Rental cars get a bad rap.
Labeled as generic workhorses that get used and abused by a revolving door of drivers, rentals are perfectly fine for a few days on a business trip or family vacation, but you wouldn’t necessarily want to own one.
Or would you?
All of the major rental car companies now sell directly to consumers, complete with searchable online inventories and brick-and-mortar dealerships.
It’s an affordable, low-pressure option. And if you can look beyond the stereotype, you’ll see there are plenty of reasons to consider buying from a rental car company, and only a few to proceed with caution.
Green light: seven reasons to buy a used car from a rental company
1. They only sell the cream of the crop: Enterprise, Hertz, Avis and most of the major rental car companies buy thousands of new vehicles every year to refresh their fleets, and they keep the top 1 to 5 percent of their rentals to sell at their dealerships around the country. The rest are sold at auction and eventually make their way onto a used car lot. (You may have even bought one; rentals are usually listed as “program” cars in the vehicle history report.)
2. The vehicles will be well maintained. Rental agencies adhere to a strict maintenance schedule, and many have their own mechanics on-site. So, while these 1- or 2-year-old cars may have higher mileage than most their age, they will be meticulously maintained and any repairs will be documented. (Enterprise includes the Carfax for each vehicle on its website.) As a salesman at Enterprise recently explained: “We’re a billion-dollar company, so we can afford to baby our cars” more than a private owner can.
3. They don’t just sell rentals: Many rental agencies also provide company cars for large corporations. These vehicles are typically driven by one owner and have lower mileage. A closer look at the Carfax should confirm if it was a company car. These aren’t as plentiful as higher-mileage rentals, but if you take the time to look, you might find a real bargain.
4. Cars from rental companies are very affordable: Rental agencies buy new vehicles in volume every year at a significant discount. And they need to sell cars quickly to make room for the new ones in their fleet. So, they typically sell their vehicles for less than Kelley Blue Book values. But as with any dealership, always comparison shop prices before you buy.
5. Rental vehicles have some of the latest technology and safety features: Because they’re purchased new, and only spend a year or two in the fleet, rental cars usually include more of the latest technology and safety features than used vehicles with comparable mileage.
6. No-haggle pricing and extended test drives: Most rental sales dealerships offer a low-pressure experience, with no-haggle pricing and longer test drives. Avis and Hertz offer two-hour test drives, or you can keep the vehicle for three days at a discounted rental rate. If you buy, the fee is waived. Enterprise allows a seven-day test drive, similar to Carvana, but if you return the car to Enterprise you’ll pay a restocking fee. At Carvana, there is no charge.
7. Extended warranties: Most rental companies offer some form of warranty, usually 12 months/12,000 miles. In some cases, the vehicle may still have some time left on the manufacturer’s warranty as well. And be sure to ask about free roadside assistance for a year, which is another benefit that rental companies may provide.
Yellow light: five reasons to proceed with caution when buying a rental car
1. Excessive wear and tear: Lots of different drivers means lots of different driving styles—leadfoot one week; brake-pumper the next. These variations can lead to early wear and tear. While most renters treat the vehicles well, it’s still a good idea to have a mechanic look at the vehicle before you buy.
2. Higher mileage: Rentals are on the road constantly, so they will likely have higher mileage than a typical 1- or 2-year-old car—between 20,000 and 50,000 miles.
3. Limited selection and options: Rental fleets are made up of mostly mid-priced, mid-trim models, which means their sales location probably won’t have as wide of a selection as CarMax or AutoNation, particularly when it comes to luxury models and certain options. A quick survey found Mercedes, BMW, Lexus and Acura all represented in rental sales inventories, but there were fewer vehicles for those brands.
4. Lower resale value: The stigma surrounding retired rental cars—fair or not—can be powerful. If a dealer or private buyer sees your car was a “program” or “fleet” vehicle on the Carfax, they might offer you less on a sale or trade-in.
5. A few more cosmetic defects: Rental agencies are keeping their vehicles on the road longer—some up to two years or 60,000 miles—which means there may be more dings, scratches, or other cosmetic wear. The vehicles we looked at recently at a Dallas Enterprise dealership were mostly in excellent condition, but examine any vehicle you’re considering before buying.
Whenever you buy a used car, there is a bit of anxiety and uncertainty baked into the experience. Approach a rental car with the same healthy skepticism you would any other used vehicle.
Comparison shop the price online. Examine the vehicle history report. And use the extended test drive to take the car to a mechanic. If he or she gives it the green light, you can feel confident that you’ve found a good deal in a place that not every car shopper looks.
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