Should I Buy a Used Fleet Vehicle?
If you’re in the market for a used car, you have a lot of avenues to explore. You could peruse online classifieds, like eBay Motors, Facebook Marketplace, Cars.com and Craigslist, or perhaps, you might want to take the certified pre-owned vehicle route and head to a dealership. There is still another option when purchasing a vehicle, however: buying a used fleet vehicle. A fleet vehicle is a vehicle that was previously owned as a company car, government vehicle or part of a rental fleet and can sometimes include things like former police cruisers or U-Haul trucks. While those can be useful vehicles, this story will deal specifically with more common fleet vehicles that you might see on the used market. There are a number of things to consider before buying one. Read on to learn more.
- What is a fleet vehicle?
- Pros and cons of buying a fleet vehicle
- Where do you find fleet vehicles for sale?
- How do you finance a fleet vehicle?
- The bottom line
What is a fleet vehicle?
A fleet vehicle is any vehicle that was owned by a company or government and used for their business. There are a variety of types of fleet vehicles, including those that were owned as company cars, those owned by the government, those owned by a dealership or auto manufacturer and those owned by a rental car company.
When a car has reached the end of its term with the company or government agency (usually determined by the company or agency that owns the vehicle), it gets sold. For example, the cars you rent from a national car rental companies (Hertz, Avis or Enterprise, for example) are in great shape — and they are usually around 1 to 2 years old. Those cars are eventually sold to the public to recoup some of the cost of the original purchase. Since rental car companies purchase cars in volume and at a discount, you may be able to find a great deal on a fleet sale from a rental car company.
According to Matt Jones, senior consumer advice editor for Edmunds.com, it’s difficult to pinpoint how much you can potentially save by buying a used fleet vehicle. In a 2017 study of the used vehicle market, Edmunds analysts compared vehicles of the exact same trim level to determine the difference between used vehicles that came from rental fleets and those that did not. Their findings? Customers can save an average of 9% if they buy from a rental car company, as opposed to a dealership.
Jones noted the savings can be significant: “They are absolutely a viable solution for somebody who’s looking to make the most out of their dollar.”
As for the types of used fleet vehicles for sale, consumers will find scores of makes and models. On Hertz’s website, for example, you’ll find convertibles, coupes, sedans, SUVs, minivans, trucks and wagons. A quick make/model search unearthed many well-known brands; Nissan, Chevrolet, Toyota and Kia are among the more popular ones.
Pros and cons of buying a fleet vehicle
Before you travel down the used fleet vehicle path, you’ll want to weigh the pluses and minuses for buying one.
According to Jones, the biggest plus is knowing you are, in his words, “virtually guaranteed” to get a vehicle that has been maintained correctly. Rental companies and any company that manages a fleet of vehicles are vigilant about strictly adhering to service schedules; that’s not the case when you buy a used car from a private seller, or even a dealership.
“There is no mandate that requires a person [to] take care of their car,” said Jones. “They should; no guarantee that they do. But these rental car companies must.”
As for the worry that people don’t treat rental cars or fleet vehicles well? As Jones said, that’s mostly a myth.
“I don’t find that to be true,” he said. “Nobody’s doing burnouts in Honda Odysseys. It’s regular people doing regular things. It’s not all burnouts and stuff.”
Another benefit? A seamless, simple shopping experience. Rental companies, in particular, are easy to purchase used fleet cars from. They will generally offer comprehensive information on fixed pricing, financing and thousands of vehicles, depending on where you live. Also, because the cars are usually less than two years old, the balance of the warranty is often in effect.
Jones also mentioned that depreciation can mean that you get a better deal. “I’ll take that higher mileage on the odometer in exchange for a higher rate of depreciation and save more money,” he said.
As for the potential drawbacks, Jones claimed the one that jumps out to him is, essentially, FOMO, or “fear of missing out.”
“[It’s] this feeling of ‘Did I make the right choice?’” Jones said. “If you have any doubt about what you’ve done, that’s an incredible drawback because that doubt lingers with people every time they get inside the car.”
Jones added that sometimes there’s “an emotional aura that encompasses vehicles for some people,” and that may prevent someone from snagging a great deal.
Another downside? Rental cars and fleet vehicles tend to be base model cars. So if you’re jonesing for a car with heated seats or a power liftgate, you may not get those bells and whistles with a used fleet vehicle.
Another thing to consider, Jones said, is that the market may be saturated with the type of vehicle you’ve purchased from a rental car company, and that may bring down the vehicle’s value later on; this could be a negative, particularly if you plan to sell the vehicle. He gave the example of someone who drives a Nissan Altima, and lives in Los Angeles. Let’s say 150,000 Nissan Altima rentals populate the roads — this could be problematic for you down the line.
“When you want to sell your Nissan Altima,” Jones said, “[you’ll be] competing with the other 150,000 rental Nissan Altimas that are on the ground. So that might give you a depreciation curve that’s a little bit steeper than you might normally get when you were trading in a car.”
According to Greg Pence, general manager of auto buying for AAA of the Carolinas, one of the biggest drawbacks to fleet vehicles are the number of drivers who got behind the wheel: “That’s normally not a good thing for any kind of car. You got some people that drive them slow, and some people that run them really hard.”
Overall, though, Pence thinks fleet vehicles are a great way to save some cash, as some former rental cars can be roughly $1,000 to $3,000 less than a traditional used car, in many cases.
Where do you find fleet vehicles for sale?
There are a number of places to shop for a used fleet vehicle. You can browse used municipal fleet vehicles, like police vehicles and other cars and trucks, on websites like Copart and Capital Auto Auction, which features hundreds of municipal fleet vehicles available for auction.
Copart also lists vehicles from rental car companies like Enterprise, Hertz, Avis, Advantage and Fox Rent A Car. It has live online auctions every Wednesday and preliminary bids can be placed on these vehicles anytime before the live auction begins. You can place bids from your computer or your mobile device.
Another option is to bid through a broker, businesses like Auto Bid Master or Salvage Reseller. Utilizing a broker can be a great way to answer questions about certain vehicles and the auction process as a whole. Many brokers also provide financing, inspection, parts locating, repair and transportation services if needed.
Rental car companies
If you’d rather not buy via auction, most national rental car companies have a sales division. Hertz, Avis, Enterprise and Thrifty all offer rental cars for sale. On the Hertz website, it gives interested buyers information on trading in their current vehicle, and even a Rent2Buy option, which requires just three steps — choose your car, rent it for three days and either buy it or move on. Enterprise has a seven-day buyback offer, which does require forking over a $200 restocking fee.
Jones said some car rental companies use digital billboards to spread the word about car sales, but most of the searches are done online. “The rental car companies do a pretty good job on their own of advertising,” he added, “and those in the know peruse the rental car companies’ websites.”
As for finding government vehicles for sale, GovPlanet and GovSales lists thousands of used cars and trucks, from cruisers and sedans to vans and pickup trucks. Since these sites are mostly auction-based, interested buyers will have to find local auctions or listings for live auctions through the site. For GovSales, online auctions allow bidding on items over a set period of time, typically about a week. Folks should do a quick location search to see what type of vehicle is available in their area.
Finding a local auction is another option. According to Pence, there are a number of regional auctions sprinkled throughout the country.
“A lot of the cities have their own options,” he explained. “They’re usually maintained and owned by people that open them up, basically. So there’s a lot of small options like that out there.”
Most auction sites, though, are owned by Manheim, perhaps the largest vehicle remarketing service in North America.
How do you finance a fleet vehicle?
If you don’t go the auction route, getting a loan for a fleet vehicle isn’t much different than getting a loan for any other used car. Many of the car rental companies and auction sites have payment calculators and links to financing lenders to assist those interested in buying a vehicle. You can also utilize LendingTree’s payment calculator here.
According to Pence, banks don’t discriminate against fleet cars: “In most cases, they’re just going to look at the value of the vehicle, and the miles against the Vehicle Identification Number (VIN), and the history, and borrow money against that.”
Jones advised taking a few minutes to get pre-approved for a loan “just in case” — so you have a barometer to measure what you’re buying. “It doesn’t hurt your credit if you have it run more than once for this type of purchase within a short span, say within a week. It doesn’t cause you any extra pain on your credit report,” he said.
You could fill out a single online form at LendingTree and receive up to five potential used car loan offers from lenders, depending on your creditworthiness.
The bottom line
A used fleet vehicle can be a great purchase for those who understand the positives, and potential negatives of these types of cars. By doing your research, weighing the pluses (well-maintained car, intact warranty, cost savings) with the potential minuses (potentially no bells and whistles, high mileage, potential for market saturation when you are ready to sell), you’ll be better equipped to make the decision of which type of used car makes the most sense for you.