Have you ever enjoyed your time in a rental car so much that you wanted to bring it home? Whether it be a Mazda 5, or a Ford Mustang convertible, rental cars give us all a chance to climb behind the wheel of a vehicle we may otherwise never get the opportunity to drive, effectively making each trip a test drive of sorts. And armed with the right information, approaching each rental with that attitude may end up being a very wise financial decision.
The reason is because rental cars — which have a relatively short shelf life for rental car companies — are consistently hitting the used car market in large quantities, and are typically sold for well below their value. Not only that, but the rental companies that sell them off do so in contrast to traditional car dealers, by using set prices, and no haggling.
For many a stressed car buyer, the system may sound like a godsend.
The used rental car market, and prospective savings for consumers, was the focus of a recent article from Kiplinger, which explained a few major reasons why buying a used rental car may be a great alternative for those in need of a vehicle. One reason, the article says, is that both Hertz and Avis/Budget allow you to select a prospective vehicle from an online listing, and book an extended test drive of up to three days. Some will even buy the car back from you if you make a purchase and change your mind.
Another reason, Kiplinger says, is the pricing. For example, a Hyundai Elantra that Hertz was reportedly selling had only 35,000 miles on it, and was selling for 15% below its Kelley Blue Book estimated pricing. And there are savings like that all over rental fleet lots. With a huge selection of vehicles, as well.
The main issue for many buyers is getting over the very notion of buying a used rental car. For some, the thought that hundreds of people have previously driven their vehicle (and done God-knows-what inside of it) is a bit off-putting. Also, many rental vehicles tend to be very basic, and lack the bells and whistles, or customizability, of buying a new car, or one from a dealership — though that’s not always the case, as rental companies have expanded their inventories to adapt to consumer demand.
While it’s true that rental cars will have been driven by lots of other drivers for the first year or two of their lives, those looking to purchase a used one are essentially getting a substantial markdown on the sale price to put that fact out of their minds. In other words, if you can get over it, or simply don’t care at all, it can end up saving you a lot of coin.
Another reason why buying a used rental car is that they are well-maintained. In fact, rental cars are probably better-maintained than any used car you’ll find on the market, considering that rental companies employ armies of mechanics and maintenance technicians, who ensure that everything is in working order and make sure that all required maintenance is completed at regular intervals.
Even with all of the potential upsides, there is still, justifiably, a lot of concerns from car buyers about purchasing a used rental car. And there has been plenty of media attention given to that concern. There are a lot of questions that buyers will have, of course, including how long a car has been with a given company. The answer is, on average according to The Fool, that rental companies hold their vehicles for a little over a year, but it can range between four and 22 months.
Another thing to take into consideration is the warranty. While most vehicles that hit the used market will still be covered by a manufacturer’s warranty, there are still things to be wary of — especially since you’ll never know a vehicle’s complete history. Manufacturers have all manner of length and detail concerning their warranty, so if you want to play it safe, do your homework.
It may be off-putting to some, but the market for used rental cars may be an excellent option to snag a great deal on a new vehicle.
Follow Sam on Twitter @SliceOfGinger