What is the best place to buy used cars?

Automotive

Traditional, Online, or Rental Car Companies: Where to Find the Best Deals

(MARK RALSTON/AFP via Getty Images)

  • Rental car companies provide more savings than other retailers to buy a used car, with an average of 1.6 percent savings or $303 according to iSeeCars analysis of over 8.5 million vehicles
  • Savings at rental car companies are on average $334 greater than at traditional local dealerships, $747 greater than online dealerships
  • Traditional local dealerships provide over $400 in savings compared to online dealerships
  • While deals aren’t as significant at traditional local dealerships or online dealerships, savings can still be found

Used car prices have risen in 2020 due to increased demand and limited inventory as a result of the COVID-19 pandemic. With used car prices up and multiple sources to buy a used car from, car buying consumers should examine all their options when trying to save money and find the best deal on a used vehicle. 

“As contact-free online dealers have gained popularity as a safe alternative to traditional dealerships, and as struggling car rental companies unload their inventory, consumers might be considering these alternatives to traditional brick and mortar dealerships,” said iSeeCars Executive Analyst Karl Brauer. “It’s important that used car shoppers compare prices across these types of dealers if they want to get the best deal possible on a used car.”

Car search engine iSeeCars.com analyzed over 8.5 million used car sales across the three dealer types of traditional local dealerships, virtual dealerships, and rental car companies and found that rental car dealers consistently provide the greatest savings, while local dealerships are priced close to market value and virtual dealerships are priced above market value.  

Best Places to Buy a Used Car

Dealer TypeAvg Price to Market Value ($)Avg Price to Market Value (%)
Rental Car Dealers (Hertz, etc.) -$303-1.6%
Traditional Local Dealerships+$31+0.2%
Online Dealerships (Carvana, etc.)+$444+2.4%

On average, rental car dealers provide the biggest savings, with cars priced 1.6 percent or $303 below the market value of a used car . “Because rental car companies buy their cars at a high volume and at a discounted rate, they’re able to sell these vehicles for less to consumers, and they price the vehicles to sell in order to move their inventory quickly,” said Brauer. “Additionally, rental car companies are also more likely to discount their vehicles given the financial hardships they are facing from the COVID-19 pandemic.”

Best Places to Buy Popular Vehicles

iSeeCars analyzed used car transactions among the top 25 best selling vehicles to determine the average savings at each major dealership type (listed alphabetically).

Popular VehicleRentalVirtualLocalPlace with the Best Pricing
Chevrolet Equinox-3.1%-2.7%-0.4%Rental
Chevrolet Silverado 1500-6.6%+2.5%+0.3%Rental
Ford Escape-2.8%-4.3%-0.4%Virtual
Ford Explorer-3.8%+0.5%-0.4%Rental
Ford F-1500.0%+2.3%+0.8%Rental
Ford Fusion+1.0%+1.9%+0.3%Local
GMC Sierra 15000.0%-0.1%Local
Honda Accord+5.8%+0.4%Local
Honda Civic-6.3%+6.5%+0.4%Rental
Honda CR-V+4.0%+0.6%Local
Hyundai Tucson+1.2%+0.6%+0.9%Virtual
Jeep Grand Cherokee-3.4%-0.2%-0.6%Rental
Jeep Wrangler+2.5%+0.8%Local
Mazda CX-5+0.1%+0.5%-0.9%Local
Nissan Altima-6.2%+5.9%%+1.4%Rental
Nissan Rogue-1.9%+0.5%+0.5%Rental
Ram Pickup 1500+0.8%+2.7%+1.1%Rental
Subaru Forester+3.9%-1.8%Local
Subaru Outback+1.0%-1.9%Local
Toyota 4Runner+0.5%+2.9%+1.2%Rental
Toyota Camry-0.2%+3.6%+1.4%Rental
Toyota Corolla+2.0%+6.2%+0.9%Local
Toyota Highlander-0.8%+2.2%-0.2%Rental
Toyota RAV4-0.5%+1.5%+0.6%Rental
Toyota Tacoma+3.7%+7.1%+2.3%Local

Of the 25 most popular vehicles, 13 have the greatest savings at rental car agencies. “Over 98 percent of used car inventory at rental car companies is three-years-old or newer, so these deals will only apply to shoppers looking for newer model year versions of these vehicles,” said Brauer.

Six vehicles on the list are not commonly offered by rental car agencies including the GMC Sierra 1500, the Honda Accord, the Honda CR-V, the Jeep Wrangler, the Subaru Forester, and the Subaru Outback. “These vehicles are still sold at rental car companies, but the frequency and choice will be limited,” said Brauer. 

Six vehicles commonly found across all three retailers stand out as not having the most significant savings at a rental agency. “The Ford Escape has the most savings virtually, and the Ford Fusion and Hyundai Tucson are priced above market value at all three dealership types but have the smallest increase at local dealerships,” said Brauer. “On average, traditional local dealerships are where consumers are most likely to find deals on the Mazda CX-5, while the Toyota Corolla and the Toyota Tacoma have the lowest increases above market value.” 

Best Popular Cars to Buy at Rental Agencies

iSeeCars examined which popular vehicles have savings greater than average at rental car companies and determined the average price discount for each vehicle. These are the popular vehicles that have the greatest discounts when purchased at a rental car company.

RankVehicle% Savings$ Savings
1Chevrolet Silverado 15006.6%$2,016
2Honda Civic6.3%$1,006
3Nissan Altima6.2%$870
4Ford Explorer3.8%$1,106
5Jeep Grand Cherokee3.4%$1,021
6Chevrolet Equinox3.1%$593
7Ford Escape2.8%$523
8Nissan Rogue1.9%$315

The vehicle that has the greatest savings is the Chevrolet Silverado 1500 pickup truck, which has a 6.6 percent savings amounting to $2,016. “With truck demand particularly high over the last several months it can be tough to find a good deal. Consumers looking for a late-model, full-size used truck should consider local rental car sales inventory,” said Brauer.

Two popular sedans, the Honda Civic and the Nissan Altima also offer significant savings when consumers purchase through a rental car dealer. “Despite sedans’ overall decline in market share, these models have remained popular rental options, and consumers can save money on these vehicles through a rental car dealer,” said Brauer.

There are other benefits beyond savings opportunities to buying a used rental car. “Rental cars follow routine maintenance schedules and are routinely inspected for cosmetic damage,” said Brauer.  “All Hertz and Enterprise vehicles undergo a rigorous inspection process from certified mechanics and come with a 12-month/12,000 mile limited powertrain warranty.”

But despite the savings, there are limitations to buying from a rental car company. “Rental cars typically have higher mileage and more wear and tear because they have had many drivers who may not be as careful with the vehicle as they would be with their own car,” said Brauer. “Rental companies also typically buy the base model of a vehicle, so consumers who want higher trim levels may have difficulty finding the specific version they want.”

Best Popular Cars to Buy at Online Dealers

While the average used car is priced 2.4 percent above market value at online dealerships , three popular vehicles sold online offer discounts below market value. For those who want to avoid dealerships and car salespeople, These are the popular vehicles that have the greatest average savings when purchased at an online car dealership.

RankVehicle% Savings$ Savings
1Ford Escape4.3%$684
2Chevrolet Equinox2.7%$440
3Jeep Grand Cherokee0.2%$37

“The savings at online dealerships are generally not as significant as at rental car companies, but consumers should consider online dealers if they want a slightly older vehicle with relatively low mileage, or if there isn’t a rental car sales company in their area,” said Brauer. “Additionally, online dealerships typically sell off-lease, one-owner cars, and Carvana and VROOM only sell vehicles with clean vehicle histories that haven’t been in an accident.”

Along with providing a convenient and hassle-free car buying experience by delivering a vehicle right to a shopper’s door, online dealers rigorously inspect their vehicles and offer free protection plans similar to what is offered on certified pre-owned (CPO) vehicles. “If a consumer isn’t satisfied with their vehicle, they have a five-to-seven day return window to help ease anxiety about not being able to test drive the vehicle prior to purchase,” said Brauer.  

Buying from an online dealership also presents its challenges. “Buying a vehicle from an online dealer doesn’t allow you to do a traditional test drive and the dealers use no-haggle pricing, with no negotiation room for car buyers,” said Brauer.

Best Popular Cars to Buy at Local Dealers

iSeeCars also looked at the sale of popular vehicles at traditional local dealerships . While the average used car is essentially equal to (0.2 percent above) market price at these dealerships , 10 popular vehicles sold locally offer savings below market value. These are the popular vehicles that provide the greatest savings when purchased from a traditional local dealer.

RankVehicle% Savings$ Savings
1Subaru Outback1.9%$387
2Subaru Forester1.8%$321
3Mazda CX-50.9%$186
4Jeep Grand Cherokee0.6%$140
5Honda CR-V0.6%$95
6Ford Escape0.4%$63
7Chevrolet Equinox0.4%$72
8Ford Explorer0.4%$84
9Toyota Highlander0.2%$54
10GMC Sierra 15000.1%$35

 “Traditional dealerships have more inventory than online dealerships and car rental agencies. Shoppers looking for a specific vehicle in a certain color or trim within their price range will find more variety at these traditional used car lots ,” said Brauer. “Additionally, traditional dealerships devote more of their inventory to older vehicles, making them the best option for consumers seeking vehicles more than five years old.”

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories

Rochester Rundown
What's Good with Dan Gross
Songs From Studio B
Download Our App

Don't Miss