Is Buying a Rental Car a Good Idea?

Used rental cars are affordable and well-maintained, so budget shoppers may not mind the limited inventory and the extra mileage from past drivers.

Nicole ArataOctober 4, 2017
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Buying a rental car may sound risky. With so many previous drivers, will it be a worn-down junker? But used-car shoppers needn’t worry. Former rental cars tend to be well-maintained, easy to buy and priced below-market.

Buying one from a major rental company is a lot like buying from a used-car dealership. They inspect their vehicles before sale, may even offer warranties and allow you to trade in your current vehicle.

Still, there are some special considerations when buying a used rental car.

Why rental companies sell cars

Rental companies buy new vehicles to build their fleet. Then, to keep their inventory up-to-date and make room for newer models, they sell some of their cars every year at auctions, to dealerships or directly to consumers. In fact, some people buy rental cars from used-car dealerships without realizing it.

The biggest rental car companies in the U.S. are Enterprise Holdings, Hertz Global Holdings and Avis Budget Group, the parent companies of a number of rental agencies. They sell cars directly to consumers through their car sales divisions, which you can find online.

More wear and tear, but well-maintained

Potential buyers might worry that a rental car has been beat up by countless drivers who don’t care about long-term maintenance. And this isn’t far off base, says David Bennett, manager of Automotive Programs at AAA. Renters “may not take as meticulous care of the vehicle that is not theirs,” he says. At the same time, drivers generally want to limit the damage they do to avoid being charged.

While there may be more scratches and stains, steps are taken to ensure rental vehicles are running smoothly before being sold.

Most rental agencies keep their vehicles very well-maintained, Bennett says. The three big players all follow strict service schedules. They use certified technicians and conduct their own multipoint inspections before putting their vehicles on the market.

“We can't control how our customers drive our vehicles, but what we are very confident of is how we maintain the vehicle throughout its life,” says Gregg Nierenberg, vice president of fleet services at Avis Budget Group.

Nearly-new used cars with higher mileage

Rental cars tend to have more miles on the odometer than a typical used car of the same age — a concern for many buyers. But Bennett stresses that mileage is “just one factor” in judging a vehicle. “You could have a very high-mileage car and it's been maintained very well, and the car is great,” he says.

Avis generally pulls its cars out of rotation after 12 to 18 months and 25,000 to 35,000 miles, according to Nierenberg. Enterprise vehicles spend an average of 12 months as rentals before being put up for sale, and Hertz says many of its vehicles “are still 25,000 to 40,000 miles young.”

Plus, since rental companies sell relatively new cars, they may still be under the factory-included warranty. Hertz and Enterprise vehicles also come with limited warranties for 12 months or 12,000 miles.

Lower prices, and no haggling

Rental companies sell their cars with no-haggle prices that can include bargains. The companies need to move cars out of their fleet quickly, which translates into lower prices for buyers. “We're not looking to make a ton of money on our used cars,” Nierenberg notes.

Rental agencies price their vehicles below retail values, using pricing guides like Kelley Blue Book. And indeed, compared with the Blue Book price of a 2016 Toyota Camry, a buyer could save more than $1,000 in some cases. Still, always check prices against online guides before buying.

Limited inventory, but easy to shop

Most rental cars don’t come with customized options like upgraded stereos or tinted windows — so if you're looking for upgrades, you may not find them. This can be especially important if you want particular safety features. Also, there may be a smaller variety of makes and models compared with a national auto chain focused on car sales, like CarMax. But if you don't immediately see the vehicle you want, it may be worth checking back since inventories are updated frequently.

When you find a good candidate, Avis and Hertz offer three-day test drives, as opposed to the typical 15-minute spin around the block you do at car dealerships. You’ll need to pay a rental fee for this, but it’ll be refunded if you buy the car. Enterprise offers something different: You can return a car from it within seven days or 1,000 miles, no questions asked, though you’ll pay a $200 fee.

If you decide to buy a rental car, you can complete much of the process online, over the phone or in person. In most cases, contracts can be signed at a rental location or even delivered to your home or office.

Before you buy

Remember to do all the usual homework before buying a used car. Have the car inspected by an independent mechanic you trust. Also check maintenance records or read up on the rental company's service policies. Some provide a vehicle history report, but if not, pull one yourself from AutoCheck or Carfax. Car rental companies can also provide financing options, but it's smart to shop around and get preapproved for an auto loan to get your best rate.

Whether a rental car is right for you depends on your preferences. If you don’t mind a somewhat limited inventory, relatively higher mileage and a bit of wear and tear, rental agencies can offer low, fixed prices for well-maintained cars.

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