Buying a Rental Car: Know the Pros and Cons
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Buying a rental car may seem risky. With so many previous drivers, will a used rental car be reliable? Is that bargain price on a rental car the great deal it appears to be?
The answers depend on the vehicle itself, just as it does with the purchase of any used car. But there are some general pros and cons to weigh to determine if buying a used rental car might make sense for you.
The biggest U.S. rental car companies are Enterprise Holdings, Hertz Global Holdings and Avis Budget Group, the parent companies of numerous rental agencies. Their car sales divisions sell cars — both rentals and non-rentals, such as customer trade-ins — directly to consumers. They also sell cars to auto auctions and back to automakers, who then sell them on lots as “program cars.” So the car you buy from a traditional used car dealership could be a former rental car.
Is buying a rental car a good idea?
The pros list for buying a former rental car is actually a long one. Here are some things to consider:
Rental cars are well maintained
Car rental companies follow strict service and maintenance schedules. The last thing any rental company wants is bad online reviews from angry customers about broken-down cars. When you buy a used rental car, it has likely been inspected and serviced more consistently than used cars sold by private owners. Also, you can request a copy of a rental car’s maintenance history — something that may not be as easily obtained for a privately owned vehicle.
Rental cars are sold as newer models
Car rental companies typically update their fleets every year or two, so buying a former rental car can be an opportunity to purchase a newer-model used car with more recent technology and safety features. Also, a rental car that’s only a few years old may still have some of its original manufacturer’s warranty coverage remaining.
Purchased rental cars usually come with an extended warranty
Enterprise Car Sales, Hertz Car Sales and Avis Car Sales all provide 12 months or 12,000 miles of limited powertrain coverage at no added cost. The coverage starts the day you buy the car and typically doesn’t extend any remaining manufacturer’s warranty, so ask about the start and end date of each. If you’ll be counting on the manufacturer’s warranty, make sure it can be transferred to you as the new owner.
Used rental cars usually sell for competitive prices
Used cars purchased directly from rental companies are often priced lower than the same car from other sources. One reason is that car rental companies buy high volumes of cars directly from automakers at reduced prices, so they’re able to sell the car for less.
As a pricing reference, car rental companies use popular online guide Kelley Blue Book. Avis says it prices vehicles below the KBB typical dealer listing price for the area, and its online listings show this price difference. Hertz listings include KBB’s fair market range, an estimate of how much you should expect to pay for that vehicle. Most of its vehicles fall below or in the lower end of the KBB range. Enterprise claims that 75% of its vehicles are priced below the KBB typical listing price.
Before buying a used rental car, check listed prices against actual online pricing guides — like KBB or the National Automobile Dealers Association — to make sure you’re truly saving money.
If you buy a used electric vehicle from a rental car company, you may qualify for the federal EV tax credit of up to $4,000. Check with the rental car company to see if you’re eligible and whether you can deduct any credit from the car’s upfront cost.
Shopping for used rental cars is easy
The major rental car sales companies have websites with tools to help you search by vehicle type, age, price, mileage and more within a radius you designate. The car prices listed are “no haggle,” so if you dislike negotiating you can avoid that stress. The price you see is what you’ll pay.
You may have a longer period to try out a used rental car
When you find a car, you may be able to arrange an extended test drive, as opposed to the quick spin around the block typically allowed at traditional dealerships. For example, Hertz and Avis offer a free two-hour test drive, or you can pay a rental fee to drive the car for up to three days. If you decide to buy the car, the rental fee is refunded.
Karl Brauer, executive analyst at automotive research website 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 buy a used rental car from Hertz and aren’t happy with the purchase, it 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.
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When is it bad to buy a rental car?
The cons list for buying a former rental car is shorter, but definitely consider these potential downsides.
Used rental car inventory is more limited
If you have a specific make and model of car in mind, you may not be able to find it through the sales division of a rental company. Compared with a national chain like CarMax, rental companies tend to have less variety. Also, 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.
For several years, vehicle shortages resulting from the COVID-19 pandemic made it difficult for rental companies to obtain cars, leaving them with less inventory to sell. As auto production has recovered and rental fleets have been replenished, the inventory of used rental cars to buy is returning to normal. However, many rental companies had to hold onto cars longer, so some of the cars they’re selling now may be slightly older and higher mileage than cars sold four years ago.
Expect rental cars to have higher mileage
With rental cars driven by more people over long distances for a short period of time, they usually have more miles on the odometer than a typical used car of the same age. According to the Federal Highway Administration, the average person drives about 13,476 miles a year or nearly 27,000 over two years. In comparison, most two-year-old rental cars currently for sale on the Enterprise, Hertz and Avis websites have mileage of 50,000 to 70,000 or more.
But David Bennett, repair systems manager at AAA, 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.
According to Bennett, most rental car agencies do follow strict service and maintenance schedules. They use certified technicians and conduct their own multipoint inspections before putting vehicles on the market.
Compared to similar used cars, rental cars may have more wear and tear
Along with higher mileage comes the potential for more wear and tear, both cosmetically and mechanically. It’s a common perception that non-owners driving rental cars won’t treat the car with care, resulting in more damage than you would find on an owner-driven car. That’s likely to be true in some cases, but most rental customers want to limit damage to avoid paying for it. Still, wear and tear on the car should factor into your decision.
Former rental cars may have a lower resale value
If you sell the car at some point, you may find its resale value is less than a comparable car of the same model year. The lower price you pay upfront will reduce the car’s value later. Also, concerns about vehicle mileage and condition may carry over to potential buyers, who can see in a vehicle history report that the car was once a rental.
What’s the process for buying a used rental car?
When buying a former rental car, you’ll want to follow many of the same steps that you would when buying any used car. That includes taking time to research the car’s history and care.
Search rental car company sales websites for a vehicle you want. If you find one, you can usually handle most of the purchasing process online or by phone, with documents sent to your home.
Schedule a test drive, which most rental companies enable you to do online. If the car isn’t near you, they may be willing to transfer it to a closer location for a fee.
Request maintenance records or a copy of the car’s inspection report. Make sure any recalls have been addressed.
Ask for a vehicle history report, which is often supplied for free. Have the car inspected by an independent mechanic you trust.
If you need financing, get preapproved for an auto loan through a lender you choose. Rental car companies do have lending partners, so you can apply for an auto loan through their websites. But it’s smart to have your own loan lined up first to compare and ensure you’re getting the best rate.
If you plan to trade in a car, know what’s a fair price to expect. Rental car companies do take trade-ins and offer website valuation tools that give you an idea of what your car is worth, pending a final appraisal. Still, it’s a good idea to do your own research through car buying sites and guides.
Be prepared for upsells like extended warranties and prepaid maintenance plans. Although a rental car’s purchase price is fixed, it’s likely that you’ll be offered add-ons. Be ready to decline and avoid the cost of any extras you don’t need.
Schedule to pick up your car at a dealership or have it delivered to your home (if available). Some rental companies, like Hertz, offer a home delivery service with any shipping fees included in your overall cost.
