If you’re in the market for a used car, then you have likely looked at some former rental vehicles even if you don’t realize it. Most dealership lots are filled with used cars that came from local rental agencies.
Purchasing a car that used to serve as a rental follows a process that’s similar to the purchase of any other used vehicle. There are specific advantages and drawbacks to consider when reviewing the model year, maintenance, and mileage.
There are plenty of places where you can shop for a former rental car besides the local used car lot. Most agencies, including Avis, Hertz, and Enterprise, have an outlet where they sell their rental cars to you directly after they’ve outlived their service age. You’ll find a wide variety of cars from which to choose on these sights.
List of the Pros of Buying a Rental Car
1. Rental cars are usually newer makes and models.
If you want to purchase a vehicle that is relatively new, then buying a rental car makes a lot of sense. These companies don’t entice customers by renting them something that is more than a decade old. That’s why you’ll see them up for sale after a couple of years, which is why it is an ideal situation for many used-car buyers. Because there are more drivers associated with the car, you can find something with upgraded safety features and recent technology at a lower price than you would from a single-owner vehicle.
2. You know that rental cars received regular care and maintenance.
People don’t want to drive a rental car that’s trashed. Companies invest a lot of time and effort into the maintenance and cleaning of the vehicle. Most reputable agencies follow the manufacturer’s recommended service schedule to the letter to ensure that the most value possible comes out of each car. They also hire highly qualified in-house mechanics to make sure the vehicle operates consistently well. Smaller agencies outsource this work to trusted dealerships so that the value doesn’t decrease.
3. The price of a rental car is nice on the budget.
Rental companies already purchase their vehicles at a volume discount rate. That means the price they need to sell the car to replenish their fleet is naturally lower than it would be for a private transaction. Companies like Enterprise or Avis are not trying to make tons of cash on these sales. You can even go through the website of your preferred brand to see what options are available in your area. Some agencies even offer a three-day test drive where you can rent the vehicle and receive a refund if you decide to make a purchase.
You can expect most former rental vehicles to have a $1,000 discount when compared to other used cars of the same make and model.
4. You don’t need to worry about price negotiations.
If you purchase a used car from a dealership or sales lot, then you will probably need to negotiate the price of the vehicle. The ticketed price might be 50% higher than what the dealership is willing to take, and it can be double that in some situations. When you buy a rental car, most of the companies won’t allow you to enter into negotiations in the first place. Instead of inflating the price as a way to make a little extra cash, rental car companies want to liquidate their fleet as quickly as possible. That means you’re getting a reasonable price option for a vehicle that has an extensively documented maintenance history.
5. Many rental cars are still in a low-mileage situation.
It is not unusual for rental cars to be above the high-mileage limits in place for private ownership, but you can also find a lot of vehicles that are still in excellent condition. Hertz typically pulls out rentals from its fleet or rotation by the time they reach 40,000 miles. Avid takes them out at 35,000 miles or less, with many of them only 18 months old. That means you can still take advantage of the factory-included warranty when you pursue this option.
The rental cars that fit into this category are usually the first ones that get sold, so you’ll want to be proactive in your decision to make a purchase. Most listings are only up for a day at most for the best options.
6. Rental car companies often include their own warranty for you.
Even if the rental car you prefer doesn’t come with a factory-included warranty, the largest companies in this industry will often provide a limited warranty when you purchase directly from them. Enterprise and Hertz vehicles come with a 1-year or 12,000-mile protection plan so that you can avoid a severe unexpected expense during the first 12 months of ownership.
Not every vehicle comes with this advantage, so you’ll want to carefully read the terms and conditions of your purchasing contract to ensure you receive the protection you need.
7. It’s easy to go shopping for a rental car.
Most rental cars won’t come with customized options, which means you won’t find tinted windows or an upgraded stereo waiting for you in most makes and models. What you can find is an easier shopping experience. Instead of making it down to your local used car lot or dealership, you can go online to find the vehicle you want. Most of the purchasing process happens online, and some contracts can even get delivered to your home or office.
Enterprise even lets you return any car that you decide to purchase if it doesn’t seem to be working out for you. You’ll pay a $200 fee for that luxury, but you’ve got a seven-day trial window to decide if you really want the car.
List of the Cons of Buying a Rental Car
1. You are almost always guaranteed to have a high mileage vehicle.
Rental vehicles are going to have more miles on them than most single-owner vehicles. A car is considered to have high mileage private ownership if the driver puts on between 12,000 to 15,000 miles each year. When you look at a rental car, it might have up to 40,000 miles driven on it each year. That means your preferred make and model might only be a couple of years old, but it could easily have 80,000 miles on it already.
Since drivers don’t have the same inclination to take care of the rental, the miles tend to be harder on the structure of the vehicle. That’s why the price is often lower when you shop for a rental car.
2. Rental cars go through higher levels of wear-and-tear damage.
The miles on a rental car tend to be tough. Not only are there different drivers using the vehicle almost every day, but there are also different styles used when getting behind the wheel. One person might love to punch the accelerator, while another might be heavy on the brakes. Those differences can create a lot of wear-and-tear damage, especially since the average person tends to drive more aggressively when they are on the road in a vehicle that they don’t own.
You will want to have an independent mechanic inspect the vehicle before purchase to ensure that there aren’t any hidden forms of damage in this category.
3. A rental car almost always has a lower resale value.
You might pay less to purchase a rental car when you need a set of wheels, but that also means you’re going to be getting less money for it later when it is time to sell it again. It is almost impossible to receive the maximum resale value because of the wariness that shoppers have for these cars. It can be so bad in some U.S. states that laws are in place that allow dealerships to call them “program” cars as a way to get away from this stigma.
The value of former rental cars also sees an adverse impact because the vehicles are sold at such a high volume. When thousands of the same make and model flood the market at the same time with relatively equal mileage, then that drives the price down even further. If you plan to drive the car until its dead then this disadvantage won’t apply, but don’t expect a large influx of cash.
4. You will face a higher risk of repairs when buying a rental car.
Because a rental car has a higher level of wear-and-tear compared to other vehicles, you can expect a higher risk of a potential breakdown occurring when you pursue this option. Things need to get fixed sooner instead of later because of the higher mileage levels that you’ll find on these vehicles. You can avoid this disadvantage somewhat by choosing the lowest mileage make and model from the list, but it won’t disappear entirely.
Depending on what (or if something) breaks down on the rental car, the cost savings you experienced could disappear because of the repairs you need to complete.
5. Most rental cars come with a limited warranty.
It is not unusual for a rental car to have little if any manufacturer warranty left once you purchase the vehicle. Bumper-to-bumper policies are usually good for either three years or 36,000 miles – whichever one comes first. The powertrain warranty is usually for five years and 60,000 miles. Any repairs that fall outside of the framework are going to be your responsibility, and the purchase of an extended warranty can be a complex and expensive proposition.
The agencies that provide a used car warranty don’t always have the best reputations. You must read the terms and conditions of the contract carefully to ensure that you receive the protection needed for your rental car.
6. You may not have much inventory available locally.
If you live in a rural area, then it may not be possible for you to find a rental car for sale. Your dealerships might have a handful of program or fleet vehicles from which to choose, but that might be it. Your best option in this circumstance is to work directly with a company to have your preferred make or model delivered or to speak with private owners about completing a transaction.
Even when there is more inventory available in your market, the make and model you prefer might not be available. That means you’re taking a double hit: higher mileage and a car you might not actually want.
7. The interior of the vehicle usually needs some work.
Although rental drivers generally want to limit the damage they do to a car to avoid unwanted charges, that doesn’t mean the vehicle is entirely free of cosmetic issues. It is not unusual for there to be unsightly scratches and stains that you’ll want to remove once you become the owner. Steps are always taken to ensure the vehicle runs smoothly before being sold, and a multipoint inspection can provide some certainty in its condition.
If you can get past the visual aesthetics, then there can be a lot of value to consider when pursuing this option. When looks are just as important to you, then this disadvantage could be an issue.
8. You still need to do your homework.
Even if you decide to purchase a vehicle from a rental car company, it is up to you to perform your due diligence. Do all of the homework necessary to ensure that you’re getting a vehicle with the expected value. If a history report is unavailable, then get one from Carfax or AutoCheck. You can get financing options from some rental agencies, but a better deal might come from your local bank.
When reviewing the pros and cons of buying a rental car, it is essential to review the various labels that you can find in this industry. Program or fleet cars can be former rentals, but not all of them marketed in such a manner were actually rented to other drivers. The best way to find out what is going on with the make and model you prefer is to look at the service history documentation of the car you want.
Then make sure that you take the former rental car to a mechanic you trust so that you know what you’re getting into with this transaction.
A former rental car is a fantastic way to gain access to new technologies at a discounted price. If you don’t mind the higher mileage or other potential disadvantages, then you can get a great car at an even better price.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.