Should I Buy a Rental Car? The Pros and Cons
I am a serial entrepreneur and a consumer advocate. When I’m not helping car buyers, I love working on ventures that have a positive impact.
The common rhetoric surrounding used rental cars is that you should steer clear, but is this really the case?
Rental cars are often well maintained and newer than many other used cars on the market, making them a viable option for car shoppers on a budget. But rental cars are not without their risks.
In this guide, we share everything you need to know about buying rental cars to help you answer the question "should I buy a rental car?".
Which option is right for you? Buying a new car or a used car.
Table of Contents
Why Do Rental Companies Sell Cars
To keep their fleets up to date, rental companies buy new vehicles and sell their old ones. Each year, rental companies will make room for newer inventory by selling their older cars to dealerships, at auctions, or consumers. Used car dealerships may buy rental cars from rental companies to sell on their lots, so it's possible to buy a rental car from a dealership without knowing it. It's also possible to buy an auctioned car from a dealership.
Hertz Global Holdings, Avis Budget Group, and Enterprise Holdings are the most popular rental companies in the United States that sell their cars via car sales divisions. See our full comparison here.
What To Look Out For When Buying a Rental Car
Buying a rental car is much like buying any used car or demo car, and there are a few things to watch out for to ensure you're getting a good quality car. Here are the top factors to consider:
- Wear and Tear. Check the major, expensive components of the car for signs of wear or damage.
- Market Value. Based on the vehicle's condition, you should look up its fair market value.
- Recalls. Examine the vehicle history report to ensure there are no outstanding recalls.
- Warranty. Find out if the rental company offers a warranty of any sort and if the vehicle is still under factory warranty.
- Vehicle History Report. Request a vehicle history report from the rental company.
- Test Drive. Test-drive the used rental car to check for handling and sound. Make sure you don't hear or feel anything strange.
- Pre-Purchase Inspection. If you are seriously considering a certain vehicle, hire an independent mechanic for a pre-purchase inspection.
Buying a Rental Car: Pros
- Affordability. Rental companies purchase their fleets for a discounted rate, so they can provide at least a 10% discount compared to dealerships.
- Diligently Maintained Vehicles. Rental companies expertly maintain their vehicles according to the intervals recommended by the manufacturers.
- Excellent Cosmetic Condition. Most rental cars are in good cosmetic condition and have been detailed by professionals several times.
- Newer Vehicles. Rental companies don't keep their fleets for too long, so you can easily find great vehicles only one to two years old.
- Limited Warranty. Many rental companies offer a 12,000-mile or 12-month limited powertrain warranty. Some may still be under the vehicle's factory warranty.
- Simple Sale Process. Hertz, Enterprise, and Avid all provide haggle-free pricing options. Hertz and Avis also allow free two-hour test drives or a three-day "rent to buy" option.
Buying a Rental Car: Cons
- Higher Mileage. While rental cars tend to be newer, they also tend to have more miles. It's common to see rental vehicles for sale with two or three times as many miles as other cars the same age.
- History/Wear and Tear. Rental cars are driven many miles in short amounts of time.
- Lower Resale Value. Expect a lower resale value than a similar vehicle that wasn't a rental car.
- Lack of Upgrades. Most rental companies stick with the base models, without any fancy additions or upgrades, for affordability.
Should I Buy a Rental Car?
Used car shoppers looking for well-maintained cars for an affordable price should certainly consider rental cars. Always approach the purchase carefully, making sure to thoroughly examine the car, read the history report, and hire a mechanic for a presale inspection if you are really serious about a car. Make sure to ask the same set of questions you would when buying a used car.
Frequently Asked Questions
Is it a bad idea to buy a rental car?
Rental cars are affordable and well-maintained, but they do have some cons. Consider the uncertain history of the car and the lower resale value before making your decision.
What are the advantages of buying a rental car?
- Newer models available
- Well maintained mechanically and cosmetically
- Some warranties available
- Easy buying process
What are the disadvantages of buying a rental car?
- Wear and tear
- High mileage for the age
- Limited warranties
- Lower resale value
- The risk of potential repairs
- Few upgraded models available
What's the difference between CPO and a used rental car?
A certified pre-owned car (CPO) includes a comprehensive inspection and completed repairs before being sold. Used rental cars are not CPOs, but rental car companies strictly maintain their vehicles for their entire fleet lifecycle.
Why do rental companies sell cars?
Rental companies want to keep their fleets up-to-date to appeal to consumers and keep maintenance costs down. They sell older cars to make room for new inventory.
What are some tips for buying a rental car?
Buying a rental car can be an inexpensive way to get a newer used vehicle, but you must approach the purchase with caution. Ask for the vehicle history report, maintenance records, and warranty information. Inspect and test drive the vehicle yourself, and hire a mechanic for a presale inspection before buying the vehicle.