Should I Buy a Used Rental Car? 10 Factors to Weigh Before Buying From a Rental Company
You go to a rental car company to rent a car, not buy one. But plenty of car rental companies sell vehicles from their fleet when they are a few years old. There are some good deals to be had, but you might be wondering if it's a good idea to buy a car that dozens of people have driven before you.
Michael Lowe doesn’t have too many concerns about buying a former rental car. Lowe is the CEO of CarPassionate.com, a car parts and accessories review website.
"It's a great way to get a car for those on a tighter budget, and generally speaking, registered rental companies will have taken good care of their cars to prevent any accidents while the car was owned by their business," Lowe says.
Lowe suggests that before you sign on the dotted line to purchase a former rental car, check the car over carefully. If you don't know much about cars, take a trusted friend or family member to look at the vehicle so the right questions can be asked. Beyond that, before you buy a rental car, here are 10 factors to consider.
1. How the Car Was Taken Care of
This is probably what potential rental car purchasers are going to worry about the most. It's easy to imagine drivers going on bumpy mountainous roads in their rental cars and not caring if they're banging up the car. After all, it's not theirs, is it? Pretty soon, your imagination has various rental car drivers sailing over speed bumps, speeding over dirt roads and burning rubber in parking lots.
But if you think about it, while it’s true that no customer is going to pay to wash a rental car, most people don’t want to chance getting charged for bringing a rental car back with a scratch or dent. There is a lot of motivation for customers to drive a rental car relatively safely.
Additionally, "Most [rental cars] are kept in very good condition and undergo frequent maintenance checks to make sure all the cars in the fleet are kept in tip-top shape," says Richard Reina, product training director at CARiD.com, an automotive parts and accessories website.
Because every rental agency knows it’s lousy business to rent out a car that’s in bad shape, you could argue that a rental car you’re interested in buying may have been taken far better care of than any other used car you could buy.
"Maintenance records for any used rental car should also be relatively easy to come by, which can’t always be said when you shop from a private seller," Reina says.
2. General Wear and Tear on the Car
While you'll likely be able to pore over maintenance records and look at a Carfax report, you won't know whether somebody braked hard on the car during a weekend trip in New York City. Or if somebody on a trip from Nevada to Texas kept flooring the gas whenever they were on an open stretch of highway. Maybe somebody else used the car to stuff in all of their heavy belongings, overloaded the vehicle and placed a strain on components like the brake, suspension and drivetrain.
That's the one thing — the day-to-day details of how the car was driven — that you won't know about the rental car you buy, and it’s the reason so many first-time car buyers are dubious when thinking of buying a rental car.
Still, the dealer should be able to provide you with the maintenance records for any car you’re interested in, and some rental car companies have generous return policies. Enterprise and Hertz have seven-day return policies, which should be plenty of time to take your new used car to be checked out by a trusted mechanic.
After fretting over how the rental car was cared for, naturally, people are going to wonder about how expensive a rental car typically is. Comparatively speaking, it should be lower than a dealership. That should be a welcome relief if you've been stressing about how loan or lease payments will affect your car loan budget.
"Asking prices should be within or even slightly below the pricing for similar models at dealerships,” Reina says. “Rental companies make fleet purchases at reduced prices and may pass on some of that savings when reselling cars."
According to Edmunds, an online educational resource about automobiles, rental car sales discounts are often 10% or more than traditional dealerships. And most banks that offer auto loans have no problem financing a former rental car if it’s in good shape.
Reina points out that the pandemic has been brutal on a lot of rental car companies since fewer people have been vacationing and going on business trips. You may find better deals as a result of COVID-19.
Mileage is often a selling point for buying a rental vehicle.
"Rental agencies typically only keep cars until they reach a certain mileage, so if you’re looking for a used car that hasn’t racked up too many miles, a former rental might be an attractive, cost-effective option," Reina says.
What sort of mileage would you expect to see in a rental car? It's going to vary, but the big national rental car companies often sell when a vehicle reaches between 25,000 and 40,000 miles.
5. Age of the Car
Rental car companies like to have new inventory, so you'll probably find relatively new used cars for sale. Enterprise, for instance, sells cars, SUVs and trucks that are one to three years old. A search through Avis's rental cars for sale in August 2020 shows mostly vehicles from 2019.
6. Age of the Car Plus the Mileage
While the car may be reasonably new and the mileage may be fairly low for a used car, you'll probably be purchasing a vehicle that has higher mileage than it would normally. That's because the people driving the car were often driving long distances for work or pleasure. But that's not necessarily a bad thing, especially if the vehicle has been well maintained and if the factory-included warranty hasn't yet expired.
7. Possible Lower Resale Value
If you're skeptical about buying a rental car, think about the person who buys the vehicle after you and learns the car was initially a rental. But if you take good care of the vehicle and save all your service records, it shouldn't matter. You're buying the car to drive, not to sell.
People generally don't get rich selling their old cars the way they hope to when they sell an old house. If you're planning on keeping this rental car for a long time, worrying about possible lower resale value shouldn't factor heavily into your decision.
8. Generally, No-Haggle Buying
Many rental car agencies promise no-haggle buying, but so do many dealerships, especially online dealerships. And while many people hate to negotiate, declaring your business a no-haggle zone makes it clear that the car buyer will be unable to get a better deal. So it's a plus for the car selling companies more than anyone else. It makes you wonder if this bums out people who enjoy negotiating.
If you don't like to negotiate and haggle, a rental car company may be a good place for you to buy a car.
You'll want to ask about this if you're thinking of buying a rental car. On the one hand, if you're buying a rental car with high mileage, the vehicle's factory warranty may be expired. On the other hand, because these cars are often still only a year or two old, there may be more time or mileage left.
The biggest and most reputable rental companies, like Enterprise and Avis, often have 12-month or 12,000-mile limited powertrain warranties. A powertrain warranty covers all the parts of your car that involve providing power to the wheels of your vehicle. So if your engine or transmission goes out within 12 months or before you drive 12,000 miles, you'll be covered. If the glove compartment sticks or you somehow break your cup holder, you're out of luck. But, as you might imagine, the engine and transmission will be far more expensive to replace.
10. Limited Inventory
You're buying a car from a rental car company, not a car dealership. So you may not have a wide selection of vehicles from which to choose. In fact, the inventory will probably be less than it would be at a traditional dealership. Some rental car companies have essentially said that they're done buying cars and restocking cars for the year, thanks to the pandemic crushing their business. So next year, for instance, the inventory of rental cars for sale could be slim pickings.
Still, you're presumably just looking for one good car to buy, so that's all you need. There's no harm in checking out a car rental agency near you and taking a look at their inventory. If you find nothing you like, you can check out a different car rental agency or start searching on car buying websites or go to a dealership.
While buyer's remorse is a real thing when it comes to cars, if you do your homework on a rental vehicle and know what to expect as far as mileage, wear and tear and pricing, you shouldn't have buyers remorse just because you purchased a former rental car.
About the Author
Geoff Williams is a freelance writer for MoneyGeek specializing in personal finance and small business issues. He hasn’t yet bought a rental car, though he has rented many vehicles over the years — and currently drives a used Subaru Forester.
- Detroit Free Press. "COVID-19 impact on rental car companies also hurts automakers." Accessed August 11, 2020.
- Edmunds.com. "Are You Buying Trouble if You Buy a Rental Car?." Accessed August 11, 2020.
- Enterprise. "Why Buy a Rental Car?." Accessed August 11, 2020.