Cars today are more expensive than ever, even on the used market, and many shoppers view former rental cars as an opportunity to land a used vehicle at a discount. Other shoppers, however, view them as ticking time bombs to be avoided at all costs. So, what's the right choice?
If you're shopping for a used car, chances are you've already looked at some former rentals because used car dealers' lots are full of them. Buying an ex-rental car, just like buying any other used car purchase, has its benefits and its drawbacks in terms of mileage, maintenance, model year, resale value, and more. Here's a look at both the pros and cons of buying a former rental.
The Pros and Cons of Buying a Rental Car
- Pro: Former Rental Cars are Typically Newer Models
- Con: Rental Cars Often Have High Mileage
- Pro: Rental Cars Get Regular Maintenance and Cleaning
- Con: Rental Cars are Likely to Have Suffered More Wear-and-Tear
- Pro: You Can Buy Former Rentals at Lower Cost
- Con: Your Former Rental Will Have a Lower Resale Value
- The Bottom Line
Pro: Former Rental Cars are Typically Newer Models
Rental car companies want to entice customers with fresh vehicles, not models from 10 years ago. No one wants, or expects, to rent a car that feels old and tired. To make room on their lots for the new cars that they buy on a regular basis, car rental companies need to sell their “older” cars—vehicles that are usually only a couple years young, which is ideal for used car buying. A two-year-old former rental car may come with recent technology and safety features, and a manufacturer’s warranty, but at a lower price than the same two-year-old model driven by a single owner.
Con: Rental Cars Often Have High Mileage
If low mileage is high on your list of priorities, you should know that a one- or two-year-old rental car will likely have higher mileage than a similar privately owned car. The big rental companies usually sell vehicles at 25,000 to 40,000 miles—and these miles tend to be hard-driven ones since they come from multiple drivers who may not be inclined to take good care of the car.
Pro: Rental Cars Get Regular Maintenance and Cleaning
Although a vehicle may have been driven hard during its tenure as a rental, it's also likely to have a rock-solid maintenance history. While renters may not have pride of ownership, rental car agencies do—it's in their best interest to keep their vehicles in top condition. That's why the most reputable rental companies follow maintenance schedules to the letter and hire well-qualified in-house mechanics or outsource the service of their vehicles to trusted dealerships. If a rental car breaks down, it can't make the rental agency any money. As such, those rental companies are inclined to keep their cars mechanically sound.
In fact, many rental car companies take such good care of their cars that they are willing to offer their own warranty on car sales, as well as other types of coverage to sweeten the deal. This sets them apart from most used car lots, where you may have to haggle for an extended warranty . Avis, Hertz, and Enterprise all offer a 12-month/12,000 mile limited powertrain warranty. All three companies also note that many of their sale vehicles are still under the original factory warranty.
Con: Rental Cars are Likely to Have Suffered More Wear-and-Tear
As mentioned above, the miles on rental cars can be tough miles. Different driving styles can lead to early wear. Each new driver will naturally drive the car a little differently than the last, and they may be rougher on the vehicle as they get used to driving it. While most renters don't want to damage the vehicle (because they will have to pay for it), many customers are more aggressive with rental cars than they would be with their own vehicle.
Furthermore, while an ex-rental car may be in tip-top mechanical shape and have a full maintenance record, the amount of time these cars are in use will inevitably result in some cosmetic wear. Exterior scuffs are common, as is excessive wear on the interior. Given that a rental agency is trying to keep their cars in use as often as possible, you can expect a rental car to have suffered more wear to its upholstery and floor mats.
Pro: You Can Buy Former Rentals at Lower Cost
Since rental agencies buy their new vehicles in volume at a discount and need to sell cars in order to replenish their rental fleet, they usually offer low prices on their car sales.
"We're not looking to make a ton of money on our used cars," Gregg Nierenberg, Vice President of Fleet Services at Avis Budget Group, told NerdWallet.com in October 2017.
Avis, Enterprise, and Hertz all have easy-to-use websites where consumers can sort through the used vehicle offerings in their area. All three also list no-haggle pricing: the no-haggle price means you'll know upfront what you can expect to pay (financing options will depend on your credit score, of course). Both Avis and Hertz offer a three-day test drive where the customer pays the rental fee up front, but that fee gets refunded if the driver buys the vehicle.
Con: Your Former Rental Will Have a Lower Resale Value
A former rental may cost less money up front, but it will also return less money down the road. Getting maximum resale value for a used rental car is difficult, because many shoppers are wary of buying former rental vehicles, so much so that some states have passed laws allowing car dealerships to call rental cars "program cars" in hopes of avoiding the stigma. The value for former rentals is also impacted by the fact that these vehicles are sold in such high volume. When the market gets flooded with thousands of cars of the same make and model, all at more or less the same time and with similar mileage, the price for that make and model gets driven down.
Lower resale value won't matter to a customer planning to drive the car into the ground, but for drivers who plan to trade in their vehicle in a few years and hope to get a chunk of cash in return for their trade-in, it's important to note the lower resale value of former rental cars.
The Bottom Line
On CarGurus, all rental cars are marked as "Fleet," but not all cars marked "Fleet" are former rentals. To find out if a CarGurus "Fleet" vehicle was a rental, check the vehicle's history report. Of course, purchasing a vehicle history report and asking for service history documentation are steps every customer should take when buying a used car, but it's especially important when looking at a former rental. Taking a former rental to an independent mechanic before purchasing it is also recommended. Keeping all these pros and cons in mind, a former rental car can provide relatively new tech and safety features at an affordable price.
