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Should you buy an ex-rental car?

It’s a familiar experience known to millions of holidaying Brits. You arrive at your destination. From the airport, you transfer to a hot and sticky car rental office, queue for an eternity, because only one desk is open, even though several planes have just landed. You fill in a hefty document, sign away all your consumer rights in perpetuity and are handed a key.

The first warning sign is just how scuffed the fob is. Then you’re led out into the burning sun and pointed in the direction of your car. You pray the air conditioning is working, note the “wear and tear” of the bodywork, the tired and stained interior; tell-tale signs of being worked hard in unforgiving conditions over the course of a long summer season.

You could be forgiven for thinking all rental cars are the same, so why should you consider buying one when you’re in the market for a used car?

Pictured: How most people imagine an ex-rental car
Pictured: How most people imagine an ex-rental car

The simple answer is that a high percentage of new cars are bought by car rental companies, run for a short period and then disposed into the used car sector. They are then sold as nearly-new cars, one of the most sought-after parts of the used car market; current models, with recent registration plates and covered by a manufacturer’s warranty package.

So, it’s probably a good time to put aside any prejudices you might have about rental cars as these can be some of the best buys on the market.

The age advantage

Rental cars are typically run between eight and 12 months before their owners put them through auction where most are bought by dealers looking for desirable stock for their forecourts.

If you’re buying an ex-rental used car with cash then you won’t take the hit most new car buyers suffer as soon as they leave the showroom; that residual value drop has already happened!

 

If you’re taking out finance then you should benefit from competitive monthly rates, hopefully in line with your budget, whether you choose a Personal Contract Purchase (where you have the option of buying outright at the end of the contract) or Personal Contract Hire (where you don’t).

Do dealers have to reveal that cars are ex-rentals?

Yes. Under the 2008 Consumer Protection from Unfair Trading Regulations, dealers are obliged to tell you if a car they’re selling is an ex-rental. Failure to do so could result in them answering to Trading Standards and facing a hefty fine.

The days of saying an ex-rental car had one previous owner – which technically it has, albeit with multiple drivers – have passed, although cases are still reported.

If in doubt, ask the dealer who the previous owner was, rather than wait for the V5C registration document (generically referred to as the “log book”) to land on your doormat a couple of weeks after you’ve made your purchase. The dealer should have all the paperwork that goes with the car, so ask to see the V5C (and service books, while you’re at it).

Are ex-rentals a good buy?

That’s the million dollar question and there’s no definitive answer because there’s so many variables.

Rental cars can live short and hard lives. But if they’re in service with a reputable rental company, ideally a member of the British Vehicle and Rental Leasing Association (BVRLA), then processes would have been in place to ensure they were fit for purpose.

These vehicles will have been inspected, maintained, cleaned and serviced far more often than a privately-owned vehicle. Hertz for example, carries out oil, water and pressure level checks every six days.

The last thing a credible operator wants is the embarrassment of a car breaking down through their negligence. They also have a duty of care to inspect and rectify any reported faults from customers.

The rental company will probably have bought the vehicle direct from a car manufacturer and will aim to achieve as high a buy-back value as possible from the brand at the end of its tenure. After which it will be fed into the carmaker’s franchised dealer network.

Therefore, it’s up to the rental company to make sure the car is in the best possible condition to secure the highest possible return.

New car depreciation

But haven’t ex-rental cars been thrashed?

That’s the common perception. Rental cars are certainly subjected to extremes in driving behaviour. A typical monthly rotation could see a good driver followed by a hard braker, followed by a clutch rider, followed by an out and out speed merchant. That’s a lot of potential wear and tear.

However, there are counter arguments. Rental cars come with hefty insurance excesses, which could be as much as the first £1,000 of any damage. For many renters, that’s sufficient to make sure it is driven sensibly and returned in the best possible condition.

To support this argument, Accident Exchange, the specialist car repair company, reported that 60% of its rental claims relate to general bodywork repairs such as scratches and scuffs, rather than anything major or mechanical.

So why the negativity around buying ex-rental?

The industry hasn’t helped itself. Ex-rentals are still a grey area for many dealers because of the negative connotations around buying a car where the assumption is that it has been mistreated.

You’ll find no reference to a car being ex-rental on websites run by car manufacturers, dealers, car supermarkets or the online classifieds; sellers know the term can cause an unwanted barrier to purchase. Yet many ex-rental cars are sold as part of a car manufacturer’s approved used car programme and will include attractive bundled extras such as extended warranty and breakdown and recovery; but there is no mention of where they were sourced.

The waters are further muddied by some rental companies not using their trading names on the original V5C, choosing instead to use abbreviations or names of companies they’ve registered but don’t trade as.

Greater transparency would certainly help build consumer confidence and it’s encouraging that one of the biggest renters, Hertz, operates a transparent ex-rental sales service direct to buyers.

It’s your call

Ignoring ex-rental cars could severely limit your choice, especially if you’re after a nearly-new car in tip-top condition, which has been well maintained, is in the right colour and has all the bells and whistles you’re after.

Ultimately, you must be comfortable with your choice and that final decision is down to you.

Curtis Hutchinson
Curtis Hutchinson
Curtis Hutchinson is a member of the Guild of Motoring Writers and has been a senior motoring journalist for over 25 years. He has written extensively about the automotive industry as editor of both Company Car and Motor Trader where he won the coveted Newspress Business Publication of the Year Award. His work also appears in Fleet World and Fleet World International. In 2016 he was part of the founding team behind the relaunched London Motor Show.

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