If you’re in the market for a used car, you might consider looking at used rental cars.
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According to the automotive website Edmunds, rental companies will keep a car in their fleets for about a year before selling it off, first at auctions to National Auto Auction Association (NAAA) members and then directly to customers and used car dealers.
In the grand scheme of auto sales, that number makes up a very small part -- only about 2.2 percent of used vehicle sales overall.
In 2018, about 40.4 million used cars were sold, compared with about 17.2 million new vehicles.
Even though only a small portion of the population buys a used rental car, it could be worth your while.
Edmunds has researched the pros and cons of buying a rental vehicle -- and also has recommended five cars that could be a good choice if you want to buy a used rental: the 2019 Volkswagen Jetta, the 2017 Hyundai Accent SE, the 2019 Kia Optima LX, the 2018 Nissan Rogue S and the 2018 Toyota Avalon.
Those recommendations are based on the website’s data and comparisons to traditional dealership pricing:
Many of the reasons for purchasing a rental car are related to cost.
Edmunds says that because rental companies buy their cars in bulk and at a discounted rate, they can sell them at lower prices than a regular dealership.
Someone who buys a rental car is also likely to find a newer car -- just 1 or 2 years old -- at a lower cost than at a dealership. Rental car options are likely to have newer styles and better safety features for less.
Many rental companies, including Avis, Enterprise and Hertz also offer no-haggle pricing. Other helpful purchasing options include free two-hour test drives or three-day “rent to buy” programs (at Avis and Hertz). Enterprise and Hertz even have week-long return policies.
Rental companies also do a good job of maintaining their vehicles and many will give buyers a limited warranty.
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However, there are also negative aspects to consider.
Because so many people drive rental cars, it is difficult to know how hard a car has been driven.
Rental cars also have a higher-mileage inventory. In the U.S., the average miles driven per year is about 14,000, but rental cars can have double or triple the number of miles.
It doesn't help that rental companies are also holding onto cars longer and selling them later, with higher mileage. For example, at Hertz, the average holding time for a car went from 10 months in 2006 to 18 months in 2012, according to a report from The Wall Street Journal.
Another risk is that factory warranty coverage for a rental may have already expired, meaning you might have to pay any repairs out of pocket.
Edmunds also warns that rental companies typically buy base models, so it’s unlikely a rental car buyer will find upscale options.
The Associated Press contributed to this report.