Advice: Should You Buy A Former Rental Car?

resale value

When I get a listener to my radio show who is talking about buying a used car, I always end the conversation advising him or her to be sure to look at a vehicle history report to make sure there were no issues with the car.

Generally, you are looking for previous accidents, flood damage, or odometer discrepancies.  Often, when people look at a history report, they find out the car they are considering started its life as a rental car.  This is concerning to some people, so I thought it would be good to look at any pros and cons of buying a former rental.

On the plus side, rental car companies usually have very stringent maintenance policies.  They are very diligent with oil changes, tire rotations, etc.  Computer programs assure that the important maintenance items and any recalls that come along are performed.  In fact, I would take most rental car maintenance practices over most private car purchasers.

On the down side, and the biggest fear of people considering a rental to purchase, is how was the car driven?  While there is no way to know, rental cars are sold now with fewer miles, and most rental cars are driven by people over 25 years of age, it is very expensive for people younger than that.  Most people drive reasonably in a rent car, but are often not as careful with food and drinks, but cosmetic issues like this are easily fixed before purchase.

Rent car companies generally repair exterior dents and dings very quickly since they charge the person renting the car for damage.  Some rental companies do their own minor body repairs, and these will not show up on a vehicle history report.  More severe damage is usually billed to an insurance company, which will be listed on a history report.

One thing to look for in a former rental is standard equipment and options.  To save money, rental companies often special order cars and cut out options like OnStar and XM radio.  Five years ago or so, Enterprise Rent-a-car was busted for deleting side airbags in some of the cars they rented and ultimately sold.

All in all, I have no problems with former rental cars under the right circumstances.  Rent car companies are a huge supply source to the used car industry.  You should always double check and see how much of the factory warranty is remaining, and make no assumptions.  One good example is Hyundai and Kia taut the 10-year/100,000 mile warranty, but if you buy one used, it is only 6-year/60,000 miles.

Here is the big caveat for me when looking at a former rent car:  buy it from a new car dealer and only if it is factory certified.  Some rent car companies sell cars direct to the public, but I do not recommend this.  I think there is risk of the rent car company hiding things.  A factory certified car generally has a checklist of 150 to 180 items that must be gone over by a factory certified technician.  You generally get a warranty included for up to 100,000 miles or more.  For me, the process of a former rental passing the certified inspection is critical.

As with any used car purchase, be careful, do your homework, and again, be sure to see a vehicle history report before pulling the trigger.

Photo Credit: Shutterstock/View Apart
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