Is it a good idea to buy a rental car?

If you’re considering buying a used car, you might want to consider your rental car options first. Rental car companies can sell newer models at more competitive prices than you’d get through a used car dealership or private seller. But with that lower price tag comes higher mileage — and a lower resale value — should you choose to sell it down the road.

Why should I consider buying a rental car?

With well-maintained options at competitive price points, choosing to buy a rental car comes with 4 key benefits:

1. Regular routine maintenance

Most rental car companies maintain their fleets regularly. This means you can trust the car has received servicing for any damages, as well as for regular mileage upkeep. Reputable companies will follow manufacturer-suggested maintenance and keep qualified mechanics on hand to ensure that vehicles continue to run smoothly.

Fleet cars also receive regular cleaning between rentals and are typically inspected thoroughly before they’re put on the market. While no rental company can control how a renter drives its cars, many take steps to ensure the car is in the best possible condition when you buy it.

2. Competitive prices

Two factors affect the price of rental cars: the general stigma against them and the frequent influx of similar models into the market.

Because of this, rental companies tend to sell these cars at no-haggle prices set below market value. You typically can’t negotiate the price down, but you’ll often get a better deal than if you’d bought a similar model from a dealership or private seller.

Look for average prices on sites like CARFAX Canada or the Canadian Black Book to confirm you’re getting a competitive offer.

3. Simplified shopping experience

A car rental company’s inventory is generally limited to base models from the previous year. So, instead of spending a lot of time comparing trivial factors between many cars, you can focus on major differences in the mileage and vehicle history report.

If you manage to find a car with a competitive price tag, low mileage and minimal flaws, your shopping experience is that much simpler.

4. Newer models

Rental car companies attract customers by offering models that are only 12-18 months old. This is ideal for buying a used rental car, especially if you opt for a manufacturer that allows you to transfer the warranty to a second owner. You’ll enjoy relatively new technology and safety features at a fraction of the price of a similar model from a dealership or private seller.

What to consider when buying a used car

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What to watch out for when buying a car from a rental company

Though you can often snag a competitive price when buying a rental car, consider four potential drawbacks:

1. Increased wear and tear

Rental cars aren’t always treated kindly by renters, which can result in a lot of damage over a short time. Issues can range from minor issues like extra stains and scratches to bigger problems caused by renters pushing the car to its limits. While reputable rental car companies perform regular maintenance and cleaning, a year or two of constantly changing hands can take its toll on any vehicle.

2. Higher mileage

Most rental cars come with higher mileage than a similarly aged used car from a private seller or dealership. Larger rental car companies typically sell vehicles in their fleet after they’ve reached 40,000 to 65,000 km, which may be racked up in just 12-18 months. But because rental cars are often well maintained, you may decide that high mileage isn’t such a big deal.

3. Limited inventory

The downside to a simplified shopping experience is that your selection is limited to the makes and models on hand. And because rental companies don’t often opt for upgrades and add-ons, most cars are base models.

However, rental companies experience frequent turnover, so you might find what you’re looking for by continually checking back on new options that are available.

4. Lower resale value

Rental cars have lower resale values than other used cars — mainly due to the stigma that landed you a good deal in the first place.

A large number of rental cars on the market can also affect your car’s resale value. If you plan to keep your rental car for the long term, this won’t matter. But if you’re thinking of trading in your car in a few years, you won’t get as much money as you would have if you’d opted for a traditional used car.

4 tips for buying a used rental car

Follow trusted pointers to shopping for a former rental without getting stuck with a lemon:

• Take a test drive. Beyond inspecting the car for obvious signs of body and interior damage, ask to take it for a test drive. Make note of how it drives, the car’s performance and any features that don’t appear to work properly.
• Request a history report. Any used car you buy should come with a vehicle history report, which details accidents the car has been in and repairs made. If you’re on the fence between two cars, you might want to opt for the one with a cleaner report.
• Look up recalls. Rental car companies are required to fix recalls that apply to cars in their fleets. The vehicle history report should list recalls for your vehicle, and you can check Transport Canada’s Road Safety Database with the car’s VIN to confirm.
• Schedule an inspection. The rental car company should allow you to get the car inspected by a third-party mechanic before you buy. That way, you can make sure there aren’t major mechanical issues that can affect you down the road.

Bottom line

If you’re looking to save money on a used car, a former rental car may offer a better deal than a traditional used car from a dealership. But consider the higher mileage and extra wear and tear that typically comes with rental cars before making a decision.

Ready to make a purchase? Compare your car loan options before hitting the rental car lot.

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Frequently asked questions

• Will I be able to negotiate the rental car's price?

  Not likely. Most rental car companies are unwilling to entertain haggling, because their cars are often priced below market value already. While you may get a decent deal on the car, you won’t be able to negotiate the price any further.

• Can I test-drive a rental car before I buy?

  Yes. The big three rental car companies — Enterprise, Hertz and Avis — all allow you to drive a car for multiple days before purchasing it, giving you a chance to try out features and get a professional inspection before you make a final decision.

• Why do rental companies sell their cars?

  Rental car companies constantly update their inventory to offer their rental customers the latest models and features. Frequent turnover means that cars are replaced with their newest versions. Because of this cycle, you may find relatively new cars at low prices — provided you’re OK with the high mileage accrued during their time as rental cars.