There are many outlets for buying a pre-owned car these days. One method of reliably finding a large selection of relatively new vehicles is buying from a rental fleet.
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.
One of the major benefits of buying a former fleet vehicle is attractive pricing. It's not a steadfast rule that you'll always get a bargain buying an ex-rental car, but rental companies aren't afraid to undercut market value on their cars to clear inventory quickly.
Since there's so much turnover in the rental industry, a large selection of rentals is usually available. Additionally, rental companies almost exclusively use cars that are a couple of years old at most, so buying used from a rental agency could be a great way of getting a deal on a newer pre-owned vehicle. Some rental companies also offer haggle-free pricing, which can streamline the buying process and reduce the headache involved with negotiating.
Rental companies also rigorously inspect and maintain their fleets. Additionally, some rental agencies provide service records or even certified pre-owned programs.
One major drawback to buying a used rental car is mileage. Although the vehicles in rental fleets are relatively new, they tend to be driven much more than cars owned for personal use. While you'll probably come across a wide selection of cars and trucks that are two years old or less, they could have upwards of 50,000 miles in some instances. Again, rental fleets tend to be well-maintained, but that's still a lot of miles over a short period.
The high mileage can also have a negative impact on potential resale value. Even if you buy a rental with relatively low miles that's meticulously maintained, its rental history can still lower its resale value. There's a stigma that rental cars tend to get driven harder than privately owned cars. That, combined with the wear and tear of the cars changing hands frequently, can hurt resale value.
Additionally, rental companies tend to stock their fleets with base trim vehicles with limited options. While the selection of rental vehicles for sale is usually high in quantity, you'll likely struggle to find examples with upscale trims or pricey options packages.
There are a few tips to consider when you're thinking about buying a used car from a rental company. Remember, these vehicles have been put through the ringer and driven by many people, so it's important to take your time to make the decision. Here are three tips:
As is the case when buying any used car, you're going to want to give the vehicle a thorough inspection. If you're a first-time car buyer or otherwise not a used car expert, consider having someone go with you. The rental company likely will have maintained the car thoroughly, but keep an eye out for interior or cosmetic wear caused by previous renters.
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 considering isn't covered under the warranty, you typically have the option to add an extended warranty either through the seller or your own insurance company.
Once you've looked at the car with your own eyes, ask the rental company for a vehicle history report. Most rental agencies will provide detailed records of servicing and inspections.
As previously mentioned, some rental companies will offer certified pre-owned vehicles. Enterprise, Hertz, and Avis all offer CPO programs. Although their inspection and certification processes may not be quite as rigorous as manufacturer programs, they all offer one-year warranties and a seven-day return or exchange window.
Most people like to shop for the best deal they can find, which is a good way to save on both prices and interest rates. As previously mentioned, there's no wondering if you're getting the best price on the deal you're seeking because several rental companies typically offer no-haggle pricing. This often means that the price you see is the price you pay.
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.
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, to get the financing you need. These lenders can be a little tougher to work with if your credit is suffering, though.
Since these fleet vehicles have been through so much, it's important to ask the right questions when you're thinking of buying a used rental car. Here are four questions to ask.
Typically, rental cars are only a couple of years old at most and were sold directly to the fleet from the manufacturer, but it never hurts to ask for a clearer timeline of the vehicle's history.
Many rental agencies will provide detailed vehicle reports, but you might need to ask them to do so. Ideally, the vehicle you're looking at will have a clean history, but if there is an accident in the report, be sure to inquire about the severity of the damage and the subsequent repairs.
Ideally, the rental agency adhered to a strict maintenance and inspection schedule. You should see regular maintenance at pre-determined intervals, as well as other fixes as needed.
Long-term rentals are often more desirable than those rented for daily use. Long-term rentals will have had fewer drivers, which lowers the chance that the vehicle was rented by someone who pushed the car hard.
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!
Auto Financing Writer
Sean has over 2 years of experience writing for CarsDirect and a deep knowledge of automotive brands and pricing data. A SoCal native, he is also an avid car enthusiast with a background in sports journalism. Sean is a graduate of California Lutheran University with a Bachelor of Science in Business. Read more
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