Rental car companies are offering up some good deals on used cars
New York (CNN)With travelers staying close to home and airports turned into virtual ghost towns, rental car companies have taken a huge hit during the coronavirus pandemic. On Friday Hertz, which also operates the Dollar and Thrifty agencies, declared bankruptcy. Industry experts expect the company to sell off a large portion of its fleet.
Rental car companies routinely sell off cars, usually after a year or two of service. For instance, Enterprise, which also operates the Alamo and National brands, sells a million used cars a year globally, according to a spokeswoman. The rental car industry has ground to a near halt. They often sell these cars online with no-haggle pricing and at a significant discount to other used car sellers.
Take advantage of tryout periods All of the major car rental companies -- Hertz, Enterprise, Alamo Avis, Budget and others -- list their used rental cars for sale on their web sites. Shoppers can search inventories and test drives are usually much more generous than you'll find at typical used car dealers. Drury said he was able to take his car out for hours before deciding to buy it. Hertz will even bring the car to you for a test drive if you live within 75 miles of one of their rental locations. Shoppers can also "rent to own" a car. Hertz's Rent2Buy program offers three-day rentals for prospective buyers who can then buy the car if they like it. Enterprise offers a seven-day buy back period on its used cars. During that week, the car can be returned for the purchase price, minus a $200 restocking fee, according to the company's website.
But is the car in good shape? The idea of buying a used rental car makes some people uneasy. The car may have had a brutal life. Renters have little incentive to treat a car gently, the thinking goes. Rental cars also often drive more miles in a year than cars owned or leased by an individual. On the other hand, rental car companies have an incentive to maintain the cars well to preserve as much value in them as possible and to make sure their customers don't have issues with them.
Potential buyers should take advantage of the long try-out periods to get the car inspected by a mechanic and make sure it has no hidden issues, said Jon Linkov, an editor with Consumer Reports magazine. He also recommends buying from one of the major rental car companies rather than a smaller operation.
Check out your financing options Shoppers should also research their financing options before buying, Linkov said. Again, that's always a good practice regardless of where you're buying the car. The rental companies often have good financing options for customers with excellent credit -- Avis, for instance, is offering 0% down and no payments for 45 days -- but you might do even better on your own working with a bank or credit union.