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Buying Used Rental Cars in Canada

Buying Used Rental Cars in Canada

Buying a used rental car can be a great way to get a quality vehicle for less money in Canada. Rental cars are usually well-maintained and have lower mileage than comparable used cars. Plus, rental companies regularly update their fleets with newer models. This means you can often find cars that are only a year or two old for thousands less than the original sticker price.


However, it’s important to do your research before purchasing a used rental car. You’ll want to carefully inspect the vehicle’s history and condition, and understand any remaining warranty coverage. It’s also key to negotiate the best possible price, as rental car companies are motivated sellers.


By following a few smart strategies, you can find an excellent used rental car deal in Canada. This guide covers where to find inventory, how to check a vehicle’s background, financing and insurance considerations, importing cars from the US, and tips for registering and titling a used rental car.

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Lower Prices

One of the biggest benefits of buying a used rental car is the lower price compared to regular used cars. Rental cars tend to be priced 10-25% below comparable non-rental used cars. There are a few reasons rental cars can be sold for less:

 

  • Rental car companies buy vehicles in bulk at fleet discounts, allowing them to get lower initial pricing from the manufacturer.
  • Since rentals are part of a large fleet, individual vehicles depreciate slower than personal vehicles.
  • Rental cars are typically sold after 1-2 years of use, meaning they have fairly low mileage compared to similar aged personal vehicles.
  • Maintenance is done regularly by the rental company to keep the fleet in good shape.

 

When negotiating for a used rental car, research the fair market retail price for that make/model/year and mileage. Use that as leverage to negotiate an even lower price from the rental company or used car dealer. It’s not uncommon to get a used rental car for 20-30% off regular used car prices for a given vehicle.

The key is knowing your budget, inspecting the car thoroughly, getting a vehicle history report, and being prepared to walk away if you can’t get a fair price. With some negotiation skills, you can land a great used rental car deal.

 

Good Condition

One of the biggest advantages of buying a used rental car is that they are usually in very good condition despite having previous drivers. Rental car companies have large fleets that undergo regular maintenance and get refurbished frequently. This keeps the overall mileage low and ensures the vehicles are mechanically sound.

Rental cars tend to be driven far less than privately owned vehicles. Fleets are constantly cycled through as older cars get sold and new models are purchased. It’s not uncommon to find 1-3 year old rental cars for sale with only 25,000-40,000 kms. Low mileage reduces wear and tear, so components like the engine, transmission, and chassis will be in better condition.

Fleet vehicles follow strict maintenance routines as well. Oil changes, inspections, tire rotations, and other services are performed at regular intervals by trained technicians. This prevents major issues from arising and keeps the cars running smoothly. Any mechanical problems get fixed right away to minimize downtime.

Before being listed for sale, used rental cars are refurbished to bring them up to near-new condition. This involves thorough cleaning, cosmetic touch-ups, mechanical inspections, and repairs as needed. Some rental companies even replace tires, brakes, fluids, and other wear items. The refurbishing process ensures buyers get the best version of that used vehicle.

 

Newer Models

One of the best parts of buying a used rental car is that you’ll often find newer models with the latest features and technology. Rental car companies need to keep their fleets fresh in order to stay competitive, so they regularly replace vehicles after 1-2 years of service.

This means rental car inventory often consists of models that are only a couple years old. For comparison, the average age of all vehicles on the road is over 11 years old. So when you buy a used rental car, you can get a much newer vehicle than buying a standard used car from a private seller or dealer.

These late model used rentals give you access to the newest safety systems, infotainment, and creature comforts. This includes things like:

 

  • Advanced driver assistance features like automatic emergency braking, lane keep assist, blind spot monitoring, etc.
  • The latest touchscreen interfaces with Apple CarPlay and Android Auto
  • Heated/ventilated seats
  • Surround view camera systems
  • WiFi hotspots
  • And much more!

 

Rather than buying an older used car and missing out on the newest tech and design, you can find a lightly used rental car with all the bells and whistles. For those looking for the most modern features in a used vehicle, ex-rentals are a great option.

 

Warranties on Used Rental Cars

Used rental cars often come with attractive warranty options to provide buyers with peace of mind. Here are some key things to know about warranties when buying a used rental car in Canada:

 

Types of Warranty Coverage

There are a few common types of warranties offered on used rental cars:

 

  • Manufacturer’s warranty – Covers defects in materials/workmanship for a set time/mileage
  • Certified Pre-Owned warranty – Extended coverage offered by the manufacturer on certified used cars
  • Dealer warranty – Provided by the selling dealer to cover certain repairs
  • Extended warranties – Optional extra coverage purchased for added protection

 

Length of Coverage

Factory warranties on new rental cars typically last 3 years/60,000 km. Certified Pre-Owned cars may extend coverage to 4-5 years/80,000+ km. Dealer and extended warranties vary in length from 1-5+ years.

 

Repair Process

Warranty repairs are handled by authorized dealers. Make sure you understand the claims process and repair authorization procedures to avoid any hassles. Keep all service records as proof of maintenance.

 

Where to Find Used Rental Car Inventory for Sale

There are a few main places to find a selection of used rental cars for sale in Canada:

 

  • Major Rental Companies: Most big rental brands like Hertz, Enterprise, Avis, Budget, etc. have their own used car sales programs. You can search their websites directly to find inventory. Hertz and Enterprise tend to have the largest selection available.
  • Online Auction Sites: Websites like Copart allow you to bid on used rental cars, including some late model vehicles. They get inventory directly from major rental fleets. You’ll need to inspect thoroughly before buying.
  • Local Dealerships: Many independent and franchise car dealerships also buy used fleet vehicles at auctions or from rental companies to resell on their lots. Check dealer websites or visit in-person to see their rental car inventory.

 

Buying directly from a rental company can provide the best selection and ability to review maintenance records. Online auctions offer more diverse inventory. Local dealers may add fees but allow you to test drive easily.

 

Checking the History and Condition of a Used Rental Car

Getting a vehicle history report is crucial when buying a used rental car. These reports, available from companies like Carfax and AutoCheck, provide important information on a vehicle’s past including:

 

  • Accidents – Any reported accidents or damage can significantly impact value and reliability.
  • Ownership – More owners may indicate issues down the road.
  • Service records – Gaps in service history could hide larger problems.
  • Rental usage – High mileage rentals tend to have more wear and tear.
  • Title issues – Branded, salvage, or junk titles indicate major damage.
  • Open recalls – Unfixed recalls should be addressed before purchase.

 

In addition to vehicle history, thoroughly inspect the car yourself before purchase. Look for issues like paint overspray, mismatched panels, scratches, dents, cracked glass, worn tires and brakes, stains or damage to upholstery, corroded battery terminals, leaks, rusted components, and abnormal engine or transmission noises. Test all features and electronics. Hidden problems can be expensive down the road.

Also be sure to understand the warranty coverage. Many used rental cars come with limited powertrain warranties, but these may not cover wear items or everything that could potentially fail. Extended warranties can provide extra protection but cost extra.

 

Inspecting the Condition of a Used Rental Car

When buying a used rental car, it’s important to thoroughly inspect its condition before making a purchase. Here are some tips on what to look for:

 

Test Drive Checklist

Take the rental car for an extensive test drive before deciding to buy. Pay attention to:

 

  • Engine performance – Does the engine rev smoothly? Any unusual noises or vibrations?
  • Transmission – Do the gears shift smoothly? Any slipping or hesitation?
  • Brakes – Any noises, vibration or pulling when braking?
  • Steering – Does it turn smoothly without any play?
  • Suspension – Any bouncing, leaning or bottoming out on bumps?
  • Electrical – Do all lights, gauges, buttons and features work?

 

Check for Common Problems

Inspect both the interior and exterior for typical used car issues:

 

  • Worn tires, brakes or belts
  • Dents, dings, scratches on the exterior
  • Torn seats, stains on carpets and upholstery
  • Chipped or scratched windows
  • Rust spots or paint damage
  • Leaks under the car

 

Get a Mechanic’s Opinion

For extra peace of mind, have a trusted mechanic do a pre-purchase inspection. They can spot any issues you may have missed and give an estimate for repairs. This will help determine if the rental car is fairly priced or needs negotiation on the sale price.

 

Understanding Warranties

When buying a used rental car, it’s important to understand the warranty coverage. Used rental cars typically come with some type of limited warranty from the manufacturer or rental company.

Pay close attention to the policy limitations. Most used rental car warranties are limited in terms of time and mileage from when the vehicle was first put into rental service. For example, it may only cover the powertrain for 12 months or 12,000 miles from the in-service date.

The warranty should specify exactly which parts and labor are covered. Common inclusions are the engine, transmission, drive axle, steering, brakes, electrical components, etc. Make sure you know what’s covered before purchasing.

You may also have the option to purchase an extended warranty for additional peace of mind. This can provide longer coverage for certain components beyond the original warranty period. Shop around and compare extended warranty options to find the best value based on your intended ownership period.

Getting a vehicle service contract from the dealer or third party provider allows you to extend key warranty protections for 1-3 additional years. This gives you more coverage as the vehicle ages.

 

Financing Considerations for Used Rental Cars

When financing a used rental car purchase in Canada, there are a few key financing considerations to keep in mind:

 

Loan Terms and Rates

Used car loan terms from dealerships typically range from 24 to 72 months for rental cars. The interest rate you qualify for will depend on your credit score and down payment amount. Rates for used rental cars tend to be slightly higher than new cars, averaging around 5-7% for buyers with good credit.

Shopping around with banks and credit unions beyond the dealership can help you secure a competitive used car loan rate. Online lenders also offer financing options. Compare all loan terms and APRs before deciding.

 

Down Payment Required

Used rental car dealers often require a higher down payment than conventional used cars. You may need around 10-20% down compared to 5-10% for other used vehicles. With a larger down payment, you can reduce the amount financed and potentially qualify for a lower interest rate.

Calculate the down payment needed to get your target monthly payment on a used rental car loan. A higher down payment gives you more equity in the vehicle from the start.

 

Credit Score Impact

Your credit score has a significant impact on used rental car loan approval and interest rates. Lenders view scores above 720 as excellent credit and under 620 as poor. The higher your score, the better loan terms you can qualify for.

Check your credit reports from Equifax and TransUnion before applying. Correct any errors that could be dragging down your score. Pay down other debts and avoid new credit applications in the months preceding your used rental car purchase to maximize your score.

 

Insurance Costs

When purchasing a used rental car in Canada, it’s important to understand how insurance costs can differ from other used vehicles. Here are some key factors that can affect your insurance premiums when insuring a used rental:

 

  • Higher risk – Insurance companies may view rental cars as more likely to have wear and tear issues, leading to higher premiums.
  • Unknown history – Not having a full picture of how the car was driven and maintained previously can raise rates.
  • Frequent drivers – Since rental cars have many different drivers, insurers may charge more as they can’t assess individual risk as clearly.
  • Business use – Rental cars are driven for business purposes which may mean higher mileage and more claims risk.

 

However, there are also ways you may be able to save on insurance for a used rental car:

 

  • Prior rental discounts – Some insurers offer a discount if you previously insured a rental car.
  • Multi-policy discounts – Bundling your rental car policy with other policies like home or life insurance can lower premiums.
  • Usage-based insurance – Telematics programs that track actual driving can help demonstrate lower risk use.
  • Gap insurance waiver – Since used cars depreciate slower, you may not need gap insurance.

 

Being informed on both the potential extra costs as well as savings opportunities can help you make the best insurance decisions when buying a used rental car.

 

Importing Used Rental Cars from the US

Importing a used rental car from the United States into Canada involves jumping through some regulatory hoops but can provide access to a wider selection of inventory. Here’s what you need to know about the process:

 

Regulations and Paperwork

To import a used vehicle from the US, you’ll need to have the proper ownership documentation from the seller, including the title certificate. The car will also need to meet Canadian safety and emissions standards. An independent mechanic approved by Transport Canada can inspect and certify the vehicle before import. You’ll need this paperwork when registering the car in Canada.

 

Duties and Taxes

Importing a used car from the US means paying applicable federal and provincial taxes. This includes the GST/HST and any provincial sales tax. Duty rates can range from 0% for vehicles manufactured in the US, Mexico, or Canada under NAFTA to 6.1% for other foreign-made vehicles. These taxes and duties are payable when you register the imported used car.

 

Currency Conversion

When buying a used rental car in the US, keep the exchange rate in mind. The seller will typically quote the price in USD. Make sure to factor in the currency conversion to CAD along with border fees when determining if the US car is a good value compared to domestic options.

 

Registering and Titling a Used Rental Car in Canada

When purchasing a used rental car in Canada, there are some important steps to take for registering and titling the vehicle based on the province where it will be driven.

In Ontario, you’ll need to register the used rental within six days of becoming the owner. To register, you’ll need to complete and submit an Used Vehicle Information Package along with applicable fees. This includes the Vehicle Transfer form signed by the previous owner, Safety Standards Certificate, and proof of insurance. Registration fees in Ontario are $59 plus 13% tax.

In British Columbia, you have 10 days from the date of sale to register the used rental car. Required documents include the transfer/tax form signed by the seller, proof of insurance, and inspection certificate if the vehicle is more than 8 years old. Fees for registration are $100 in BC.

In Alberta, registration must be completed within 3 days of becoming the owner. You’ll need the bill of sale, vehicle inspection report, proof of insurance and applicable registration fees. These fees start at $82 in Alberta.

The timeframe and fees for registering a used rental car vary by province. Be sure to look up the specific requirements for the province where you’ll be driving the vehicle. Most provinces charge additional tax on top of the registration fees. Failing to properly register a used rental car in Canada can result in fines or penalties.

 

Negotiation Tips for Used Rental Cars

Getting the best possible price on a used rental car requires some negotiation strategies. Here are some tips to keep in mind:

 

Ways to Get the Best Price

Do your research ahead of time on pricing for the specific make, model, year, and mileage of the vehicle you want. This gives you a target price to aim for.

Mention any competitive vehicles you’ve seen at other dealerships and what pricing you were quoted. This shows you’ve done your homework.

Point out any defects, dings, worn parts etc. to ask for a lower price. Be reasonable but don’t be afraid to negotiate.

Offer to pay in cash if possible – this can give you more leverage in bargaining since the dealer won’t have to worry about financing.

Buy at the very end of a month or quarter if you can – salespeople have quotas and are more motivated to deal.

Have your own financing lined up beforehand if you need a loan. That way you’re not at the mercy of the dealer’s rates.

 

Extras to Ask For

See if winter tires are included if buying during colder months – these can be expensive to buy separately.

Request a full set of floor mats, roof racks, or other accessories to sweeten the deal at no added cost.

Ask them to cover any minor repairs like new wipers, fixing scratches, replacing filters etc.

See if they’ll throw in a tank of gas, oil change, wheel alignment etc. before you take delivery.

Negotiate an extended warranty to give you peace of mind down the road.

 

When to Walk Away

If you’ve negotiated fairly but the dealer won’t come down to a reasonable price, be ready to walk away. They may call you back with a better offer.

Don’t let sales tactics or time pressure force you into a deal you’re not comfortable with. Buying a car is a big decision.

Trust your instincts – if something seems off about the vehicle’s history or condition, it may be best to keep looking.

Set a maximum budget for yourself and stick to it no matter what. Don’t get sucked into payments you can’t afford.

If you can’t get the extras you wanted or the dealer pushes unwanted add-ons, be willing to end negotiations and find another car.

 

Conclusion

In summary, buying a used rental car in Canada can be a great way to find a quality vehicle at a lower price point. Rental cars tend to be well-maintained, have lower miles, and newer model years compared to other used vehicles. Major rental companies like Hertz, Enterprise, Budget, Avis, and more sell off their fleet vehicles to dealerships or directly to consumers through online auctions and websites.

When buying a used rental car, be sure to get a vehicle history report, inspect the car thoroughly, understand any remaining warranty coverage, and negotiate the best possible price. Consider loan terms, insurance costs, and any additional fees for importing or registering the vehicle.

The best deals on used rental cars in Canada can be found through rental company direct sales, certified pre-owned programs, and online auction sites. With some smart shopping, you can find a great used rental car at an affordable price. Just be diligent about checking the history and condition before purchasing.

 

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Questions About Buying Used Rental Cars in Canada

Used rental cars in Canada can be purchased from several reputable dealers including Hertz Car Sales, Enterprise Car Sales, Advantage Car Rentals, and Avis Car Sales. These companies buy back rental cars from their fleets and sell them to consumers often at very competitive prices. Rental cars tend to be well-maintained and have lower mileage than comparable used cars.



Some key advantages of buying an ex-rental car in Canada include:

 

– Well-maintained vehicles – Rental cars must adhere to strict maintenance schedules to stay in service

– Lower mileage – Rental cars are typically driven less than privately owned vehicles

– Newer models – Rental companies regularly update their fleets with newer vehicles

– Competitive pricing – Ex-rentals are often thousands less than comparable non-rental used cars

– Warranty coverage – Many ex-rental cars still have original factory warranty remaining



The best places to find used rental cars for sale in Toronto are:

 

– Advantage Car Rentals – Large selection of late model used rental cars at their Toronto dealership

– Avis Car Sales – Offer off-lease Avis rental cars for sale in Toronto often under 40,000 km

– Hertz Car Sales – Hertz operates five used car dealerships in the Greater Toronto Area

– Enterprise Car Sales – National network with affordable pricing and haggle-free sales experience

– AutoTrader.ca – Search dealer listings of ex-rentals cars for sale in Toronto

The major rental car companies that sell off their used fleet vehicles in Canada include:

 

– Hertz – Operates 75+ used car dealerships across Canada and the US

– Enterprise – One of the largest used car sellers with locations across Canada

– Avis – Avis Car Sales handles used Avis rental vehicle sales in Canada

– Budget – Sister brand of Avis that sells former rentals under Avis Car Sales

– Alamo – Used rental Alamos are sold via Enterprise Car Sales dealerships



Most rental car companies offer some type of warranty on their used fleet vehicles sold in Canada. For example:

 

– Hertz – Provides limited powertrain warranty on their Hertz Certified used cars

– Enterprise – Offers 12-month/20,000 km limited powertrain warranty

– Avis – Typically provides minimum 3-month/5,000 km limited warranty

– Budget – Sold via Avis so comes with Avis limited warranty protection

 

It’s important to confirm exact warranty details when purchasing a used ex-rental vehicle.



The basic steps are:

 

  1. Research models, pricing and dealers online
  2. Check out vehicle history reports if provided
  3. Test drive your top choice vehicles
  4. Have an independent mechanic inspect before purchase
  5. Negotiate best price and close the sale
  6. Review warranty, return policies and paperwork
  7. Register the used car and transfer title

 

Take your time researching to find the right used rental car at the fairest price.

The best places to buy a used rental car with no haggle, set pricing in Canada are:

 

– Enterprise Car Sales – Advertises haggle-free used car buying experience

– Hertz Car Sales – Lists set, no-negotiation used car pricing online

– Avis Car Sales – Doesn’t allow negotiating on used rental car pricing

– CarGurus – New online retailer selling off-lease cars at fixed prices

 

These dealerships stand behind their transparent, hassle-free used car prices.

When test driving a used rental car, closely inspect:

 

– Engine noise and performance

– Transmission shifting smoothness

– Brake feel and stopping ability

– Steering wheel vibrations and handling

– Check all accessories and electronics

– Look for interior wear and tear signs

– Confirm maintenance records if possible

 

Pay attention to anything that seems faulty or concerning.

Used car dealers source ex-rental cars to sell from:

 

– Manufacturer off-lease vehicle auctions

– Bulk purchases from rental companies

– Online wholesale auctions like Copart

– Trade-ins from consumers

– Direct inventory transfers between dealerships

 

Having ex-rental cars on their lots allows dealers to offer competitively priced used car inventory.

Key questions to ask are:

 

– How many previous renters did the car have?

– What is the total mileage and average annual mileage?

– Has it been in any accidents or needed major repairs?

– What maintenance has been performed and are records available?

– Is there any original factory warranty remaining?

– Do you provide a dealer warranty if not? For how long?

 

Get as much history as possible before purchasing a used rental.

Daily rental cars may have had more drivers and wear than longer term rentals. However, daily rental fleets are still typically well-maintained. Things to consider:

 

– Ask for a vehicle history report if possible

– Take any daily rental on an extended test drive

– Have a mechanic do a thorough inspection first

– Negotiate a lower price compared to a longer term rental

– Purchase added warranty protection for extra coverage

 

If everything checks out, a former daily rental can still be a good value.

Pros of buying an ex-rental car include:

 

– Lower purchase price – 20-40% discounts are common

– Good condition – Strict maintenance schedules

– Lower miles – Average of 20-35k miles per year

– Newer models – Up-to-date rental fleets

– Warranties – Many have at least some coverage left

– Savings – Thousands below normal used car prices

 

Well maintained rentals make affordable, reliable used vehicles.

Potential downsides are:

 

– Multiple drivers – More wear and tear

– Undisclosed damage – Minor scrapes or interior flaws

– Unknown treatment – Some renters are rougher on cars

– Lack of records – Patchy maintenance history

– Out of province – Importing across provincial lines

– No negotiating – Set “no haggle” ex-rental pricing

 

Do thorough test drives and inspections to avoid issues.

Used rental cars are often cheaper to insure because:

 

– Original warranty lowers premiums

– Comprehensive dealer servicing history

– OEM replacement parts used for repairs

– Lower average mileage than normal used cars

 

However, rates ultimately depend most on:

 

– Model, age, market value of car

– Your personal driving and claims record

– Coverage types and deductible selected

 

Get quotes from several insurers to find the best rate.

Major online auction sites selling off former rental cars in Canada include:

 

– Adesa Public Auctions – ADESA.ca

– Manheim Auctions – Manheim.ca

– CarGurus IMMO Auctions – auctions.cargurus.com

– Copart Public Auctions – Copart.ca – Salvage & clean rental vehicles

 

Dealers source substantial rental car inventory from these wholesale auctions.



The top rental car brands for good used purchases in Canada are:

 

– Toyota – Reliable with high resale values

– Honda – Well built cars with loyal owners

– Nissan – Solid brand with good used selection

– Ford – Canadian brand with affordable fleet vehicles

– Chevrolet – Spacious models with parts commonality

– Hyundai – Feature-packed vehicles with long warranties

 

Each brand offers well maintained fleet vehicles.

Some ex-rental dealers advertise transparent “no haggle” pricing policies. However, negotiation is still often possible:

 

– Ask for discounts for paying in cash

– Bundle in extra warranty or service packages

– Target end of model year vehicles

– Offer to take less desirable colors/options

– Purchase near month/quarterly sales goals

 

Do your research and make reasonable counteroffers.

To check a rental car’s accident history:

 

– Ask the seller to provide vehicle history reports

– Carfax and CarProof both outline accident reports

– Review records for any body repairs done

– Carefully inspect the exterior and undercarriage yourself

– Consider having a mechanic do an inspection as well

 

Accident-free rentals make the safest pre-owned purchases.



Most dealers provide limited return policies, such as:

 

– 24-72 hour test drives or money-back guarantees

– 30 day exchange policies for comparable vehicles

– Bad mechanical inspection refunds within 7 days

 

However, used vehicles are generally sold “as-is” in Canada. Review return policies before purchasing from rental fleets.

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