Car-hire comparison websites will be expected to make changes so consumers are shown the true cost of hiring a car before they rent.
The Competition and Markets Authority said that websites must provide a “transparent drive-away price” for vehicles, including all extra charges.
The regulator set a deadline of January 2017 for companies to comply, although it acknowledged that some had already made improvements.
It added: “Once the deadline has passed, the CMA will begin a compliance review. Any companies not complying with the law risk enforcement action.”
The CMA highlighted seven areas of concern: young-driver surcharges; one-way fees; fuel charges; excesses; pre-authorisations or deposits; collision damage waiver exclusions; and warnings about the need for snow chains.
Around half of all leisure rentals begin with comparison websites and the CMA action is designed to ensure customers get transparent prices whether they book directly with a leading car hire firm or through a comparison website.
The CMA estimated that the total value of car rental sales in the UK was £1.2 billion in 2012 with sales generated from 12.3 million transactions.
CMA project director, James Macbeth, said: “Drivers will see a transparent drive-away price – including every mandatory charge and any options they choose – before they buy. This will take away the surprise some feel when they only discover the real cost of their car hire at the rental desk.
“People will also get information about factors such as insurance exclusions, credit card pre-authorisations and fuel before they buy.
“This will make it easier to shop around, compare different providers and get the best deal. We welcome the willingness to improve practices we have already seen from the industry and expect that to continue.”
The warning follows the CMA’s work last year, with consumer protection authorities across the European Union, in getting five of Europe’s biggest car hire companies — Avis Budget, Enterprise Rent-a-Car, Europcar, Sixt and Hertz — to agree to make similar improvements.
Macbeth said that although the changes made by the five companies were already having a positive impact for holidaymakers in the UK and abroad, a “significant” amount of business is done through comparison websites “and we are confident that by working with them we can ensure an even better service for mototists”.
The CMA has written to 25 price comparison businesses for car hire market, some operating more than one brand, as part of the process, although it did not name any.
Angela Day, chief executive of Affordable Car Hire, told The Times: “We’re taking heed of all the CMA’s advice and recommendations, and are making sure Affordable is fully compliant.”
CarTrawler is to collaborate with the CMA in identifying and proposing key areas for improvement and compliance in the short-term car rental industry.
Company general counsel Margaret Kearney said: “One of our aims is to be a market leader in customer experience, and it was a privilege to be involved in the shaping of industry guidelines.
“We have made a significant investment in understanding customers’ needs so that we can deliver the solution that is best for them.
“Demonstrating best practice and compliance underpins our company’s commitment to unparalleled customer satisfaction – which includes anticipating unmet customer needs as identified by the new guidelines.”