Buying a car is the second-most expensive purchase that many of us make in our lives. So it makes sense that money-conscious people want to save money on their vehicles, whether that’s through negotiation tactics at a dealership or buying a rental car.
Some tips, such as doing your homework to understand the going rate for the make and model you want before heading to a dealership, are useful. Other would-be bargains done with the intention of saving more and spending less can leave you regretful.
Is it a good idea to go bargain-hunting for a vehicle? And more specifically, should you buy a rental car?
Where does buying a vehicle from a rental car company fall within that spectrum?
That's what a listener of the Clark Howard Podcast recently asked.
Does Clark Endorse Buying Cars From Rental Car Companies?
A listener wanted Clark’s take on the topic on the March 6 podcast episode.
Asked Wiggins in Texas: “I read your [2020] article on the pros and cons of buying a rental vehicle. Since conditions have changed since then, I was wondering what advice you have now.”
Logically, drivers take better care of cars that they own than of cars they rent for a few days. Perhaps rental cars illicit more of a lead foot on the gas pedal or more wear on the tires by carrying speed through turns.
Plus, a rental car company trying to maximize its profits may stretch out and minimize car maintenance more than the average vehicle owner.
Most people are wary of buying a vehicle that’s been in a car accident. Should we also be cautious about cars that have been part of a rental car fleet? Does Clark think that logic holds true?
How To Save Money Buying a New or Used Car
Supply chain and inventory issues related to COVID-19 caused a massive spike in vehicle prices. An extreme chip shortage contributed to those issues.
A lot of those issues are alleviating, Clark says, making the vehicle market more consumer-friendly. The longer you wait to buy a vehicle in the next six to 12 months, the better you'll do on the price, Clark has predicted.
“The good news for you is the used vehicle market prices have come down a whole lot from where they were. And many brands are now showing a lot more inventory of new vehicles on their lots,” Clark says.
“Throughout 2023, every single month you’re going to see the cost of used vehicles especially getting better. They’re steadily coming down on used vehicles. New vehicles will trend down as well, and time is your friend.”
Here are some other ways you can look to make a smart, efficient vehicle purchase:
- Follow Clark's maximum auto loan length rule. (Limit your auto loan to a maximum of 42 months.)
- Target a used car that's two or three years old rather than a new car.
- Pre-qualify for a car loan through a credit union if you need to finance.
- Never discuss whether you have a trade-in or if you're paying in cash until you have a price on the car you want to buy.
- Consider buying one of the 12 best vehicles for your money, one of the 11 new cars under $20,000 or one of the vehicles most likely to last 200,000 miles.
- Learn about the best time to buy a car.
Final Thoughts
Buying a rental car may seem like a money-saving opportunity. But it isn’t a great idea according to Clark.
He worries about whether cars sold from a rental fleet have been well maintained and thinks that you’re at major risk of inheriting a lemon with a lot of miles.
Instead, focus on making smart decisions on financing, the make and model of the car you buy and other strategic areas.
[ This article was originally published on Clark.com ]
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