Photo (cc) by Casey Serin
When my husband and I bought our last car, we gave it a 492-mile test drive.
During the summer of 2005, we rented a same-year Toyota Camry to attend a wedding two states away. Our old clunker was dying, and we didn’t trust it to make the trip. But after our Camry rental deftly navigated through road construction, gridlock, and open highway, we were hooked. We wanted to buy it.
And guess what? The company, Verc Car Rentals, let us. They gave us a great deal and even comped us the cost of the original rental. In fact, their entire fleet is for sale. “I will always sell a car to someone who wants it,” Verc Car owner Jack Vercollone told me.
Apparently, Verc Car isn’t unique. According to Jim Tennant of the Tennant Group, a rental-car consulting firm, companies will sell their cars to average Americans. “Renting a car is a great way to test any make and model that you’re not familiar with,” Tennant says. So if you’re thinking about driving down this path, here’s what you need to do…
1. Know what you’re getting into (literally)
Tennant says the typical car is a year to 18 months old. It’s a well-equipped popular model with 20,000 to 30,000 miles on the odometer. (Vercollone points out that last year’s tsunami in Japan created a shortage of Japanese cars, so the standard mileage might increase to 45,000 for a while.)
Rental companies buy their vehicles at deep discounts, either from dealers or directly from the manufacturer. When those vehicles reach their allotted mileage, the companies sell these cars back to the dealer or at auction. They’re still worth something because they’ve been scrupulously maintained with regular oil changes. Dealers will not buy back cars without strict maintenance standards, Tennant says.
2. Know what you’re not getting
While the price might be right, your choices are obviously limited to the most popular makes and models – because those are what people want to rent.
While www.hertzcarsales.com or www.enterprisecarsales.com let you search their stock of vehicles for sale – and even take your trade-in – smaller companies don’t have that capability. “But if you’re willing to wait for the vehicle you want, most smaller agencies will accommodate you,” Tennant says.
3. Don’t haggle
If you haggle, don’t expect to win. Because many of these vehicles have a guaranteed buyer (the dealer) or are heading to auction, rental agencies don’t have to sell to you. When they do, “we only make $500 to $1,000 more than we would by selling the cars at auction,” Vercollone says. “The margins are small.”
And there’s little time for haggling anyway. “Car rental companies need to get rid of their inventory quickly, regardless of who they sell it to,” Tennant says.
4. Don’t expect financing – or much else
For the financing, insurance, title, sales tax, and registration – well, you’re on your own if you’re buying from a small independent agency like Verc. Selling cars isn’t what they do best, so they don’t put a lot of time and effort into it.
“We don’t advertise,” Vercollone says. “We don’t have a big car lot or offer financing.”
The big chains like Hertz and Enterprise will send you to their “partners” like Chase and Bank of America. Their websites even offer financing calculators so you can figure out your monthly payments.
5. Ask for a free test drive
You’ve heard of test drives, which are usually a spin around the block with the new-car salesperson. Buying a rental car can mean a test drive that lasts days. Smaller companies like Verc Rentals offer “free rentals.” This can be done in a number of ways. Express a serious interest, and Verc simply gives you the car. Other places make you rent the car for a few days, and if you buy it, that cost is deducted from the sticker price. Some, but not all, larger chains do this too: Hertz offers a “3-day test rental.”
6. Take note of other perks
Be sure to ask that the manufacturer’s warranties are transferred to you. The rental company should also make any cosmetic repairs. Our Camry had a small dent, a stain on the back seat, and a missing ashtray. Because we don’t smoke, we didn’t care about the ashtray, but we did insist on the other problems being fixed. And they were. They even changed the oil and rotated the tires too.
So what about that Toyota Camry we bought? Did we get a good deal?
I called a nearby Toyota dealer and asked him for some basic information. At the time, a new Toyota Camry would have cost us about $20,500 – our same-year rental car was priced at $15,900 with 20,000 miles on the odometer.
I knew that the brand-new car version of our car would have depreciated at least $3,000 the moment it left the lot. Thus, by purchasing a rental car, we skipped the depreciation and received a $1,600 credit for the miles. Looking at it another way, we bought a well-maintained, slightly-used new car for a 22 percent discount. Not bad, given the fact that the car is still going strong 110,000 miles later.
While buying a rental car certainly isn’t for everyone, I found it much better and safer than buying a used car through a personal sale – yes, I trust a rental car company more than some individual I just met and will never see again. And I got perks and service no individual could offer.
For more on the topic, check out Used Cars That Are Better Than New?