Since we ran an article pointing out the problem of repair costs for foreign-made cars being 5.3 times higher than those for their Korean-made cars, we have received several hundred emails from readers. Half the messages received by our reporter asked us to point out not only the high repair cost problem, but also the absurdly high cost of renting foreign-made cars. Among the readers that emailed our reporter was 46-year-old office worker Park Cheol-hun (not his real name).

Last year, Park caused an accident while driving his Hyundai Avante off the Gyeongbu Expressway and onto the Nambu Ringway at Seocho Intersection. He failed to slow down enough while looking out for vehicles coming from the left and hit the rear bumper of the vehicle in front. When Park stopped his car he realized he had hit a BMW. It was a minor accident that had left no more than a bit of white paint from Park’s car on the BMW’s bumper.

Inside were a small business chief and his driver. When he got out, the driver said the matter would have to be settled by an insurance company. He said it would cost around 10 million won ($8900). Park was dumbfounded by the unimaginably high cost but there was nothing he could do about it. The accident was his fault. According to the driver, around 70% of the insurance fee consisted of rental fees. The rental fee for one day was 900,000 won ($800), and the car had to be hired for seven days.

The controversy over drivers that cause accidents involving foreign-made cars having to pay rental fees for the owners to rent foreign-made cars while theirs are being repaired is an old one. Rental fees for foreign-made cars tend to be on average two to four times higher than Korean cars on the same level. The difference becomes even larger when the fact is considered that a 50% discount is given to those renting Korean-made cars who choose to take advantage of membership systems. The daily rental fee for a Hyundai Grandeur 2.7 is 242,000 won, but this figure falls to 145,200 won for those that acquire online membership. This amounts to a discount of around 50%. The daily rental fee for a Ssangyong Chairman 600L is normally 368,000 won, but costs only 220,800 won for online members.

A bigger problem is the inconsistency in prices among companies renting out foreign made cars due to the lack of rental cost guidelines for such vehicles. Data from the Korea Insurance Development Institute on Thursday show differences of 200,000-300,000 won in rental fees for foreign-made cars such as Audis, Mercedes-Benzs, BMWs and Lexus from one rental company to the next. The lowest rental fee for a Lexus LS was 200,000 won, while the highest was 830,000 won. 　　

“Outside Seoul, rental companies sometimes charge 700,000 to a million won a day for a Mercedes because of low demand for foreign-made rent cars,” said one official at Samsung Fire & Marine Insurance. “The excessive rental fees mean that repair shops sometimes conspire with rental companies and take a long time over repairs in order to receive bigger insurance payouts. The resulting damage is passed on in the form of extra insurance charges for those that drive Korean-made cars,” the official added.

“Rental companies frequently add on excessive charges including fixed expenses such as employee labor costs, and rent for their premises,” said Jo Byeong-gon, an automobile technology researcher at the KIDI. “We need rental fee guidelines that the public trusts, like the way Jeju City requires rental companies to submit the basis upon which they calculate their rental fees when permitting rental companies to operate.”

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