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Is it a good idea to buy a rental car?

Consider whether that low sticker price outweighs extra mileage and wear.

If you’re considering buying a used car, you might want to consider your rental car options first. You can often find 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

2 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 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

What to watch out for when buying a rental car

Though you can often snag a competitive price when buying a rental car, consider 4 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 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 2 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.

Compare car loan options

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
CarsFast Car Loans
$500
4.90% to 29.90%
12-96 months
300
Min. income of $1,800 /month, 3+ months employed
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Loans Canada Car Loans
$500
0% to 29.99%
3-96 months
300
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
Car Loans Canada
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Coast Capital Car Loan
$10,000
Varies
18-84 months
650
Able to service debt payment of $300/month
Finance or lease both new and used vehicles with competitive rates and flexible terms from one of Canada's largest credit unions. No credit union membership required for this product.
Canadian Auto News
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
LoanConnect Car Loans
$500
9.90% to 46.96%
3-120 months
550
No min. income requirement
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
Canada Auto Finance
$500
4.90%-29.95%
3-96 months
300
Min. income of $1,500 /month, 3+ months employed
Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
$500
1.90% to 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
Fairstone Secured Personal Loan
$5,000
19.99% to 23.99%
36-120 months
560
Established credit history and own your home
Fairstone offers secured personal loans up to $50,000.
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Compare up to 4 providers

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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