Buying a Used Rental Car

hertz
Buying a car is a stressful event. Buying a used car is even more stressful. You don’t want to buy a lemon and you don’t want to overpay. I purchased my previous car years ago through Enterprise Car Sales and had a good experience with it. You can read about my experience here. In a prior post, I mentioned that I was looking at purchasing a bigger vehicle and eventually bought a minivan. After doing some research, it seemed like the Honda Odyssey was a good choice. One big reason was the fuel economy for such a big car. Unfortunately, Enterprise Car Sales did not carry that car so I considered going to a regular used car lot.

I did not have a good experience with the used car lot. I found a car with a very good price…maybe too good to be true. I had a mechanic check it out and he basically told me to RUN FAR FAR AWAY. He said that even if the price was dropped $2000, he wouldn’t recommend buying it. I didn’t want to deal with shady used car dealers so I considered other types of minivans and looked back at Enterprise Car Sales, but their prices didn’t seem as good as when I purchased from them years ago. I also looked into Hertz Car Sales, which like Enterprise sells their rental car inventory, CarMax, a no-haggle used car retailer as well as a new tech start-up called Carvana, which sells used cars online (they deliver the car to you).

After looking at those option, I found that Hertz had the best prices for the vehicle I was interested in. Hertz advertises that their prices are $1000 or more below the Kelley Blue Book (KBB) value. It is a no haggle price so the price is the price, however, I found the price to be very fair based on my research and over $1500 below KBB value. Also, if you are a Hertz Gold Member, you get an extra $300 off. If you’re not a member, you can just sign up online. They didn’t seem that strict about it. I just showed them my member ID card which I printed from my e-mail.

Hertz offers two options when purchasing their cars. One is Rent2buy and the other is Herz Certified. For the Rent-to-buy program, the cars are still in their rental inventory so you have to reserve the vehicle. You have three days to test drive the car and decide whether to buy it or not. If you end up buying it, you will not be charged for the rental. I went with the Certified program. According to their website, certified cars are “carefully selected from their rental fleet” and then undergo “extensive” inspections because it is put out for sale.

My car buying process went smoothly and without a salesperson trying to pressure me to buy or upsell me. There also wasn’t any hidden fees like “destination fee” or “documentation fee.” The person I worked with showed me the car and took me on a test drive. There was no pressure and the transaction was stress-free. I recommended Hertz Car Sales to a friend of mine and he also bought a car, but he went through the Rent2buy program. The cars in that program might have less mileage as they haven’t been retired from the rental fleet yet. My friend told me that during the three-day test drive, the car ran smoothly and when he took it to his mechanic, he was told the car was “like new.” Hertz also provides a 12,000 mile or 12 month power train warranty. You also get 12-months roadside assistance.

When I’ve mentioned that I purchased my car from Hertz, some have asked me whether I’m worried that it’s was previously a rental car and might have been abused. I guess this is a possibility, but I think the majority of people renting from Hertz are probably people on business. And for others renting the cars for leisure, do you really abuse it or do you just drive like you normally do? Another thing is that I bought a Minivan! Most likely the person renting it is a parent and I doubt they’re flooring it or doing donuts in the parking lot. Also, I think rental car companies have an incentive to keep their cars in good condition so maintenance is not really an issue.

One other criticism was that I didn’t get a good deal because I could not negotiate the price. However, I can’t say that was the case. As I mentioned in my previous experience with Enterprise Car Sales, I did my research and in that instance also went and negotiated at other dealerships. In the end, no-haggle is not a big deal because the price is fair. It’s possible that if you’re an expert negotiator and the dealership you go at a time is desperate to move its inventory you might get a better deal, but I’m happy with my deal. The only downsides for some maybe is that they may not carry the make and model of the vehicle you want, and their cars also probably won’t have higher end features. But I don’t need heated leather seats or an entertainment package so that’s okay.

Would you purchase a vehicle from a rental company or do you prefer to negotiate at the car dealerships?

24 thoughts on “Buying a Used Rental Car

  1. Biglaw Investor

    Living in NYC, I haven’t owned a car for over 7 years, so I don’t have much experience here. In fact, it had never occurred to me that you could buy a used rental car so thanks for planing that seed. If/When I ever buy a car (assuming they’re not 100% automated at that point), I would definitely check this out. Sounds like you got a good deal.
    Biglaw Investor recently posted…Guest Post: Your Lawyer Survival KitMy Profile

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    1. livingrichcheaply@gmail.com Post author

      Just curious, do you ever use Zipcar? If I didn’t need my car for commuting purposes, I think I would get a membership. Public transit and Uber work too but sometimes it’s nice to have access to a car. Very interested to see the future of cars…100% automated cars seem so futuristic but they’re here.

      Reply
  2. Brian @ Debt Discipline

    When buying used I’d going with a private owner or rental company are great ideas. We always have our mechanic give a possible buy the once over. We did that with a Honda we were purchasing for our teenagers and he found some minor issues. We were able to negation the repairs off the total purchase price of the car.

    We owned a Honda Odyssey for years. They are such great family vehicles. Good luck with the new ride!
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    1. livingrichcheaply@gmail.com Post author

      Definitely worth it to have it checked out and great that you were able to negotiate off the price with what you learned.

      Reply
  3. Amanda @ centsiblyrich

    I would definitely consider buying a car from a rental car company and will definitely keep Hertz in mind the next time we’re in the market for a used car. It sounds like you and your friend got a good car at a good price. I don’t like negotiating prices and find it hard to trust dealers. I bought my last used car at a small town dealership – it was the best experience I’ve ever had buying a car. No pressure, great customer service and a fair price. They rely on repeat customers to stay in business since they’re in a small town and I think this makes a world of difference.
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    1. livingrichcheaply@gmail.com Post author

      Yea, I’m not good with negotiating prices and honestly I think the price I got was very fair. Even with negotiation, I’m not sure if I could have gotten that much of a better deal somewhere else. It’s great that you know of a place that you trust.

      Reply
  4. Brian - Rental Mindset

    I purchased a 2013 Chevy Cruise this year that was a rental for 2 years, then someone else owned it for 1 year. It does in fact have the heated leather seats you mentioned! It definitely has a lot more miles since it was a rental, but that is what brings the cost down.

    Reply
    1. livingrichcheaply@gmail.com Post author

      Interesting…I assumed rentals wouldn’t have that option! Yea, the higher mileage isn’t too big of a deal since cars can run for a long time nowadays. The higher mileage definitely brings the costs down.

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  5. Done by Forty

    For whatever reason, I like buying from individuals. I feel like a single owner is more on even footing with me in a negotiation, and, hey, I know where the guy lives if he tries to pull one over on me. :)

    But I’d definitely consider buying from rental agency (provided that they had any cars that were manuals). Informative stuff here, as always, Andrew.
    Done by Forty recently posted…Should I Stay or Should I Go?My Profile

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    1. livingrichcheaply@gmail.com Post author

      Haha, yea I think you like negotiating! I doubt rental agencies have many cars that are manuals.

      Reply
  6. Mustard Seed Money

    I have to admit that I have never bought a car at a dealership used or new. I have always bought cars through Craigslist or back in the day through the newspaper classifieds. I would have a list of things that I wanted when looking for a specific car.
    1. One owner
    2. Never been smoked in
    3. Never been in an accident
    4. All maintenance records
    And then I would ask them why they were selling the car? If everything added up and it was within the KBB guidelines. I would normally test drive it and buy it :)
    Mustard Seed Money recently posted…Roth 401K- Does Switching Make Sense?My Profile

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    1. livingrichcheaply@gmail.com Post author

      Yea, I think you can probably get a great deal on Craigslist but I’m a little leery going that route. Do you bring a mechanic with you or are you knowledgeable about cars? I am not and would be worried that I was buying a lemon.

      Reply
  7. Laurie @thefrugalfarmer

    I bought my first “family” car as a rental return. It was a good deal for me. I’m not a big fan of used car lots either, although the one we used last time (a year and a half ago) was excellent, and we would go there again. Valuable info here, Andrew. Thanks for sharing!

    Reply
    1. livingrichcheaply@gmail.com Post author

      That’s great when you find a place that you trust! I don’t know why some places are so shady…don’t they want repeat customers and for customers to recommend them?

      Reply
  8. EL @ moneywatch101

    IT makes sense for it to be a bit lower than KBB as some rentals will have a higher than normal mileage given the age of the car. A lot of used dealers in NYC buy from enterprise and hertz to resell on their lot. Well I looked into them the last time I wanted a car, and couldn’t find the car I wanted. Maybe in the future they will expand their choices. Good luck with the car.
    EL @ moneywatch101 recently posted…Why I Want Financial FreedomMy Profile

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    1. livingrichcheaply@gmail.com Post author

      Yea, I was looking at the Carfax of cars at used car dealers, many were rentals anyway.

      Reply
  9. Chris

    I would buy from a rental company but not just any one. Like you mentioned, the renters that could have driven the car in the past would be a big deal to me.

    Reply
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