Frugal Shopper: Does It Make Sense To Buy A Used Rental Car? Page 3

May 21, 2010
Chrysler Warranty Logo

Chrysler Warranty Logo

Enterprise also offers more extensive warranty coverage than the other major renters. Through them you'll get 12-month/12,000-mile powertrain coverage, a seven-day/1,000-mile, no-questions-asked buyback program, through which you'll get all but a $200 fee back.

Weak warranty coverage

Warranty is where many used rental purchase programs are weak, however. Hertz offers in most cases a 60-day or 2,000-mile limited warranty that covers core components but even then has a $50 deductible per visit. That's not much more that what's required by law for an "as-is" dealer sale in some states, but all the companies also offer add-on protection plans that altogether, typically for a few hundred dollars, will generally add the equivalent of a factory warranty to the purchase—but through a third-party company. Certified pre-owned (CPO) programs, however, offer years of additional coverage—usually an extension of the factory warranty—on late-model used cars.

Hertz offers a two-hour test drive, but if you go over that limit (to take the vehicle your own mechanic for a check, for instance) you're charged either $49 or $99 per day. Under a new Rent2Buy program, Hertz is now allowing potential buyers to rent the vehicle at "a special daily rate" for up to three days; if you decide to purchase the vehicle, the rental charges will be waived.

Another selling point is that the rental-car companies might be able to put you in a nicer vehicle than other used-car dealerships. Thanks to partnerships with financial institutions, they're often able to work around blemishes in your credit history, so it might be easier to find reasonable financing through them than if you were looking to find financing for a private sale. Avis, for instance, says, "If you have experienced credit problems, we are usually able to overcome many of the obstacles associated with past credit problems without an increase in the current rates." Leases are also typically possible and arranged on an individual basis.

With all the excellent automaker-run CPO programs today—offering meticulously inspected vehicles, factory financing and, in many cases, the warranty of a new car, for not much more money—rental-car companies are no longer one of the best sources of late-model vehicles.

Although buying a former rental once made a lot of sense (and still can for some), for most of us it's an idea whose time has come and gone.

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