This is part of a seven-post series discussing our journey to buy a new car. Scroll to the bottom of this post to explore the entire series.
We think so–in fact, we just did it, and thus far we’re very impressed. You’ll get to read my review of Hertz’s Rent2Buy program very soon.
But I have no doubt that this post will be tough to swallow for many of you. When you tell someone you’re going to buy a rental car, I’ve noticed you get three types of responses:
- Indifference: 48% of people have either never rented a car, or treat them just as well as their own, so they have no opinion. However, they’ve “heard” that buying rental cars is not a good idea, so if pushed, they probably would not recommend it. Their typical response to you: “Okay, cool!”
- Horror: Yet another 48% will tell you horror stories about how they themselves have treated rental cars, or things they have heard through the grapevine. They are appalled that you would even consider such a travesty. Their response “OMG, never EVER buy a rental car.”
- Encouragement: Then there are the 4% that have actually purchased a rental car in the past. And without fail (I have yet to find an exception), they will tell you that they got an awesome deal and a reliable car for years! Their response: “You should totally do it.”
I’m generalizing in a big way, but the story is the same whether you poll your friends or Google the issue. Read between the lines, and you find that the people who have “walked the walk” would do it again. Those who have not, run scared. How about you?
Here are some points to consider (as we did) when looking at a potential rental car purchase:
Pros of Buying a Rental Car
There are some big benefits when you buy a rental car versus a dealer vehicle or a private sale. Here are a few:
- Price is the biggest benefit. For the car, year, and mileage you are getting, the price is well below “street value.”
- The vehicles are usually one or two model years back, so you get the latest features and safety equipment.
- Some rental programs let you try out the car for several days before you make the decision to buy. This is a good chunk of time to get a “feel” for the practicality of the vehicle and get it inspected by a mechanic.
- Less hassle, usually, then trying to deal with a private sale, since the company takes care of your paperwork, title, loans, etc.
- You usually get a short-term warranty or a money-back period to fix problems that become immediately apparent or if you change your mind.
- The rental company follows the manufacturer’s recommended service schedule, and you can expect that they fix all problems as soon as they come up (after all, a broken car can’t be rented). Hertz, in particular, apparently only sells the “cream of the crop” from their fleet–cars that have not had any major work done.
Cons of Buying a Rental Car
There are also some actual and potential negatives to weigh when it comes to rental car buying, such as:
- Most people’s first objection is “the car has probably been driven extremely hard.” You can let this be the deal-breaker, ignore the issue, argue that most people would drive rental cars responsibly, or ask “So what? The car can take it…”
- The car selection is limited to the specific rental company’s fleet. (We got lucky, since our model is popular with Hertz).
- Most of the cars in the fleet are the basic trim, so if you’re looking for bells and whistles as standard features, you need to look elsewhere.
- For the model year of the car, the vehicles are fairly high-mileage (20-25,000 miles per model year), although exceptions can be found.
- You have to put up with a fair amount of aesthetic blemishes. In other words, the car will be banged up, dinged, scratched, and blotched a bit more than usual.
- The cars are also fairly “dirty” on surfaces like cloth, carpet, etc. You’ll have to spring a few bucks for detailing or shampooing.
- You don’t get the benefit of a bigger warranty, like some “certified pre-owned” dealer cars.
What’s Your Take?
I’m curious to see where you stand on the issue. Have any of you gone through the experience in the past? Would you ever consider buying a rental car? Do you think I made the worst mistake of my life? (You can be honest, I don’t mind!)
This is part of a seven-post series on our new car journey. Below are links to posts that have already been published as part of this series:
- Our One-Car Experiment and Car Decision
- How to Sell Your Car on Craigslist
- Using Consumer Reports to Select a Car
- This post
- Should You Buy a New or Used Car?
- Is an Extended Car Warranty Worth It?
- Review of Hertz Rent2Buy
Photo by Bluewaikiki
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You say that price is the biggest benefit, but you are definitely “paying” for the cons. It is below street value because it has been dinged up, high mileage, dirty carpets, driven hard, etc. It is definitely a trade off…not good or bad, just a trade off. Do you want a deal? Or, do you want low mileage and clean carpets? You have to choose. I wouldn’t buy a rental car, but I can’t knock anyone who has though.
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Good point, though I still feel like the inconvenience of the couple of dings here and there is more than worth the savings. For many people, it would be a deal-kill (and honestly, I am amazed that my wife went for it), but I just didn’t mind at all. You’re absolutely right in that it’s a trade-off.
I’m not sure I agree with the point that you have to choose between low mileage and clean carpets -and a good deal. I think you can have it all. My last car was a rental – and it was in pristine condition – clean carpets, less than 30k miles, and it was about 1000 dollars less than comparable non-rental cars. I honestly don’t think most people drive rentals that much harder than normal – my rental that I bought lasted me another 100k miles til it was traded in. Plus, most rental companies take good care of their cars while they have them making sure they’re clean, regular oil changes/etc.
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Peter, in the end I think it’s all about perception. That’s why I was so fascinated with George Akerlof’s “Market for Lemons” study (see my Craigslist post). From Wikipedia:
“So the buyer’s best guess for a given car is that the car is of average quality; accordingly, he/she will be willing to pay for it only the price of a car of known average quality. This means that the owner of a good used car will be unable to get a high enough price to make selling that car worthwhile.”
Since most people perceive rental cars to be of inherently lower quality, the market price is lower. But as you point out, the quality issue is not always (or even rarely) true, so rentals end up being really good deals, most of the time. Sucks for the rental company, bonus for the little guy.
I don’t know why, but I find the whole study of economics and market forces really interesting. Funny, since I had a lot of trouble with economics in high school.
Would and did! I bought a 2005 Chevy Malibu from a dealer that was previously a rental. It had approximately 16,000 miles on it. It is now running at 65,000 miles and I have yet to have a major problem besides regular wear items such as brakes.
You can get great deals on rentals and I feel that if you treat it right after you get it, it will treat you right. Rental companies usually only keep them for a year and put a little over 10,000 miles on them. That gives you plenty of time to treat it right!
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Awesome! I guess the mileage depends widely on the company you buy from (and probably the location, too!). I would imagine Florida cars are driven much further than an urban location, like New York.
Rental cars definitely get more use than the average. But are they really driven “harder” than other cars? I’ve been renting cars routinely for nearly 12 years. I work with many people that also rent often. In all those years and in all those cars I only recall us driving them like we would drive any other car, with one exception.
If you find any White Castle remnants under the seats or in the vents… sorry!
That was my gut feeling, too. There’s that 1% that will just go nuts “because it’s not my car,” but the rest of us, I think, are fairly reasonable and well within the limits of what a car can handle.
The last car that I bought (not my current one) was a rental car in it’s previous life. After checking the carfax report and talking with the dealer I found out the car had been a rental in Hawaii of all places. It was a bit strange when I got in the car because you could still smell the ocean air – in Minnesota.
In any event the car was in pristine condition, and I drove it for over 100,000 miles before I traded it in for my current car.
Personally I think buying a rental car is often a good idea because a lot of the time they are just cheaper, and so often the generalizations about never buying a rental just aren’t true. Rental companies usually take pretty decent care of their cars, and you just need to take the same precautions when buying a rental as you would buying any other used car.
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Glad to hear another success story, and your point about exercising care is definitely true. The nice thing about our experience was the three-day “trial period,” where we could have the car inspected and really put our minds at ease. Definitely beats the 5-minute test-drive you get from most private sellers or dealers.
You know, I would have been one of those people who responded in horror (“People drive rental cars into the ground!”) but you make some good points. And I’ve always leaned toward solid used cars — no need to buy something pretty if it means making crazy payments for the next 10 years. You’ve given me something to think about when it’s time to buy a car again. (I live in Manhattan and have been car-less for six years!)
Glad to get you thinking!
It sounds like many others commenting here have had their share of good experiences, too.
In my life, I’ve bought two cars. Both were rental returns bought at a car dealership; they were a year old and less than 20K miles when I bought them. The dealer had them cleaned and pass their inspections.
I’ve ran into no major problems with either that could be attributed to being a rental car. With the second one, they couldn’t budge on price, so I negotiated to have them add cruise control to the car–other than that, it had all features I needed. The first car had just rolled over 100,000 miles (as in, the week before) when it was totaled in an accident. My current car has 118,000 miles on it. At this point, any problems that I have are likely attributed to age and mileage, not being a rental car.
So, I’m not sure if I’m just really lucky to buy two like this, or if in general rental cars are no greater risk than anything else.
(The second car, incidentally, was a rental car in Chicago–behind the sun visor on the driver’s side are directions to O’Hare and Midway airports. I live, and bought the car, in Minnesota. I’d prefer it to have come from Hawaii!)
I know!! That promise of the sea breeze sounds pretty enticing. Mine just smells like vanilla, for some reason (maybe I’ll find a Twinkie in the A/C system in a few years).
Based on what I’ve heard, and most of the comments here, I would say your story is fairly common. I have yet to find someone who’s had major problems with their rental, which is unusual since most cars will have problems at one time or another…
I guess my gut reaction would be that it’s a bad thing because I’m the type of guy who rents a car in Las Vegas and then runs it at 80 mph through the desert and mountains for seven hours. My only real concern is that the break-in period might not be observed as if it was a new car.
That said, you do have the benefit of knowing all routine maintenance was done on time, unlike the majority of other used buys. Maybe these two even each other out because most modern cars are slightly over-engineered on purpose.
How much of a price negotiation do you get with these companies?
With Hertz, there is no price negotiation, period. It’s a “take it or leave it, no-hassle” price, similar to the concept AMEX, Capital One, and many other companies have pioneered. That’s both good and bad, but the price is low enough to where you don’t really need to hassle them for more discounts. I was able to find a $250 coupon though, and while it’s not much in the grand scheme of things, it’s still $250.
Good points about break-in, although I think most modern car buyers have no idea how to break in a car anyway, so in my mind–what’s the difference? Heh…
We bought an ex-rental car and have had such a good experience that we are confident this will be the main way we buy cars for years to come.
At our level the cons aren’t that big a deal because any car in our price range isn’t the belle of the ball, and I am also a total slob in the car so any sort of stain is about to be topped by me anyway. We’ve put a great deal of miles on it since it’s purchase and have had zero problems.
The try-out period for the rental car was a lifesaver for us. I took the car to my mechanic and he told me it was a good buy, except for an axle problem that wasn’t a big deal now but he said would get worse with time. Took it back to the rental car place and they fixed it rather than losing the sale.
I think if you are really into cars or are on of those people who are a stickler for details about cars, the cons can add up. But your average a-car-is-a-tool a to b kind of person, you can’t really beat it.
“…any car in our price range isn’t the belle of the ball…” Great point, Kevin! It’s tough to find like-new cars that have any decent miles on them, so why bother trying? Some may call that settling, but I call it…realistic expectations.
It’s confession time around here. I personally wouldn’t buy a rental car because I know how they are driven at times. When I was 23-25 I worked at tech company and my job was to head out to most of the metro cities in the US and train Cellsite Techs how to install our product out at their cellsites. I would log about 300+ miles a day driving that car for all it’s worth the entire time. I have a particular hatred for the Chevy Corsica. I worked with 9 other guys who did the same thing and I indeed witnessed the same driving habits. I’m sure there are much more that drive responsibly but it only takes one of us.
On the positive side I know that Hertz was one of the companies that wouldn’t rent to those under 25 so maybe by then we’d all grown out of it. Okay maybe not me. I just keep thinking of the phrase we always use to say “Drive it like it’s stolen… or a rental.”
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I think some people just instinctively let loose with rentals. I guess my next question would be (and I alluded to it in the post)–what if the car can take all the abuse anyway? Then it doesn’t make a difference…
I would totally buy a rental car, if I were on the market for a vehicle again. I’ve rented vehicles for almost a decade now, and I’ve never been any harder on a rental than I am on a car that I owned. Hey, I’m in the thing, I’m interested in my own safety and the safety of others still!
Once in my life I bought a new car, probably because I could. I was young and foolish. It kills me now to think of a depreciating hunk of steel in the driveway. I don’t think that the car I drive is an accessory, I really don’t need flash. Frankly, I’d rather quietly be thinking “go ahead and laugh at the dents and chips on the bumper, it’s paid for and it’s reliable and I got a great deal”.
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Yeah, very true. We’ve grown so accustomed to cars as status symbols in our society that if I were to pull up to a meeting in a ’95 Toyota, I guarantee someone would make a comment. And that’s sad… (and nothing against ’95 Toyotas, by the way, lol).
I just want something reliable, like you.
I definitely don’t think you made a mistake. I could care less about how my car looks, or how fast it is, so I have a pretty unique opinion. My sole purpose for my car is functionality. Does it get me from A to B, and what is the MPG?
I’d consider buying a rental some day. The only down side I can see if that it was probably driven pretty hard. I’m not a picky driver:)
I have an eye for aesthetics, but I think it comes with being in the creative field. I would say I’m 85% functionality and 15% looks when it comes to selecting cars.
We bought a 2006 Jeep Commander from Carmax that was fleet car…It has been great. It had about 35K on it when we bought it in 2008, and just went over 50K. No major problems; I keep on the 3.5K oil changes, take it in for regular services, and it’s been a fantastic vehicle. We definitely would do it again.
Awesome! I think getting into a maintenance groove is definitely important as soon as you have ownership, since as many future problems as possible can be prevented!
A few years ago my parents bought a car from Enterprise. They were given this suggestion by someone who had done the same and been very pleased. They, too, have been quite satisfied. They got a very reasonable deal, and the car is still in great condition and has needed no major work, as far as I’m aware. As a result, I would definitely consider buying a retired rental car if a model I want is offered.
Awesome, Wiseguy! Thanks for sharing your story.
I bought a rental car that was a 1996 model in December 1996. Two months after purchasing, it was in the shop with an oil leak. After that visit and the leak was “fixed”, I had to take that car to the shop b/c it was leaking oil every six months or so. By the time I traded the car in 4 years later (after getting stranded on the side of the interstate in the middle of summer – twice in three months), I was putting a quart of oil in it every other day! When I bought the car I was a teenage girl who knew nothing about car care, and when I sold it I knew more about how to take care of a car than I ever wanted to know! Not necessarily a bad thing to know. Other than that *small* annoyance, the car was in great shape on the inside, carpet, seats and interior was immaculate. I would never do it again b/c of that bad experience.
Yikes! A chronic problem like that would drive me nuts!
I must admit that I am one of those who had no opinion…I have driven rental cars but never seriously considered buying one. However, after reading this post and the comments (pro and con), I would definitely consider it next time I shop. You can get dirty carpets and dings buying from any individual, and how would you ever know for sure how THEY drove it?
We will be looking to buy another car in about a year, so I will be checking into buying a rental. Thanks for the helpful post!
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Awesome, Joe! I’ll be happy to add my own experiences into the pool of comments when you’re ready to make the choice next year!
I think buying a retired rental car is another good option when searching for a “new” used card purchase.
I agree with Joe; I don’t think rental cars are driven any harder than your average used car. I rent cars often for work and drive them like the grandma I am.
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Bought a rental from Hertz. It was still under warranty. Got the top replaced (it was a soft top). Paid exactly half of what a new one would have cost.
That was three years ago—never looked back!
“Paid exactly half of what a new one would have cost.” That was the sweetest part for me, too, especially since the car was only 2 years old.
Thanks for sharing!
Hello
I was contemplating of buying an used Hertz Rental Car. Since, I am a novice buyer, I am a bit skeptical. (I am based in Weslaco, TX about 20 miles from the dealer.) What is your take on the following vehicle:
http://www.hertzrent2buy.com/content/CarDetails.aspx?carid=142565&Makes=&Models=&Years=&Colors=&City=&State=&DistanceMiles=200&PostalCode=78596&DueDateFrom=&DueDateTo=&ItemNo=&UnitId=&LocationId=&BodyTypeId=&MinMileage=&MaxMileage=
Sooraz,
Unfortunately, I have no frame of reference for commenting on specific cars from Hertz. The model is your personal choice, and the Hertz information page won’t give you much more beyond the mileage. You need to rent the car and see for yourself/have your mechanic check it out. What I did find when I was looking are prices significantly below Blue Book value, across the board. You might want to compare that to the asking price.
I can tell you that I have been fairly happy with Hertz Rent2Buy thus far, but the process is not over. Once I have everything complete, I’ll publish a complete review.
You are bang on target with respect to the KBB value. It is about 2 to 2.5 grands less than the estimated market value. The make is 2009 mazda with 30k miles clocked in. It is still under company warranty (36k miles or 3 years). So, I would seek your input on whether to go for a vehicle model X with about 6k miles of warranty left? Car model and make is perfect for me. Also, can you give me any leads on the financing schemes of these used rental cars.
All things considered, I think you can find lower mileage 2009′s from Hertz (20,000-25,000), but that’s just based on my area. Our 2008 purchase had 32,000 miles as a point of comparison. If you can’t or don’t want to, then make sure the price reflects the relatively high mileage as compared with other cars of the same model.
I think you’re right on target with wanting to get something with a leftover warranty. Mazda also has 5yrs/60,000 powertrain, if I remember correctly, so you’re covered there for major stuff for a while. Hertz also gives you a 2,000 mile limited warranty.
I did my financing right through Hertz, and they supposedly “shopped around” for me and landed me with Chase Bank. The rate I got was superb, as good as I could have gotten even from my local credit union, so I had no qualms about that process.
Another thing to possibly note is that, especially when a car is new, the engine and transmission can take a lot more abuse if it did, in fact, get driven hard. Actually, most of my friends who are very knowledgeable about cars say that when breaking in a new vehicle you are better off driving it relatively hard. Their explanation was that certain internal components, such as piston rings, need to seat themselves properly and adhere to the other materials. When a car is brand-spankin’ new, there is always microscopic flaws in the metal between components, and the more oil pressure and strain you place on those parts, the better they form to each other. It’s kind of like a human being who never exercises: you go 3 years without moving and try to run 5 miles, you’ll probably faint, but a person who’s prepped and lubricated (so-to-speak) will be able to handle the run. Bad metaphor I know, but it’s something to think about. Additionally, when cars are “tested” for safety and performance standards or car reviews by, say, edmunds.com, they routinely drive the hell out of them MUCH harder than a renter would.. and I’m sure they don’t just break apart.
“they routinely drive the hell out of them MUCH harder than a renter would.. and I’m sure they don’t just break apart.”
Great point, and that’s pretty much how I sold the whole concept to my wife.
I must admit that I am one of those who had no opinion…I have driven rental cars but never seriously considered buying one. However, after reading this post and the comments (pro and con), I would definitely consider it next time I shop. You can get dirty carpets and dings buying from any individual, and how would you ever know for sure how THEY drove it?
Exactly.
At least with rental cars, you have the law of averages on your side (if one out of 100 people drove it poorly, at least 99 didn’t).
In the process of buuying a rental car..a very nice but noisy 2008 350z. yes I expected the car not to be perfect, but I now apreciate Carmax and other dealers of used cars that are meticulous in preparing used cars for sale. I am just lucky that I can give it back per the Repurchase Agreement-7 days or a thousand miles,( but there are probabley so many loop holes in that i’ll have to endup keeping it). I did the test drive it was fine no noise at all..radio was off and the agent wasn’t talking…I get the keys take I95 home, park the car , take a nap, get up , go for a ride and as I am pulling off Ihear a rattle back near the schocks. Not only that when stopping to start again to see if I was hearing things the brakes begin to squeal. Shucks!
I bought two rental cars from Enterprise. Where else can you buy a late model car that is almost like new with all these features for under 15 grand? A mid sized sedan? I bought the first one, a Buick Skylark, I’m still driving it around going on 11 years. It’s a 1998 car. That one cost me around ten grand. The other one I bought recently is a Pontiac G6 they had on sale for the month of May, got it for 12,987. Fully loaded. onstar, Satelite radio, 5 star crash rating, automatic and slap stick, warranteed up to 5 years or 100,000 whatever comes first. How can you beat that. It looks clean, smells clean, and lots of bang for your buck. It had 38,000 miles but they tell you that most of their cars sell between 35-45 thousand miles. Still way below the Kelly’s blue book value. I only rack up about ten thousand miles per year. My buick now has 134,000 miles, still kikin. Brand new, this Pontiac G6 goes in the mid 20′s range. So there is a slight trade off, but its still under warranty.
Awesome that you got your car fully loaded. I didn’t see any of these models available from Hertz (at least not the specific model we were looking at), but I’m curious if companies like Enterprise offer higher-end versions of their models.
In the process of buying a 1 year old Maxima with 16,000 miles, negotiated down to $9,000 off sticker price (below Kelly Blue Book Trade In value). I’m reassured by reading others’ experiences.
Care to share what company you’re negotiating with? Unfortunately, with Hertz there was no negotiation possible.
Consumer Reports does not recommend buying rental cars – that is enough for me.
Also, a friend of ours did buy a rental cars (admittedly a decade ago) and he had very bad luck with it – and found that it had much more road noise than expected. Someone in the industry told him that car rental companies bought stripped down models, sold specifically from mfg as rentals, and had less insulation/soundproofing, etc. as cars sold to the public. that may or may not be true.
the biggest deal breaker for me is the smell of cigarette smoke which always seems to be present in ex-rental cars.
I typically agree 100% with CR, but in this case I would have to disagree. I have been more than happy with my experience, and it sounds like many others have too. Yes, once in a while, you’ll get a lemon, and unfortunately I think those experiences taint the rental car image in everyone’s mind.
Interesting observation about the “stripped down” models…I, too, am curious as to whether this is true.
Ditto on the cigarette smoke, by the way, but after a few months, we’ve finally gotten rid of the smell.