Saudi Gazette report

RIYADH — Minister of Transport and Logistics Saleh Al-Jasser has approved significant amendments to the regulations governing car rental and rental brokers in Saudi Arabia.

The updated regulations introduce key changes aimed at enhancing transparency, improving service quality, and ensuring compliance with industry standards.

One of the key amendments clarifies the definition of "reservation" in Article 1, specifying that it refers to the process of booking a car and selecting additional services through electronic platforms before finalizing the rental contract. This adjustment aligns with the growing reliance on digital services in the car rental industry, ensuring a streamlined and modernized process for both providers and customers.

Financial requirements for rental companies have also been revised, with Paragraph 5 of Clause One in Article 4 now mandating a financial guarantee of SR100,000 in favor of the Transport General Authority (TGA). However, entrepreneurial establishments will be granted a one-time exemption from this requirement, supporting small businesses and fostering industry growth.

A major regulatory shift includes the removal of the restriction that previously prohibited renting cars with a driver, a change that offers greater flexibility in rental services. Additionally, the provision allowing car rentals by the hour, as stated in Article 27, has been eliminated.

The revised regulations now stipulate that the minimum rental duration with a driver must be at least six hours, ensuring more structured and standardized rental agreements.

The amendments also introduce new penalties and violations aimed at strengthening oversight and enforcing compliance. Rental companies are now required to provide tenants with documented proof of vehicle receipt when the contract remains open due to financial obligations, with a penalty of SR1,000 for failure to comply.

Furthermore, issuing contracts through the electronic system designated by the TGA is now mandatory, with non-compliance subject to a SR4,000 fine.

Another significant change pertains to stolen rental vehicles, as the updated rules now mandate that the date and time of reporting a stolen car to the authorities must be considered the termination point of the rental contract. Failure to comply with this rule will result in a SR3,000 fine.

Additional regulatory measures have been implemented to ensure that all rental companies and brokers operate with valid licenses. Practicing rental activities or acting as a rental broker with an expired license will now result in a SAR5,000 fine.

Moreover, rental companies are prohibited from requiring tenants to sign additional documents beyond the official rental contract, with violations subject to a SR3,000 fine.