Frugal Shopper: Does It Make Sense To Buy A Used Rental Car?

May 21, 2010
If you're thinking about a late-model used car instead of a new one, the used cars on offer by major rental companies can be tempting. From a price standpoint, you're getting a nearly new vehicle that's been regularly checked over and maintained, for a bit less than a comparable used car would cost at the dealership.

But for a number of reasons, used rental cars aren't the great deals they used to be.

In the past, when few if any certified pre-owned (CPO) programs existed, it was your chance to get a late-model used car that had been properly maintained and, generally, taken good care of. Automakers were building as many vehicles as rental fleets could handle, and then some, and dumping them at a massive discount to renters. But recently, with automakers realizing that strategy isn't good business, and rental companies cutting costs, they're keeping vehicles in the fleet much longer and renting them out more frequently. Today it's not at all uncommon to see a rental car with 30,000 or even 40,000 miles, whereas a decade ago the vast majority of rentals had less than 15,000 miles.

"At this point, unless it's a really good deal, I wouldn't recommend it," says Charlie Vogelheim, executive editor of IntelliChoice. Vogelheim says that, anecdotally, when customers are in a vehicle that's not in as good condition, they're not going to treat it as well. And with many of today's rentals looking quite weary, it's a slippery slope.

Beware of title flags

Also of concern is the branded title flag that rental cars get in some states, which can knock thousands of dollars off the value if you plan to resell the vehicle within a year or two or make the vehicle tougher to sell over the long term. If you're going to keep a vehicle for a long time, rental cars are still a really good deal, according to Vogelheim, but you lose a lot of value right away.

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