What is the deal with rental companies using new cars for 6 months?

OTK · 03-07-2008 3:40pm #1

How does this work? Do rental companies buy new cars and then give them back to the dealers 6 months later to be resold as demo models?

what is the logic behind this?

Is it to get people using new models of cars that they moght then purchase after renting?

is it something to do with tax? Do these rental cars ever pass in ownership to the rental company or do they appear to be new cars with no previous owner when a punter buys one?

Why would the rental companies not keep them for a 2-3 years given that depreciation is highest at the start of a cars life?

i hear that a lot of rental cars come back to dealers in the autumn. Is this because the rental business in Ireland is seasonal and they don't need them in the winter???

2 Espressi · 03-07-2008 3:45pm

Rental Co.s usually buy at a reduced trade rate, with an agreed buyback price.
They are generally base spec (apart from the auto boxes) small hatches and the like, usually models that aren't selling so well, hence the abundance of Tiidas seen around Shannon...
It's usually cheaper to sell at the end of the season rather than having them sit idle over the winter. Plus, it looks better to have a fleet of new cars, rather than 2 or 3 year olds on the books.

alias no.9 · 03-07-2008 4:27pm

There are also VRT exemptions for rental cars, or certainly there used ot be under the old system.

niceirishfella · 03-07-2008 4:53pm

A lot of car rental co's alos own car dealerships and offload them there when they are finished with them on hire.

A word from the wise; NEVER BUY AN EX-RENTAL.
I worked that industry - trust me.

Steve · 03-07-2008 6:10pm

niceirishfella wrote: »

A word from the wise; NEVER BUY AN EX-RENTAL.
I worked that industry - trust me.

+1
I rented them

niceirishfella · 03-07-2008 7:10pm

stevec wrote: »

+1
I rented them

LOL:D:)

Gary ITR · 03-07-2008 7:13pm

stevec wrote: »

+1
I rented them

Ha Ha.. me too, drive it like you stole it!!

10-10-20 · 03-07-2008 7:56pm

Isn't it "Drive it like ya hired it!"?

Well, it is for the Le Mans 24hr anyway...

Our man in Havana · 03-07-2008 8:16pm

They generally keep them for 6 months or 16000km which ever comes first.

ianobrien · 04-07-2008 11:35am

stevec wrote: »

+1
I rented them

It's another +1 from me....

The phrase "Rent a wreck" comes to mind......

(How did I manage to bend the gear linkage?! Oh well, get the lump hammer & we'll straighten it, and say nothing)

Marcus.Aurelius · 04-07-2008 11:39am

I've seen hundreds of rental cars around tourist spots I worked at in the summer months, Americans revving cars, burning clutches, recking gearboxes. I wouldn't touch them!

Tails142 · 04-07-2008 11:44am

ianobrien wrote: »

The phrase "Rent a wreck" comes to mind......

That's not a phrase - was in Norway recently and saw that it on a few buildings, I think its the name of a car hire company over there!! :pac:

crosstownk · 04-07-2008 8:20pm

Rental companies adjust their fleet depending on the tourist season. Some cars are bought outright, some are leased for a year or two.

The six month cars are usually taken on board in the form of a short term lease from a dealer to supply the extra demand for the tourist season when demand for rentals is much higher. These cars are returned to the dealer who sells them on to the public. Hence, in September, you will hear a variety of advertisements for dealers selling used 2008 cars. Most people who buy these cars will have absolutely no idea that they were previously rental cars - they may only be aware that they were one owner cars.

niceirishfella wrote:

NEVER BUY AN EX-RENTAL

.

Some truth in that, but it shouldn't be attributed to all ex rentals. Most renters don't abuse the cars. Quite often buying an ex rental can be a good bargain. Having worked for one of the country's largest rental companies, I've passed many an ex-rental on to friends resulting in substantial savings for them - not one has ever had a problem due to abuse. That said, you do need to be on the look out for the odd one that is abused.

One thing to look out for when buying an ex-rental (apart form the obvious signs of poor bodywork repair) is the one that has substantially lower mileage than others on the forecourt. Most ex-rentals will have, on average, similar mileage. But the one that has quite a few thousand kms less than the rest could well have been sitting up for while - always a bad sign - hire companies don't buy cars to have them sitting around.

I wouldn't discourage anybody from buying an ex-rental, but I would advise to have it looked at by someone who knows their stuff - just in case you get the bogey one.

What is the deal with rental companies using new cars for 6 months?

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