Negotiation Tips: Used Rental Cars aka “Program Cars”
on Jan 30 in Used Cars tagged negotiation tips, used rental car by jasonl
One thing we like about used rental cars is that it’s pretty easy to get a deal on one. A used rental car is a commodity, and unless you’re looking for a specific color or feature, you can find them just about anywhere. (Read our article titled “Should You Buy a Used Rental Car?” if you’re not sure about buying a used program car.)
Listen to this article.
Before we give you our negotiation tips, we want to let you know how the used rental car system works. Once you understand the system, the negotiation tips will make a lot more sense.
Generally speaking, rental car companies go to big car manufacturers and lease thousands of cars from them each year. This lease only lasts six to twelve months, during which time the car is rented out at airports, vacation destinations, etc. The rental company then takes these cars back to the manufacturer, where they’re labeled “program vehicles” and sold at special dealer only auctions.
So, when you hear the words “program vehicle” or “program car,” that’s code for “used rental car.”
Our negotiation tips:
1) Tell the dealership that you know their “program car” is really a rental car. Telling the salesperson that you’re in on the secret lets you take control of the conversation.
2) Explain that you’re okay with buying a used rental car, but only if the price is really good. You’ve already exposed their secret, and now you’re taking advantage of the perceived lower value of a used rental to get a better price.
3) Let the salesperson know that if you don’t get the deal you want, you’ll go somewhere else. This threat is often times meaningless, but not when it comes to buying a used rental. The dealership knows that used rentals are commodities. By saying this, you’re telling them that if they’re going to sell you the car they need to do it on price.
4) Offer to wait for a different vehicle at a better price. Used rental cars are sold at auctions held once or twice a month. Tell the dealer that you’re willing to wait for them to buy a car at the next auction for a better price. Once the dealership manager knows that you’re not in a hurry, they’ll probably try harder to sell you the car they have than risk you leaving and buying somewhere else. Remember – one of the keys to getting a good deal is to be patient.
5) Make sure you walk away. Once the dealership has made their best offer, let them know that you’ll consider it, and then leave. By leaving, you make sure you’re getting the best price. Sometimes, you might be gone just five minutes before you get a phone call with a better price. In fact you might not even make it out the door before the manager runs out to tell you to he/she can take a couple of hundred dollars off. Physically leaving is the best way to make sure you’ve been given the dealer’s best price.
Once the sale is over, it’s a good time to familiarize yourself with used car financing basics, as well as review some of our car financing tips.
Should You Buy A Used Rental Car?
on Nov 19 in What to Buy tagged deciding what to buy, Used Cars, used rental car by jasonl
Used rental cars can be found on just about any car lot in America, and for good reason. They’re an excellent compromise between buying an older used car and buying a brand new vehicle. Used rental cars tend to have fairly low mileage, they’re almost always less than a year old, and they’re thousands of dollars less than a new version of the same car. Unfortunately, used rental cars also tend to be a little rough around the edges. Because rental cars are commonly used and abused by their renters, they tend to have more scratches, dents, dings, and general wear-and-tear than a non-rental car of the same age. But just because a used rental car has a little more wear, that doesn’t mean they’re not a good deal. None the less, they’re not for everyone. Here’s how you can figure out if a used rental car is right for you:
Note: Here’s some tips you can use to figure out if a car used to be a rental.
1) How long are you going to keep it?
Just like we talked about in Questions You Should Ask Before Buying Used, it’s important for you to know how long you’re going to keep the car you buy. Used rental cars tend to have more general wear, so they don’t hold up as well 5 to 10 years down the road as a privately owned used car. If you’re looking to buy something that will last forever, you probably shouldn’t consider a used rental car.
2) Do stains, smells, scratches, and dents really bother you?
While no one likes stains, smells, scratches, etc., most of us are willing to live with one or two. But the thing about used rental cars is that they almost always have more stains, more smells, more scratches, and more dents than you’d find on a non-rental used. Don’t get me wrong here – some used rental cars are in excellent shape (particularly those commonly rented by retirees). But if you’re sensitive to certain smells (like cigarette smoke, for instance), if you’re a neat freak, or if you’re just picky (which is OK as far as I’m concerned), a used rental car isn’t a good choice.
3) Are you simply looking for basic transportation?
If you’re not going to be emotionally attached to your car, a used rental car is an excellent idea. They often qualify for factory backed “certified used programs”, which include upgraded warranty coverage and special financing rates that often compare to new vehicle financing rates. Here’s a good example of what I’m talking about – I had a customer who was a traveling salesman. He spent most of his life in his car, driving from place to place. He needed a car that was fairly new in order to keep up appearances, as well as something that was very reliable (preferably with a warranty). But he didn’t really care about wear and tear, and he wanted to spend as little money as possible. For him, a used rental car was the perfect choice.
4) Are you credit-challenged?
If your credit is less than perfect, a used rental car is a good way to buy a fairly new car while keeping your monthly payments down. Used rental cars often qualify for factory backed “certified used” programs, which usually have aggressive financing available for people with bad credit. Used rental cars also tend to be easier to qualify for (credit wise) than other used cars because of the way they’re valued by the bank. If you’re credit challenged, make sure you investigate this option.
5) Rental cars are well maintained and tend to have few mechanical problems.
It may sound crazy, but rental cars are usually better maintained than cars owned by a private individual. Rental car companies don’t actually buy new cars from the manufacturers — they lease them. A company like Hertz will lease a new Toyota Corolla from Toyota, returning the vehicle to Toyota once it reaches a certain age or mileage (hence the terms “fleet vehicle” and “program car”). One of the terms of the lease is that the rental car company must perform all the manufacturer’s suggested maintenance, and must retain proof of doing so. Rental companies also tend to do a nice job of getting things fixed or adjusted under warranty.
As always, take your time when buying a used car. Do your used car research, get multiple used car financing quotes, and feel free to contact us with your questions.
