Buying a used rental car can be a good option, depending on the vehicle and your situation. As a borrower with less than stellar credit, you may have to do some searching if you need financing, though. Here's what you need to know.
Buying a Car From a Rental Company
Buying a used rental car, also called a program car or a fleet vehicle, may seem risky – you never really know who's driven them or how. And, they tend to have higher miles on newer cars, due to being driven more often as rentals. These risks are often outweighed by the fact that fleet vehicles are typically well-maintained in order to be safe for the kind of driving they're often subjected to.
This means that rental cars may be a decent vehicle option depending on what you're looking for.
Used cars are at a premium right now because of a shortage of new vehicles hitting dealership lots for the 2021 model year. If you're thinking of buying a used car now before prices go up, you may be looking into every option possible.
If one of them is buying a used vehicle from a rental company, there are a few questions you might have, and we have answers.
Buying a Used Fleet Vehicle: Q&A
- What kind of car can I expect to find at a rental agency? When you buy a program car, you're purchasing a used vehicle. These are cars that have been driven as rental vehicles but are typically only a few years old. However, since these cars have been driven by many people, they tend to be higher mileage vehicles. However, since rental companies know their cars are being driven so much they're typically really good about keeping up with a maintenance schedule, so the vehicles may be well cared for.
- Can I negotiate my price? Many people like to shop for the best deal they can find, which is a good way to save on both prices and interest rates. With rental agencies like Enterprise, Hertz, and Avis, there's no wondering if you're getting the best price on the deal you're seeking because these businesses typically offer no-haggle pricing. This often means that the price you see is the price you pay.
- Will it save me money? Buying a vehicle from a rental company typically can save you money, usually coming in around 10% lower than a used vehicle from a dealership.
- Is there a guarantee of maintenance? As with any used car, there's no infinite guarantee, but since rental vehicles are typically only a few years old, some may still come with remaining manufacturer warranties. Having a warranty helps to cover the cost of repairs if something should happen to the car while under warranty. If the vehicle you're looking at is no longer covered under the warranty, then you typically have the option to add an extended warranty either through the seller, or your own insurance company.
- Can I finance a fleet vehicle? You may be able to finance through some rental companies, however, as a bad credit borrower, you may need to secure a loan from a direct lender such as a bank or a credit union in order to get the financing you need. These lenders can be a little tougher to work with if your credit is suffering, though.
Buying a Rental vs. Buying a Rent-to-Own Car
Buying a car from a rental company isn't like getting a rent to own vehicle. Rent to own cars typically come from buy here pay here dealerships and don't carry the same kind of contract as a used car from a rental company. When you buy from somewhere like Enterprise, it's the same as financing a used vehicle through a dealership. You make monthly payments on your loan until it's paid off.
With a rent to own car, you pay either weekly or bi-weekly until you've paid the agreed-upon amount. Rent to own cars can be returned to the lot and you can walk away without consequence. If you decide you no longer want the vehicle you purchased or are financing through a rental agency, you'll have to sell the car yourself or trade it in for something else.
Ready To Find Your Next Vehicle?
If you're looking to save on a used car a former rental vehicle can be a good option for a lower-priced car. However, if your credit is standing in the way of your financing opportunities, you may have better luck with a subprime lender. These lenders specifically work with people in challenging credit situations such as bad credit, no credit, and even bankruptcy.
Finding one of these lenders can sometimes be a challenge if you don't know where to look, but at Auto Credit Express, we can help. We want to connect you to a special finance dealer in your area that is signed up with the lenders you're looking for. To get started now, simply fill out our fast, free, no-obligation car loan request form, and we'll get to work for you!