The Competition and Markets Authority (CMA) has worked with companies across the sector to improve the accuracy and clarity of information available to customers.

The year-long enforcement work was launched as a result of an industry-wide review, which found car hire companies were not transparent in their pricing, often advertising very low prices, but failing to include all costs. Customers often paid more than expected at check-out and didn’t have the information required under consumer law.

The CMA said: “A year on, 30 leading websites now carry transparent prices for over 1,300 car companies in over 10,000 destinations, which means UK customers can be more confident they will not be hit by hidden charges and unexpected fees.”

Michael Grenfell, CMA executive director for enforcement, said: “It is important people know what they’re signing up to online when hiring a car.

“Prices must be transparent and include all compulsory costs so that people can find the deal that’s best for them….The CMA’s work over the past year has vastly improved the sector and brought the majority of sites offering car hire in line with consumer protection law.”

The CMA also announced that it will take its first direct action against car hire companies based outside the UK. It is now taking enforcement action against businesses based overseas but selling directly to UK customers online. This is designed to prevent problems when people pick up their car abroad.

Problems have included hidden charges for fuel, surprisingly high excess amounts and hidden insurance costs.

Grenfell added: “This move sends a clear message: just because a business is not on UK soil doesn’t mean the law doesn’t apply when it sells in the UK.

“British consumers have a right to protection under consumer law and the CMA will work to ensure they receive it.”