By Lauren Fix, The Car Coach
With a shortage of automotive chips, we are once again not getting new cars, and the used car market is on fire. There are many places to buy a used car.
Rental cars are one option when considering a used car. Every year, thousands of rental vehicles hit the used car market. Is a former rental car a smart purchase, a good deal, or should you just forget about it?
Why are rental car companies selling their old vehicles? Rental companies buy new vehicles to replace their fleet regularly. They want to keep their inventory up-to-date and make room for newer models. This means they need to sell some of their cars, either going to auctions, dealerships or directly to consumers.
Rental companies buy fleets of cars from car manufacturers under a “buyback” program. Typically, the buyback criterion is around 15,000 miles. There are disqualifiers like hail or flood damage, collision damage over a certain amount, etc. Then these vehicles will go to auction or for sale on their lots.
Vehicles that go back to the dealer become used cars to sell, which benefit both the rental companies and the dealers. The rental companies provide newer rides to their customers, and the manufacturers benefit from the exposure and test-drives of their models.
Pros to Buying Used Rentals
While rental fleet sales only offer used cars, they are often still under the factory warranty, including the powertrain warranty covering the engine and transmission. If a mechanical issue pops up a month after buying, you can take it to the dealership for covered service and let the pros handle it for free.
Another bonus of buying a used rental is that they are cleaned and maintained. Every time a customer returns a car, maintenance techs look it over for damage caused by the previous renter to maintain a safe ride for the next customer. Mechanics do scheduled maintenance and fix minor repairs before they turn into a major issue.
Another huge plus to buying a used rental car is that the sales process tends to be less stressful than with most used vehicles. Rental purchases could score you a deal on a used car.
But what if you change your mind? Buyer’s remorse happens, and some rental car companies let you test drive the car for three to seven days before finalizing the purchase. If you change your mind or discover an issue, you can bring it back for a full refund.
Cons to Buying Used Rentals
While rental cars have their advantages, they also tend to have higher mileage than other used cars. Drivers primarily use rental cars for vacations and road trips which means lots of miles on the odometer. The average car in the US, drivers put on around 12,000 miles in a year, rental cars can have as much as 40,000 miles, which could put it outside the drivetrain warranty.
Rentals sometimes live a rough life. Some drivers treat the vehicles kindly, while others beat the pulp out of them because they know they are rentals. Since it’s not their property, some renters may smoke in the car, grind beach sand into the carpet, or let their Big Macs and fries drip on the seats.
In addition to those concerns, rental vehicles tend to be the stripped-down base model or have few options. Car manufacturers add option packages as a great way to increase profit on things most car buyers want, but rental car companies tend not to go for them.
If you’re looking for a vehicle to get to work and back, rental companies have them. If you’re looking for a car with a manual transmission, 4G Wi-Fi, and semi-autonomous driving, and a great audio system, you should probably look elsewhere.
Finally, while the low resale value helps you buy a lot of car for the money, it hurts when it’s your turn to sell. Potential buyers may try to low-ball you, and the perceived treatment of rental cars could give them one more argument to lower your price. CarFax and VehicleHistory.com have this information.
Tips on Buying a Used Rental Car
If you’re interested in buying a used rental car, look for vehicles with an extended powertrain warranty, such as Hyundai and Kia. Look for vehicles with a high-reliability score, a clean vehicle history report, and safety features.
Your best bet is to take the car to a trusted ASE-certified mechanic for a full inspection. Or take it to a dealership of the same brand and ask for an inspection they would perform if you were trading the vehicle in. You will pay around $150. But it’s a thorough inspection, and your peace of mind will be worth it.
Pull the vehicle history report. Like the inspection, it’s inexpensive, and at worst, it provides valuable information. You may find an undisclosed repair or collision on the report, which could help you negotiate a better price or extended warranty. Or decide not to buy it all.
Check to see if the vehicle has any open recalls and whether the work has been performed. If not, it’s generally not a big deal as dealers fix recalled parts for free. However, the parts can be back-ordered in some situations, as in the massive Takata airbag recall, so be sure to research potential recalls on the model of interest. Contact the dealer service department of that brand, give them the vehicle identification number, and they can tell you quickly.
Lastly, make sure the vehicle has the safety features you want. Backup cameras have been standard equipment since 2018, but automatic emergency braking won’t be standard until 2022. If you want all the safety features, make sure to review the options list.
Buying a used rental car shouldn’t be any more stressful than buying any other car. If you’re willing to deal with a few more miles on the odometer, the money saved could be worth it. Just be sure to do some thorough research before buying, and you’ll get a great deal on a used car with lots of miles left in it. As usual, if the deal seems too good to be true or significant repairs may be coming soon, don’t buy it.
P.T. Barnum said, “there’s a butt for every seat.” You just might find a great vehicle.
If you have had experience buying a rental car, give us a comment below or comment on the NMA’s Facebook Page.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum, and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.