In better times, Hertz took out a big loan and put up their vast inventory of cars as collateral. COVID-19 caused the lender to worry about getting their money back, so they called in the loan. Hertz doesn’t exactly have much cashflow right now, so they are forced to sell off the cars in the hopes of surviving bankruptcy.
So, I found myself browsing HertzCarSales.com for the first time. I’ve never seriously considered buying a car from a rental agency, mostly due to the fact that I didn’t want a Dodge Caravan last redesigned in 1996. However, I did buy a cheap off-lease corporate fleet car from my employer, and it worked out great. Is buying a used rental car from Hertz a great idea, or a stupid idea? Here are some arguments from both sides.
Reasons why a used Hertz rental car may be BETTER than you think:
- Check the in-service date and determine how much of the factory warranty is remaining; it could be a significant amount.
- Hertz will let you bring it to a mechanic and do your own inspection.
- No-haggle pricing will be appreciated by some, similar to CarMax.
- All Hertz Certified vehicles include a 12-month/12,000-mile (whichever comes first) limited powertrain warranty.
- Hertz has a better reputation of doing regular maintenance on their cars than lesser-known car rental companies. According to the Hertz website, while they do not provide copies of maintenance records, you can view the maintenance records in person.
- Hertz is usually the most expensive option for a casual traveler. Most of their business is corporate and government workers. Business travelers tend to simply use the car as a tool to get from the airport to/from office/hotel, so the car will likely be in better shape than perhaps with other companies.
- You can return your vehicle within 7 days or 250 miles after your purchase, whichever comes first. A cleaning and recertification fee of $200 will be deducted (unless prohibited by law), as well as any excess wear or damage to the vehicle.
- Normally, used cars are subject to the “lemon” theory: people tend to sell the cars with problems. However, a rental agency does things robotically – all cars at a certain age are sold. They already bought the car at a highly-discounted bulk rate from the manufacturer, and they just need to get the car off their books in an expedient manner.
- Some reports claim that the more “beat up” cars, especially cosmetically with dings and stains, never make it to the sale lot and are instead sold more cheaply via wholesale auctions.
- Healthcare worker and first responders currently get $350 off with promo code HCS-HERO.
Reasons why a used Hertz rental car may be WORSE than you think:
- Rental cars have a “fleet” or “rental” designation on the title, which stays with the car and can affect future resale value.
- The reputation is that these cars are more “beaten up” given their mileage. I used to accelerate a little harder on freeway onramps in a rental car (it was usually the econobox version so not much excitement anyway), and was probably a bit more liberal with the air conditioning in those humid summers. However, I was still careful as I often skipped the insurance waiver on personal rentals.
- You won’t get the “1 owner who drove it only on the freeway and was a neat freak with perfect maintenance records” car.
- Anecdotally, cars that are made for “fleets” are of lower quality because the factory workers know these are fleet cars when they build them, and thus care less about quality control and more about pumping out 100 of the exact same car.
- Some rental car agencies self-insure their cars and do repairs in-house, which means accidents are not necessarily reported on CarFax or other vehicle history reports.
- Never buy “sports cars” as these are rented specifically so you can have fun going fast in them and do things you wouldn’t do in your normal car. Same deal with pickups, they are likely used heavily nearly every rental.
- They will still add some sort of $200 to $400 documentation fee and attempt to upsell you various extended warranties, just as any other used car dealer.
Used car marketplace iSeeCars.com compared Hertz prices with their estimate of market value to find which models had the steepest discounts. I didn’t really find the results to be very useful though, as most models are rather rare with very limited availability (BMW 7-Series, MB A-Class, Buick Cascada?). The only Honda/Toyota/Mazda on the list was the Toyota Tundra, and I couldn’t find a single one within 200 miles of my location.
I tried to run some comparisons myself for a popular model with decent inventory like the Toyota RAV-4. This black 2019 Toyota RAV-4 XLE AWD (Hertz) with 22,000 miles was $23,587. This black 2019 Toyota RAV-4 XLE AWD (AutoTrader) with 22,000 miles was $21,689. I didn’t drill down into the options, but this shows that you should definitely do some comparison shopping first.
In the end, the process is similar to buying any used car and comes down to price. You need consider the reliability of the make/model, do your own personal pre-purchase inspection with an expert, and comparison shop across the same model, same options list, and similar mileage. Read the factors above and then add your own “Hertz adjustment”. Is the Hertz no-haggle price still the best deal?
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I had always bought my cars new until a couple of years ago, when I bought a Hertz vehicle at an extraordinary price. I have been very satisfied with that car. The kicker was, the car had some scraches on the paint near the trunk (which I attributed to someone carelessly loading/unloading something into the trunk, but thought others might interpret as an accident), and the interior was dirty (why the Hertz people didn’t clean it was beyond me).
My daughter is in the process of evaluating a Hertz car for purchase. So your post could not have come at a better time!
Can you talk a bit more about a couple of the “WORSE” bullet points?
#1. Is there any data that you know of, say in Blue Book or some other source, that would quantify the eefect on resale value?
#4. If anything, I’d think they’d be MORE careful with fleet vehicles, because the buyer is keeping metrics on the fleet that an individual car buyer would not. An individual car buyer has no statistical sample to use as a basis for evaluation.
#5. Does Hertz, specifically, self-insure? IIRC I have seen CarFax accidents on some of their cars.
#1 – I don’t know of a source to quantify it either, just stuff like this:
I suppose rental cars just have that unknown factor and just turn off some potential buyers. Some folks only want the “1 past owner” car. I’ve read that some lenders don’t like financing a fleet vehicle, so this might remove potential buyers that way.
#4 – I agree that this is just speculation either way. I would worry much more about the make and model than this bullet point.
#5 – You can probably find this in their corporate stock disclosures. My guess is that they do self-insure for individual accidents, but probably purchase some sort of re-insurance for big catastrophes like a hurricane that might wipe out thousands of cars. Here is a 2014 reference to the fact that Enterprise does self-insure.
https://autodealerbuzz.com/2014/09/11/674/
Here is reference to Hertz being self-insured as of 1998:
https://mn.gov/law-library-stat/archive/supct/9801/c3962050.htm
Wow, thanks so much for your thoughtful and thorough reply!
I looked at Enterprise and their buying process is similar: no haggle pricing, 12mo warranty, easy returns, etc. Keep in mind there is no choice of trim, it’s just what they offer, usually middle/lower trims. Also there have probably been 100+ ppl who have driven that car before selling and like you mentioned, ppl tend to abuse rentals. I also found Enterprise’s pricing to be high. They provide you a kbb price comparison, but even that number was inflated. In the end, I decided against buying a used rental.
It may be somewhat different overseas. My last three cars (Ford Mondeo/Fusion) were purchased from a Ford dealer and all had been Herz rentals. They were a year old and had ~25,000km on them. Apparently they lease them from Ford for a year then they go back to the Ford dealer wholesale market for the dealers to purchase and resell. These cars are sold at drastically reduced prices and still have dealer warranty on them. I’ve never had an issue with any of them and they were practically new with no dings or accidents, it’s law over here for the dealer or any seller to report any accidents. I would say it is well worth it.7
I had no idea that there was a chance for them to hide any major accident from the buyer until I had to deal with it myself. I found a nice SUV but the mileage seemed a bit suspicious so I took out carvertical history report myself and was pleasantly surprised that mileage was real…. but apparently the accident record was missing in carfax report. carvertical report showed that the the whole driver side door to front wheel was damaged and airbags went off. It was simply not worth the risk and my money. I got my an SUV that my brother-in-law decided to sell with more mileage and it was a bit older but at least it had a clean history.
Hertz has 700+ cars for sale here. 100+ from Chevy, Nissan, Kia/Hyundai
My parents bought a used rental car in the 1980’s. It was a good price and the car worked well for many years.
Go big and buy one of the 100 year ‘vettes they are selling off!
Kidding. I would be worried about how long those cars would last without major mechanical repairs.
Like you said, people have driven rentals pretty hard. It may cost more in the long run
Over 20 years I ago I bought 2 different cars from Enterprise Car Sales and both worked out very well. The first was a Ford Escort that had been used as a rental (very clean inside and outside though) and sold at 36k miles when the manufacturer’s warranty had expired. The second was a Nissan Maxima that was used as a company fleet lease car and was sold with only 12K miles on it (practically brand new inside and out), so it had 24K of the original manufacturer’s warranty. Both were sold at low Kelley Blue Book value. As far as used cars go, I’d trust a major rental company to do all the scheduled maintenance more than the average Joe. Also, I dispute the idea that people drive/abuse rental cars any more than their personal cars. People think they are going to do that, but then their natural habits kick in and they just act the way they have always acted.