Is Buying a Rental Car a Good Idea?

Rental companies will typically sell vehicles when they need to make space for new cars. Broadly speaking, operators will utilize a vehicle in their fleet for anywhere from one to two years. By selling off their inventory, rental businesses are able to offer customers brand-new cars.

Another reason a rental firm may choose to sell some of its fleet is to lower the burden of maintaining those vehicles. Again, because rental cars are driven regularly by a significant number of drivers, they can require more maintenance than other vehicles on the road. And, as manufacturer warranties expire on those cars, rental companies have a greater incentive to sell those vehicles.

Car sales of their rental fleet can also help companies free up cash to buy new vehicles, which can be particularly useful if the operator has noticed a trend toward certain car types. For example, a rental business may see rising demand for SUVs, in which case it may opt to sell some of its sedans so that it can better meet its customer’s needs.

Thanks to the internet, it’s relatively easy to find an ex-rental vehicle for purchase. Many rental companies have dedicated divisions that handle such sales, and some also have brick-and-mortar dealerships, allowing you to see cars in person.

There are some clear benefits of going direct to a rental agency for such a purchase, not least of which is that you will be able to ask questions about a car’s mileage, maintenance history, and even any unexpired manufacturer warranties. However, it’s important to note that, just as with renting a vehicle, you may find the selection is limited and that the car you really want is located in another part of the country.

For those interested in a rental car alternative, a FINN car subscription may be the best option. Not only does your plan include maintenance, but you will also have comprehensive insurance bundled in with your monthly costs. And with a wide range of cars, chances are you’ll find the perfect vehicle for your adventures.

There can be many benefits to purchasing a former rental vehicle, but there are also a few cons. Here are some things to consider when shopping for an ex-rental vehicle. 

Pro: Lower cost than other used cars

To find the value of the car you are looking to purchase, check online tools such as Kelley Blue Book or Edmunds. And thanks to rental companies having to make space in their fleets, they often price their used vehicles lower than regular dealerships. 

For example, a preowned 2022 Jeep Grand Cherokee SUV might sell for $40,000 from a regular dealership, while buying from car rental companies sees that price drop as low as $34,000. Alternatively, a FINN subscriber can secure a Jeep Grand Cherokee for $899 a month - which includes maintenance, insurance, and mileage. 

Pro: Warranty coverage

Depending on the age of the vehicle, you could benefit from current manufacturer warranties or an extended warranty. Additionally, some rental companies will also offer their own warranties on the cars they sell, which can include mechanical coverage for a period of 12 months or a fixed number of miles.

Pro: Access to a Carfax report

Many rental operators will include a free vehicle history report from Carfax when selling a vehicle. As a buyer, this means you will have access to the vehicle’s history, including details of any accidents, maintenance records, and how frequently it was serviced. 

Con: Higher mileage

A car purchase with high mileage increases the likelihood that it will require more maintenance and calling a trusted mechanic more often. It also means that, once you’re ready to sell the vehicle or trade it in, it will likely have a lower resale value.

Con: Wear and tear

As with the mileage situation, an ex-rental car is likely to have experienced more wear and tear. That’s not to say it will have major issues as soon as you drive it away, but it’s possible you could be spending more money to maintain the vehicle over the long term than if you had opted to buy a different car.

Con: Financing may be harder to secure

Some lenders are not willing to offer financing on former rental vehicles, primarily because of the mileage and maintenance issues. It is always advisable to check with a potential financier before you commit to an ex-rental.

When buying from a dealership, you will likely come across the phrase certified pre-owned (CPO). These are used cars that have been inspected and reconditioned to the dealership’s standards, and will often come with a manufacturer-backed factory warranty. 

When compared with former rental vehicles, there are several other key distinctions; CPO vehicles will often have a lower mileage and less wear and tear. Buyers may also find it easier to secure financing for a CPO vehicle.

For some people, buying a used car - whether that’s an ex-rental or a CPO - may not fully suit their needs. That’s where a vehicle subscription from FINN can make a lot of sense. With an array of modern vehicles and simple monthly pricing, getting on the road couldn’t be easier.

• Do your research. It’s advisable to not only look into the make and model of a car but also whether there are any known problems with the car. Additionally, seek out information from others who have purchased from a rental company; what was their experience like? Did they run into any issues due to the vehicle’s mileage? Was there more wear and tear than expected?
• Shop around. As with any big purchase, it can pay to see what is on offer from other sellers. You might find what you believe to be the perfect vehicle in the first place you look, but can you be certain you’re getting a deal if you haven’t looked elsewhere?
• Ask about the vehicle's maintenance history. Make sure the rental operator provides you with all paperwork relating to the car’s service history, and if there’s anything you’re unsure of, be sure to ask for clarification. 
• Inquire about warranties. Does the vehicle come with warranties? If so, what is covered? You should also be specific about whether those warranties are covered by the manufacturer, the rental company, or both. And don’t be shy about asking about any warranty exceptions - particularly if repairs would otherwise be expensive.
• Don’t be afraid to negotiate. While an ex-rental might be listed at a cheaper price than a comparable used car at a car dealer, you should still see if you can try to get the price lower. After all, once you take ownership of a former rental vehicle, you’re inheriting its reduced resale value, so it helps if you can save yourself a few dollars upfront.

Despite the reality that ex-rental cars typically have a higher mileage and are more susceptible to long-term maintenance costs, some drivers may be comfortable with those trade-offs. Again, rental companies will typically provide insight into a former rental car’s service history and will sell cars at a lower price than other dealerships.

Other car buyers will have a different set of priorities, not least of which is driving a vehicle that they can rely on. With a FINN car subscription, drivers experience peace of mind knowing they not only have access to a new vehicle, but that their monthly subscriber fee includes mileage, maintenance, and insurance.