Buying a Car from Hertz Rent2Buy

This is the seventh and final post in my recent series about our journey to used car ownership. If you missed the other parts of this series, head down to the end of this post for the complete list. I’ve had a fantastic time sharing our story with you and hope you’ve found it useful!

Last month, I introduced the subject of buying rental cars in general, and I got a better-than-expected response from all of you. The vast majority of the 40+ comments seem to echo the encouragement I noted that people who’ve owned rental cars before have about the process.

I noted some of the major pros and cons of rental car buying. Let’s quickly recap:

• Pros: Better price, recent model years, the ability to “try before you buy,” hassle-free buying, a warranty, and buying the “cream of the crop.”
• Cons: Rental cars may have been driven hard, car selection is limited, cars are basic trim, high mileage, poor aesthetics, and a lack of a long-term warranty.

For more details, check out the original post. Today, I’d like to focus specifically on the Hertz Rent2Buy program and share my comprehensive review with you. I’ll discuss in detail the whole car-buying process and things we specifically liked and disliked with Hertz.

For those of you considering Hertz Rent2Buy and on the fence based on what you’ve read online, this might help you to make a decision. I definitely wish there was a comprehensive review like this one when I was going through the process!

Background

As most of you know, we experimented with one car for a little while, and finally decided to sell our existing car on Craigslist and look for something new to buy. We milled over the new vs. used decision for a few days, and discovered a new alternative through the process–buying a rental car.

I actually found out about Hertz Rent2Buy through eBay, because the company lists a lot of their cars that way. I was curious about the program, so I decided to check out the official page and see what they had to offer.

Luckily, Hertz was offering the exact model we were looking for!

The Process

The Hertz Rent2Buy process is a fairly straightforward and no-hassle way to buy a car. Here is more or less how things went down:

1. After selecting the car we wanted, the next step was to check if Hertz has those models available. They were available locally, and there were a handful (about 50) specific cars to choose from.
2. You pick the specific car you want based on the model year, mileage, color, and other minor details. The price is non-negotiable; however, there are coupon codes floating around the web–we got $250 off the price.
3. Once we had the exact car we wanted in sight, “reserving” the vehicle was a matter of a few clicks, including picking a date/time for pickup at the rental office.
4. As instructed, we waited for the confirmation call from Hertz, which came the day before our scheduled rental. The call confirmed the car was ready for pick-up, gave us up-to-date mileage, and discussed minor damage present on the car (a couple of small scratches).
5. Finally, rental day came. We drove to our local airport, where Hertz is located here, and headed to the rental counter. The gentleman who helped us had never done a Rent2Buy transaction before, but he quickly got help. We were able to view the car before making a final decision, and then filled out the rental paperwork within 10 minutes.
6. Then came the fun part–a three-day test drive, where we could put the car through its paces without a salesman in the back, or pressure to hurry.
7. Once we decided to make the purchase, it was once again a simple matter of going online and clicking through a few simple screens. We were also able to submit a financing application on the spot.
8. The process continued and we received a call from Hertz the following day to go over our purchase and financing. All of our paperwork was FedEx-ed to us overnight for our review.
9. Once the paperwork arrived (and there was a lot of it), it was time-consuming, but simple to get through everything. All the papers were correct, and were well-noted with post-its on what needed to be signed, filled out, etc. Most importantly, there was no pressure to “hurry up and read” like at the dealership. I took my time going through the papers.
10. The down payment had to then be wired to Hertz from our bank (there were other options available, but that was the simplest). Once this payment is in, the rental period is stopped and all of our rental fees were refunded.
11. We then had to have some of the papers notarized and shipped everything back in a pre-paid FedEx envelope.
12. A few days later, we received a call from the financing company to finalize that end of the deal.
13. Things were quiet after this as the title company and financing company both worked on their ends to finalize everything. About two weeks later, we received the final car registration and our first bill.
14. As one last final hoo-rah, we swapped the rental plates with our own, and shipped back the originals to Hertz. The following week, we received a refund check for unused portions of our registration fee (we transferred our plates, which costs about $10 instead of $300).
15. We are now the proud owners of a fairly new 2008 Mazda5. Good deal.

Thoughts on the Test Drive

I have a couple of tips for the test drive, specifically, that I think will make the whole experience different than any other car-buying process you’ve ever gone through:

• Have the car inspected by a trusted mechanic or a friend in the business. Don’t pay excessively for an inspection, but a nominal fee is worth it for peace of mind on your purchase.
• Listen to the car well instead of blasting the radio all day. Is the engine running well? Does the A/C work quietly?
• Use the car in as many ways as possible (drive to work, go to the beach, shop for groceries, etc.), and put it through its paces. Does it function well?
• Try all the systems on the car, including less-frequently used items, like the windshield wipers and high-beams.

You have three days to test-drive your new car. Don’t let this awesome opportunity pass you by.

What Did We Think?

Here are specific observations about the process and the deal:

Plus Side

• The car itself was a little banged up in terms of aesthetics, but it wasn’t anything detailing or shampoo couldn’t fix. It was in excellent mechanical condition otherwise, and our mechanic signed off on it with flying colors.
• The price was easily $2,000-$3,000 less than comparable dealer prices and even Blue Book value. That’s a 15-20% savings on the purchase price in our case. And it also means that even if we have to put some money into it (care, detailing, etc.), we should come out ahead.
• The paperwork and the whole process went along very smoothly (with the exceptions noted below). In other words, it was really easy to buy this car.

Minus Side

• Since the mileage changes so rapidly on the rentals, Hertz “standardizes” the sale mileage as the last known number prior to the rental. Convenient for them, since it’s about 500 miles less than when we actually got the car, and their 2,000-mile warranty kicks in at their mileage. Wasn’t worth arguing over, but that’s pretty crappy.
• It was tough to reach my Rent2Buy service rep by phone or email. At times, I felt like I was being ignored. At the same time, I knew that if I had an urgent issue, there were other agents I could contact at the same phone number.
• We were called three times by an automated system claiming we were “overdue” on our rental return. Trying to reach the extensions department was a 30-minute ordeal, but it ended up that the Rent2Buy people, an entirely separate department, had to close out our rental. No big deal, but it was annoying.
• After the purchase and initial paperwork, things kind of went quiet. We did get an email saying our stuff went to processing for a title, but I wish I was kept in the loop a little better overall. We weren’t entirely sure when to transfer license plates, etc.

Even with some of the hassles, I was very impressed with the whole experience, and I would definitely recommend it to anyone looking to buy a used car. We love our new ride, and it’s definitely an excellent value for what we decided to spend on it.

Rent2Buy is a relatively new program, and I’m sure they’re still working out the kinks. As they get going, I have a feeling this will become one of the most popular new ways to buy used cars. Quote me on it.

Update 8/2/2010: Hertz is running a promotion for past Rent2Buy customers for the next few months. If you do end up buying from Hertz, I would sure appreciate if you mentioned I referred you. Just use promo code “AUTO2010″ and my name (Wojciech Kulicki), and I’ll get a sweet gift card. Many thanks for helping support the blog financially!

Photo by Ken_Mayer

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:

1. Our One-Car Experiment and Car Decision
2. How to Sell Your Car on Craigslist
3. Using Consumer Reports to Select a Car
4. Would You Buy a Rental Car?
5. Should You Buy a New or Used Car?
6. Is An Extended Car Warranty Worth It?
7. This post!
   

To become a regular reader, please consider subscribing to my blog for free via your RSS reader.