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Should You Consider Buying a Rental Car?

If you’re shopping for a used car, buying a rental can mean huge savings with prices under market value. Former rental cars are also usually well-maintained and, thanks to a 2015 law, must have safety recalls addressed before they can be sold, which isn’t a requirement for other used vehicles.

However, buying a car from a rental company does typically mean taking on a vehicle with lots of miles relative to its age, along with the wear and tear of different driving styles. You may also be limited to certain brands or other options. We’ll walk you through the pros and cons, and also tell you some rental cars to avoid.

The benefits of buying a rental car

  • Price. The rental company already made money on renting the vehicle, so it doesn’t need to sell it for thousands over market value to make ends meet. Rather, used rental cars usually sell under market value.

    To find the market value of a car you’re considering, you can use NADAguides or Kelley Blue Book, both of which are free online tools that provide the industry standard in car values.

  • Maintenance. Rental cars are typically well-maintained, inside and out, especially since Congress approved new rules in 2015 requiring rental car companies to address any safety recalls before selling any of their vehicles. Before this law, older used rental cars could have been driven for a while with a safety defect that could hurt the long-term reliability of the vehicle.
  • Cosmetic condition. Given the high fees a rental car company typically charges for any spill, ding or dent, used rental cars are generally in good cosmetic shape. They are typically cleaned after every rental and detailed thoroughly before being put up for sale.
  • No price haggling. Companies that sell former rental cars such as Enterprise, Hertz or Avis typically offer fixed prices. Other used car sellers offer the same thing, including CarMax and Carvana, but their prices may be higher.

    The car’s price isn’t the only thing involved in buying a car, however. Remember that money is made not just from the profit margin on selling a car, but also on the profit margin from financing those sales. Don’t just take what the dealership finance person tells you is a good loan. Instead, shop for the best car loan by doing a few applications at your bank, credit union and online lender. You won’t hurt your credit by applying for multiple loans anymore than you would by applying for one loan as long as you do them within a 14-day window. You can read about getting a preapproved car loan here and fill out an online form with LendingTree to get up to five potential auto loan offers, depending on your creditworthiness.

The drawbacks of buying a rental car

  • Miles. Used rental cars usually have a lot of miles relative to their age — most U.S. drivers put 12,000 to 15,000 miles on their cars each year, and rental cars regularly travel double the distance in the same amount of time.
  • Wear and tear. How a vehicle is driven can greatly influence how long it lasts. Hard acceleration and hard braking wear down everything faster as well. Multiple drivers simply renting a car for a weekend would have less incentive to drive it prudently. It’s likely that at least some of the drivers drove the car hard and could have worn down the car more than its age suggests.
  • Lower resale value. Rental cars are a great buy for owners who plan to hold on to them. But if you plan to resell a rental car, you might have to price it under fair market value to account for the potential stigma of it being a rental car.
  • Limited warranty. Because of the amount of miles on the vehicles, the manufacturer’s bumper-to-bumper warranty may be expired. In many cases, only the powertrain warranty may remain, although the used rental car may come with a warranty or return policy from the seller. You may also be able to buy an extended warranty — here’s how to find the best extended car warranty.
  • Limited inventory. Car rental companies buy in bulk, tending toward makes that they know will please most rental customers. You might not be able to find a specific or rare color or the top of the line trims in used rental car sales inventory.

Things to do before buying a rental car

Test-drive and conduct your own inspection. Even though a rental car has presumably been well maintained, check out the car yourself. Inspect the car inside and out and during the test drive, make sure the car can accelerate quickly and stop quickly, listening for any weird noises. Here’s how to navigate a used car inspection.

Request a copy of the vehicle history report. A vehicle history report (VHR) could tell you exactly how the car was maintained, whether there are any open recalls on it or if it was in an accident and, if so, how serious it was. Most rental car companies provide VHRs to potential customers for free, or you could buy one yourself from CarFax, AutoCheck or the National Motor Vehicle Title Information System.

Get an independent mechanic inspection. As used rental cars may have been driven hard by many types of drivers, it’s not a bad idea to have an independent mechanic give it a thorough inspection to check for any early warning signs of problems that could cost you later down the road, after the warranty runs out.

Where to buy used rental cars

Enterprise, Hertz and Avis have the largest rental car fleets in the U.S., and each has its own outlet to sell used rental cars after they’ve outlived their rental service age. You can also take a long test drive or rent the rental car you’re considering purchasing. If you don’t decide to buy it, no problem — just pay the rental fee (if there is one). The companies usually sell the best condition rental cars themselves and put others to wholesale auction for other car dealerships to buy and sell.

Buying a rental car from a dealership or used car lot, not directly from a rental car company outlet, could mean that the car isn’t in the best shape. Sometimes, car dealerships will call the cars “program cars” instead of rental cars to hide that fact. If this is the case, be a bit wary and make sure the car is in good condition.

Rental cars to avoid

It’s in a rental car company’s best interest to stock the safest and most reliable vehicles, but that doesn’t mean all rental cars are created equal. Popular makes and models will vary by company and location, but we looked at common rental vehicles in four categories — economy, standard, full-size and luxury — at Charlotte Douglas International Airport in Charlotte, N.C., home of LendingTree headquarters. We give you vehicles to steer clear of as well as alternatives for each.

Ford Focus, the economy rental car to avoid

Transmission problems have plagued the Focus and were the subject of a class-action lawsuit. Ford retired the car as part of a plan to move away from sedans, but it’s still possible to find 2018 and older models. The National Highway Traffic Safety Administration gave the 2018 version a 5-star overall rating despite giving it only 4 stars for how it performed in rollover crash tests. Critics dinged the Focus for sluggish acceleration, a cramped back seat and low-quality interior trim touches.

Alternative: Mazda3

Nissan Rogue, the standard-size rental car to avoid

OK, the Rogue isn’t actually that bad. It has plenty of room (for a compact SUV) and decent acceleration. It’s just not the best — it earned 4 out of 5 stars from the NHTSA in 2019. Nissan is still working the kinks out of its advanced driver assistance features. The 2019 and 2018 models have recalls to fix the backup cameras not displaying an image and the automatic high beams may turn off from their own light being bounced off small roadside reflectors.

Alternative: Chevrolet Equinox

GMC Yukon, the full-size rental car to avoid

The Yukon’s brake response is sluggish and that’s not including two recalls on the 2018 Yukon to fix brake-related problems. You might expect this SUV to be roomy and powerful, but critics find its cargo space limit and its standard engine slow to respond. You could extend your cargo space by folding down the third row of seats, if you don’t need them. But expect to do some lifting as the Yukon has a high trunk floor.

Alternative: Chevrolet Suburban

Jaguar XF, the luxury rental car to avoid

The Jaguar XF has a less powerful engine and mediocre interior when compared with rivals and then there’s its head-scratching infotainment system, which critics say isn’t intuitive to use. The XF isn’t rated by either the NHTSA or Insurance Institute for Highway Safety (IIHS).

Alternative: Chrysler 300

 

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