I don’t know if you’ll think this is a frugal idea or not but I do. IMO, being frugal isn’t just about making DIY products or being uber-cheap, it’s also about getting the best deal on things you need. In this case, we needed a second car and I *think* I found a great way to save money… at least that’s what I keep telling myself. 😉
So, the story goes that a few weeks ago my wife decided that we simply MUST get a second car ASAP because our kids are now enrolled in multiple extra-curricular activities and, as much as I’d hate to admit it, we couldn’t make it work with just one vehicle any longer.
As such, we started to look for another option. The way I saw it, I had three choices:
- Buy a new vehicle from a dealer
- Buy a used vehicle from a dealer
- Buy a used vehicle from a private party
Let me first state that we hadn’t purchased a new vehicle in about 14 years. I purchased two brand new vehicles back when I started working for GM in 2000 and 2001. We kept those two vehicles going until about last year when we ended up selling both and acquiring the CRV we have now. Anyway, the point is that we like to keep our vehicles… and run them into the ground.
Now, we knew we didn’t want to purchase a brand new vehicle. I did that, twice, and though it generally worked out we were well aware that as soon as you drive them off the lot they lose a significant percentage of their value immediately. To us, that was a no-go option.
We then decided that we didn’t want to spend much money on a vehicle and opted for purchasing a very inexpensive used car. Regrettably, we visited the ubiquitous used car dealership and I was not pleased with either the selection or the sales pitch.
Long story short, every vehicle I looked at was either a complete hunk of junk that I wouldn’t have trusted to get me back home directly from the dealership and/or it was way overpriced according to a fair Kelley Blue Book price… to the tune of thousands of dollars and the more expensive the vehicle was priced on the lot the worse it got. Yes, I looked up every vehicle I considered on the spot.
Worse yet, we got the typical salesmen, telling me everything he thought I wanted to hear to sell me a car. I wasn’t happy and we never went back. I felt like I was getting screwed.
The used car dealership option wasn’t look good either. What to do?
About the only option left was to go private party. Honestly, I probably should have done this to begin with but, as with dealerships, I didn’t really want somebody else’s problem and so I was hesitant. Eventually, I decided to “shop around” on places like Craigslist.org and AutoTrader.com but I wasn’t “feeling the love” there either. Things were just too damn expensive, at least in relation to the Kelley Blue Book price which is my go-to pricing guide.
Again, I was at a loss here. Then I remembered what this guy told me when I rented a car earlier this year, specifically that they sell their vehicles after only a year or so of use and often at less than Kelley Blue Book prices. At the time I’d dismissed the comment because I’d assumed that we would never consider a used rental car. Let’s face it, they have a stigma of being abused, am I right?
I thought about it and, more importantly, looked into it and eventually decided that purchasing a used rental car may well be the best option of them all. Like I said, I’d never thought of this as being a viable option until I started looking into the possibility.
Simply Google “buy rental car” and you’ll find these options:
…among other ones. Long story short, I ruled out two of the above because they didn’t have car sales in our state or, at least, nearby where we live. I wound up going to Hertz but you should check out the other options if they have sales dealers nearby you.
What I particularly liked about Hertz–I think Enterprise does it too–was that they showed the original price, Kelley Blue Book price, their vehicle price, and the difference in price which often amounts to a thousand dollars or more per vehicle. As I was skeptical of their numbers I checked on a handful of different vehicles directly on kbb.com and their numbers were VERY close; so close I choose to trust their numbers for everything else I looked at.
Longer story even shorter, we wound up with a vehicle that was about a thousand dollars less (or more) than suggested KBB price when purchasing from a dealer. I should note that there can be a significant difference in suggested pricing between a dealer’s price and private party as listed on KBB.com. The rental car dealer numbers were more in line with private party values. You might then say “why not just buy from a private party to start with?” The trouble, unfortunately, is finding a private party to purchase from.
IF you can find a private party to purchase from then it may be the BEST option to buy directly from somebody who is NOT a dealer no matter whether they’re the ubiquitous used car dealer, new car dealer, or rental car dealer. Like I said, finding a private party who has the vehicle you want may be difficult to do. Worse, purchasing from either a new car dealer OR a typical used car lot and you’re asking to pay significantly more than you should.
I felt the rental car purchasing option was the best of both worlds: being able to find a vehicle we wanted (and that fit our budget) AND not paying through the nose, if you will. Granted, they did try to sell us on an extended warranty which I should have expected but otherwise it was no trouble at all.
What about the stigma of buying rental cars?
Personally, I don’t think people treat them any worse than a normal person would treat their own vehicle. It’s really a crap-shoot most of the time when buying a used car anyway, if you ask me. Sure, a mechanic can generally look it over to ensure it’s not an obvious nightmare of a vehicle but they won’t break the engine or transmission down to assess unseen internal wear and tear.
Ultimately, what I wanted was a FAIR deal no matter who we purchased from. And, of course, it’s up to you what you’re willing to put up with. If you’re the haggling type and willing to spend hours working on a used-car salesman to get a rock-bottom price then that might be a good option. The same can be said for new car dealers to a point. As for us, buying a used rental car seems to be a good choice thus far. We had plenty of options to choose from and I didn’t feel like we were getting a bad deal.
What about you? Have you had any experience buying from a rental agency? I’d be interested to hear about it if you have…
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