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Buying a rental car may sound risky. With so many previous drivers, will it be reliable?
According to the experts, used-car shoppers don’t need to worry. Former rental cars tend to be well maintained, easy to buy and competitively priced.
You’ll enjoy many of the benefits you would get by purchasing from a used-car dealership, as well as some extra perks. The major rental agencies inspect their vehicles before sale, offer warranties, accommodate an extended test drive and allow you to trade in your current vehicle.
Still, there are some special considerations when buying a used rental car.
Why do rental companies sell their cars?
Traditionally, rental companies update their fleets every year or two because they get big fleet discounts on new cars and have tax and other incentives to sell. In fact, many automakers will buy back rentals at a fixed price within certain time and mileage restraints and sell them as "program cars" on dealer lots. But rental companies also purchase vehicles outright, which they often later sell on their own lots.
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 — both rentals and non-rentals, such as customer trade-ins — directly to consumers through their car sales divisions, which you can shop online.
More wear and tear, but well maintained
Potential buyers might worry that a rental car has had countless drivers who don’t care about long-term maintenance. And that isn’t far off base, says David Bennett, repair systems manager 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 any damage to the vehicle to avoid being charged when they return it.
While rental cars may see more wear and tear from numerous drivers, steps are taken to ensure all required maintenance is performed. They’re also thoroughly inspected before being sold.
Most rental agencies keep their vehicles very well maintained, Bennett says. The three big players follow strict service schedules. They use certified technicians and conduct their own multipoint inspections before putting vehicles on the market.
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 — another potential concern for 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.
Plus, since rental companies sell relatively new cars — often only 1 to 2 years old — they may still be under the factory-included warranty. Avis, Hertz and Enterprise vehicles also come with limited powertrain warranties for 12 months or 12,000 miles.
However, vehicle shortages have affected rental car companies as well. When travel halted in April 2020, they dumped most of their cars to avoid bankruptcy. As travel resumed, they found new cars hard to come by. To cope, they've kept vehicles longer and even bought used cars for their fleets.
That means the cars you may see on their lots may have more mileage than in years past, have less warranty coverage or be beyond the term of their factory warranty.
Good prices and no haggling
Rental companies sell their cars with no-haggle prices that can include bargains. Good deals, however, may be harder to find in the current market. Prices initially dropped at the beginning of the coronavirus pandemic. Later, as used-car inventories shrunk, prices rose to market level or higher.
“If you’re just looking to save money by going to a rental car lot, it isn’t going to offer the great deals it once did,” says Karl Brauer, executive analyst at iSeeCars.com. “But if you like the other options a rental sales lot offers, it could still be a good choice.”
Buyers can still get good value for their money on certain makes and models, but do your research. Avis Car Sales says it prices vehicles below Kelley Blue Book’s typical dealer listing price for the area, and Enterprise Car Sales will show the typical listing price online if its own price is cheaper. Hertz Car Sales’ online listings put pricing in context by including Kelley Blue Book’s fair market range, which provides an estimate of how much you should expect to pay for that vehicle.
Before buying, it’s best to check listed prices against online pricing guides, such as Kelley Blue Book and the National Automobile Dealers Association, to make sure you’re actually saving money.
Limited inventory, but easy to shop
Most rental cars don’t come with options like upgraded luxury or performance packages. If you want a unique color or combination of options, you’ll probably have to look elsewhere. Also, there may be a smaller variety of makes and models compared with a national auto chain like CarMax. If you don't immediately see the vehicle you want, try searching a broader area and having the car shipped to your location.
When you find a good candidate, Avis and Hertz offer extended test drives of three days, as opposed to the 15-minute spin around the block typically allowed at traditional dealerships. You’ll need to pay a rental fee for this, but it’ll be refunded if you buy the car. (You can also schedule a free two-hour test drive.)
Brauer of iSeeCars.com says this extra time evaluating the car — parking it in your garage, hauling your gear, testing the enthusiasm of your family — “is a pretty compelling reason to shop the rental car sales lot.”
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.
If you’re not satisfied with your purchase, Hertz will buy back your vehicle within seven days or 250 miles, whichever comes first. Enterprise offers the same guarantee for seven days or 1,000 miles.
Before you buy
Remember to do all the usual research before buying a used car.
Have the car inspected by an independent mechanic you trust.
Request maintenance records or a copy of the inspection report.
Ask for a vehicle history report, which is often supplied for free.
If you're financing, it's smart to shop around and get preapproved for an auto loan to get your best rate.
While the salespeople are low-key and the car’s purchase price is fixed, be ready for upsells such as extended warranties and prepaid maintenance plans.