AI photos generated at SIXT are difficult to decipher. The company uses image processing technology that identifies the edges of an object to determine whether the car appears to be in a different condition than when it left the rental lot.

Consumers don’t see a traditional photo of damage. Instead, if they ever receive the photos, they are confronted with a page of squiggly lines that blend with reflections and shadows. They face a demand for money, even in cases with no noticeable new damage in the photos.

In one recent damage claim, the company charged nearly $900 for a dent with paint damage on the car’s rear passenger door that the consumer never detected during a 36-hour rental.

The company sent the damage claim to the consumer three days after the car was returned to the rental lot but did not provide photos for four months.

In the meantime, the company sent the bill to a collection agency even though the consumer had disputed the claim and sought time-stamped photos and an invoice.

The collection agency provided the customer with the SIXT damage invoice four months after the claim.

The Washington Times reviewed the damage claim and the collection notice.

It charged the consumer for unspecified damages to the rear door and included hundreds of dollars in costs for additional and unspecified damages to the front passenger door, which SIXT never mentioned in the original damage report.

None of the damages on the invoice appeared in any of the company’s AI-generated photographs.

When the car was rented in November, SIXT emailed the customer a computer-generated list of existing damages to the car, but only after the car left the rental lot.

It included 27 damages to the doors, bumpers and car rims, including one damage incident listed as a “crash.”

Despite describing the damage as existing, the company later sent emails to the customer demanding payment. The customer said the company did not return phone messages.

The charges were dropped in March after the consumer complained to the Better Business Bureau and the Florida Department of Agriculture and Consumer Services, which contacted SIXT.

SIXT said in a statement provided to The Times that AI-supported technology “is increasingly becoming an industry standard and continuously improving.” The technology ensures “customers are not charged for damage they did not cause,” which SIXT said results in greater transparency for the company and consumers.

“To be clear: If potential damage is detected, it always undergoes a human review to ensure a fair and accurate assessment. If a discrepancy does occur, we make every effort to resolve it to the customer’s satisfaction,” the company said.

The SIXT website assures consumers that the photos are “checked and verified” and that only new damage will be charged. Consumers will be promptly notified by email with “the available photo documentation to ensure full transparency,” the company website states.

Consumers tell a different story, many of them on the Better Business Bureau’s complaint pages. The bureau does not list SIXT among its accredited businesses.

One customer was charged $706 for damage detected by the SIXT “Car Gate” at the Atlanta airport.

The company would not provide photos or an invoice, only a link to pay the cost of the damages.

Weeks passed, and a collection agency began calling several times a day in an attempt to collect the money.

Two days after the customer filed a complaint with the Better Business Bureau, SIXT dropped the complaint.

“I have received no proof that the vehicle I rented was damaged. I have now filed a dispute with all three credit agencies for the negative report filed against me,” the consumer said.

The Better Business Bureau told The Times that it analyzed car rental complaints it received and could not determine whether there is an increase in disputes related specifically to the use of AI technology.

Hertz, which also lacks accreditation with the Better Business Bureau, provided a lengthy response to the complaints about its new AI scanner.

“Over 97% of cars scanned with this technology show no billable damage, proving that the vast majority of rentals are incident-free,” a company spokesperson said. “Vehicle damage has long been a common pain point across the car rental industry for customers and companies alike. At Hertz, we’re using this technology to tackle this head-on. Our goal is to enhance the rental experience by ensuring customers are not charged for damage that didn’t occur during their rental, while bringing greater transparency, precision, and speed to the process when new damage is detected. As we continue rolling out this technology, we remain committed to ongoing innovation and continuous improvement.”

The spokespeople said a live agent will review all disputed claims, but customers whose cars are inspected by the AI technology “have the added benefit of a dedicated chat, which ensures consistent responses for common questions and has the ability to remediate issues in near real time.”

Ms. Groh, who rented from SIXT,  said car rental customers should be alerted to scratches and dents when they return the car so they can discuss the damages in person.

“Everything is going toward AI,” she said. “I think it all comes down to honesty, transparency and integrity, which doesn’t come easy with corporations.”