We've seen headlines for weeks about Hertz selling off its fleet after filing for Chapter 11 bankruptcy. In reality, it isn't just Hertz and it didn't just start.
“You should not expect, or the market should not expect, all of a sudden this influx of rental supply to hit the market because rental companies have been right sizing their fleets since at least mid-March,” said Larry Dixon, Senior Director of Valuation Services at J.D. Power.
As COVID-19 forces car rentals and auctions to shut down, the rental companies started selling more to dealers who weren't able to replenish their used car supply. Now that auctions have opened, demand is up and so are auction prices.
So far for retail, what we pay is stable. At the same time, new car sales are down. So, there are fewer trade-ins. That means better deals.
“Dealers are going to be more likely to be more aggressive with a trade-in offer to a consumer, particularly for highly desirable late model vehicles, think that 2 to 5-year-old used vehicle,” said Dixon.
As far as rental cars being a good buy, they are well-maintained and kept clean. The negatives are they have higher miles. But that can also be a positive in the price.
A dealer doesn't have to disclose if a car was a rental. You can find out on your own with a vehicle history report.
