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Buying a used car is a great way to save money on a vehicle purchase. While you can buy used vehicles from dealerships and private sellers, a lesser-known option would be to purchase a used rental car. This can be a unique way to get a newer, reliable, well-maintained vehicle at an affordable price. While they may have more kilometres on the odometer, they may also be thoroughly inspected and come with extended warranty options. 

Let’s take a closer look at buying a used rental car in Canada to help you decide if this is a good option for you.


Key Points

  • Car rental companies often sell off their older fleet to make room for new inventory.
  • You may be able to get a good deal on a gently used, relatively newer vehicle by purchasing a used rental car.
  • You can finance a used rental car through bank loans, in-house financing with rental companies, and online lenders. 
  • Be sure to consider factors like mileage, wear and tear, and warranty before buying a used rental car.


Can You Buy A Used Rental Car In Canada?

Yes, you can buy a used rental car from Canada. These vehicles are available from the following sources:

  • Car rental companies. The most obvious place to find a used rental car for sale is from a rental company. These agencies often sell off older models to make room for a newer fleet of rental vehicles to be used for their rental businesses. 
  • Car dealerships. Many dealerships sell used rental cars, often sourced from rental companies like Budget, Hertz, and Avis. 
  • Auctions. Many car rental companies sell their older fleet of rental vehicles through auctions, both in-person and online.

Depending on your financial situation, you can either pay for a used rental car in cash upfront if you have the funds readily available or finance the vehicle with a car loan.

Why Do Rental Companies Sell Their Rental Cars?
Rental companies aren’t just trying to get rid of cars in bad shape—they’re making room for newer models, not because there’s anything wrong with the current ones. Think about it: would you rather rent a near-new car or an older model without the latest features? Reputable rental companies regularly refresh their fleets to keep customers coming back. While there’s always a chance of getting a lemon, buying a used rental is no riskier than buying from a dealer or private seller.


Where Can You Buy A Used Rental Car?

Used rental cars can be purchased directly through rental car companies, as most of these firms have sales divisions that deal with these transactions. Car rental companies like Hertz, Avis, and Budget usually have a separate fleet available for purchase.

Hertz Rent2Buy® Program

The Hertz Rent2Buy program allows buyers to test drive used rental vehicles for up to 3 days before committing to a purchase. Car buyers can get great prices on well-maintained vehicles that include a 12-month/12,000-mile powertrain warranty, 1 year of roadside assistance, towing coverage, and rental car coverage. 

Alamo / Enterprise

Alamo has partnered with Enterprise to offer the Enterprise Car Sales program, which sells gently used vehicles from their rental fleet. Car buyers can purchase recent-model vehicles that have been thoroughly inspected and come with a free CARFAX Vehicle History Report. Buyers can browse inventory online or visit a local Enterprise dealership and take advantage of competitive financing options.

Auctions

Some auctions allow car buyers to bid on used rental vehicles. Auctions source their rental vehicles from rental companies, like Hertz or Alamo. While some auctions are held in person, many also take place online. You can check out online auction sites like Copart to find a gently used rental car for sale and place your bid.

Car Dealerships

Many car dealerships purchase rental vehicles from rental companies or at auctions and resell them to consumers. You can visit local dealerships to see what they have in stock, or visit their website to peruse their online listings. 


How To Finance Your Used Rental Car

If you need financial assistance covering the cost of a used rental car purchase, you can get an auto loan from the following sources:

In-House Financing From Rental Companies

Depending on where you buy the rental car from, the rental company itself may offer financing solutions. This can be a very convenient option, as it allows you to find, buy, and finance your used rental car all in one place. 

For instance, both Hertz and Alamo offer financing options for consumers purchasing used rental vehicles. Both companies provide flexible financing options to suit all budgets and ensure a streamlined purchasing experience.

Learn more: In-House Car Financing, Is it Right For You?

Banks

Bank auto loans typically come with the most competitive rates, especially if you have a high income and excellent credit. A used car loan from your bank is also a good option if you prefer a predictable repayment plan from an established and stable lending institution. However, bank loans often require more documentation and tend to take longer for approval.

Online Lenders

Online lenders can be a convenient source for used auto loans. Applications can be done entirely online, with funds to come shortly after. However, interest rates can often be higher compared to bank loans, especially if you have bad credit. That said, online lenders may be your best and only option if you have poor credit and need funds to cover the cost of a used rental car purchase. 

Learn more: Should You Get A Loan For A Used Car?


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Benefits Of Buying A Used Rental Car

There are plenty of advantages of buying a used rental car, including the following:

  • Lower Prices: Prices may be slightly lower for a used rental car because rental car companies purchase their vehicles in bulk.
  • Regular Maintenance: Rental companies usually stay on top of repairs and maintenance, which means the odds of the vehicle being in decent shape are pretty good.
  • Warranty May Still Be In Effect: Most cars are still fairly new, so you may still be able to take advantage of the warranty.
  • Vehicle Report Availability: Third-party vehicle history reports may be available.
  • Test Drive: You may be able to keep the car for a few days to test it out before buying it.
  • Lower Rate Of Depreciation: When you buy a new car, it can depreciate by as much as 20% in the first year. When you buy gently used from a rental company, you can avoid that rapid depreciation rate. A car that’s around 2 or 3 years old has already seen its biggest decline in value before you purchase it, reducing the loss you assume. 


Drawbacks Of Buying A Used Rental Car

There may also be potential disadvantages of buying a used rental car, including the following:

  • Luxury Features May Be Lacking: Rental cars are usually base models that don’t have all the frills that other used car sources might offer.
  • Multiple Drivers: It’s difficult to know the full history of the car because there are so many people who have driven it before.
  • High Mileage: The mileage might be high based on how often and how far certain cars have been driven.
  • Stigma: A car that’s previously been used as a rental vehicle may be too much for some people to handle if you choose to sell in the future.


What Should You Do Before You Buy?

Before you buy a used rental car, there are a few steps you should take first to make sure you’re getting a good deal:

Have The Vehicle Inspected

Even though the vehicle may have been well-maintained by the rental company, it’s still a used car. As such, make sure it’s thoroughly inspected, and request a vehicle history report.

Shop Around And Compare Lenders

Plenty of used rental vehicles are available for sale. Take some time to compare different offers to make sure the price you pay is a fair one.

Use an online loan comparison site like Loans Canada to compare loans and the rates and terms from different lenders to find the best deal.

Test Drive The Vehicle

Always take a used car out for a test drive before committing to a purchase to ensure it’s in good driving condition.

Consider The Mileage

Watch out for cars that have super high odometer readings, particularly as they relate to the car’s age. While rental vehicles tend to accumulate mileage quickly, you still want to be wary of cars that have over 50,000 km and are only a couple of years old. These may lead to more wear and tear and the need for additional maintenance or repairs.

Excessive Interior Issues

Since rental cars get a lot of use from multiple people, the odds of there being a lot of interior wear and tear may be higher compared to used vehicles that were not commercially owned. Inspect all the high traffic areas, like the seats, door handles, dashboard, and steering wheel and look for signs of excessive wear that may affect its value. 


Final Thoughts

There are some good deals to be had on used rental cars. You can take advantage of lower prices on newer vehicles rather than pay full price for a brand new car that instantly loses its value the moment it’s driven off the dealer’s lot. As long as you do your due diligence before signing a contract, there may be a good deal to be had on the purchase of a used rental car.


Buying A Used Rental Car FAQs

Can I get a warranty on a used rental car? 

Some rental companies may provide limited warranties, though you should verify the terms of the warranty before buying it. 

Are rental cars cheaper than regular used cars? 

Yes, rental cars are often priced slightly lower than similar used vehicles sold at a dealership. 

Can I negotiate the price of a used rental car? 

Yes, rental companies may be open to negotiating the car price, as they are typically motivated to move older inventory out to make room for a new fleet of cars. 

Can I finance a used rental car?

  Yes, car financing is typically available for used rental cars, much like regular used vehicles. Auto financing for used cars can come from banks, credit unions, in-house dealership financing, and online lenders. You can even take out a personal loan to finance the purchase of a used car and use the money to shop like a cash buyer.

Where can I buy a used rental car?

  You can find used rental cars directly from rental companies, car dealerships, and online platforms.
Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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