# Used rental cars



## Longtimeago (Aug 8, 2018)

So Hertz has filed for bankruptcy protection and no doubt other car rental companies are also feeling a lot of pain right now. It got me thinking about all those cars just sitting and how likely it is that some will start being sold off.

Sure enough a quick Google turned up this article:








Want to buy a used car? Rental car companies are offering up some good deals


With travelers staying close to home and airports turned into virtual ghost towns, rental car companies have taken a huge hit during the coronavirus pandemic. On Friday Hertz, which also operates the Dollar and Thrifty agencies, declared bankruptcy. Industry experts expect the company to sell...




www.cnn.com





Then this: Hertz Car Sales | Hertz Used Cars | Hertz

Over the next few months there may well be some real deals to be had on a used rental car from all the major rental companies.

I found the cars available right now from Hertz Toronto, here:




__





Hertz Car Sales Toronto Cars For Sale - Mississauga, ON - CarGurus.ca


Search listings from Hertz Car Sales Toronto in Mississauga, ON to find the right vehicle for you. We analyze hundreds of thousands of used cars daily.




ca.cargurus.com


----------



## Mukhang pera (Feb 26, 2016)

Heck, why be pusillanimous? Time to go big or go home! Look at all those parked aircraft! I've got my eye on a gently used 787. Maybe from Cathay Pacific. I've always liked their paint jobs. I think I'll refrain from going gauche and having my name writ large on the fuselage, Trump style.


----------



## Topo (Aug 31, 2019)

One caveat is (I think) if you have a trade in, you may need to sell it yourself, which means you could be paying extra taxes.

But when the time comes that they need to open space or are in a cash crunch, the deals could be golden.


----------



## andrewf (Mar 1, 2010)

I guess if the discount were substantial enough I would consider a former daily rental. It seems the rental companies don't sell much of their cars themselves in Canada, compared to the US. You do see former daily rentals at various car dealerships though. Perhaps they just buy them at auction.


----------



## Longtimeago (Aug 8, 2018)

andrewf said:


> I guess if the discount were substantial enough I would consider a former daily rental. It seems the rental companies don't sell much of their cars themselves in Canada, compared to the US. You do see former daily rentals at various car dealerships though. Perhaps they just buy them at auction.


Well the last link I gave shows the vehicles Hertz is selling direct in Toronto andrewf. I don't see much point to buying one from a third party who buys from the rental agency at auction or whatever and then sells to you. That will no doubt just eat the difference you could get from buying directly from the rental agency.


----------



## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> Heck, why be pusillanimous? Time to go big or go home! Look at all those parked aircraft! I've got my eye on a gently used 787. Maybe from Cathay Pacific. I've always liked their paint jobs. I think I'll refrain from going gauche and having my name writ large on the fuselage, Trump style.


Yeah, but don't forget the cost of putting in your own landing strip and a large enough hanger for the 787. I think I'll stick with something that fits in my garage.


----------



## Longtimeago (Aug 8, 2018)

Topo said:


> One caveat is (I think) if you have a trade in, you may need to sell it yourself, which means you could be paying extra taxes.
> 
> But when the time comes that they need to open space or are in a cash crunch, the deals could be golden.


Huh, extra taxes? If you sell a used car yourself or trade it in, you don't pay any taxes on the sale, the buyer does.

Many people choose to sell their old vehicle themselves rather than trade-in because they can sell for a higher price than the dealer offers them on a trade-in. Trade-in values have long been a point where dealers can manipulate the numbers to make you THINK they are giving you a good price for your existing vehicle when in fact they simply give you less discount on the new vehicle to make up for it.

When buying, I've always used the approach of, 'first tell me the price you want me to pay for the new vehicle and only after that will I discuss what you will give me for my old vehicle IF I decide to trade it in.' I would never let the dealer combine both in the one negotiation.


----------



## andrewf (Mar 1, 2010)

Longtimeago said:


> Well the last link I gave shows the vehicles Hertz is selling direct in Toronto andrewf. I don't see much point to buying one from a third party who buys from the rental agency at auction or whatever and then sells to you. That will no doubt just eat the difference you could get from buying directly from the rental agency.


Rental companies are also making an additional margin on the cars they sell directly to consumer. Auction is a lot less overhead--they need to be compensated for the added bother of dealing with the public.


----------



## andrewf (Mar 1, 2010)

Longtimeago said:


> Huh, extra taxes? If you sell a used car yourself or trade it in, you don't pay any taxes on the sale, the buyer does.
> 
> Many people choose to sell their old vehicle themselves rather than trade-in because they can sell for a higher price than the dealer offers them on a trade-in. Trade-in values have long been a point where dealers can manipulate the numbers to make you THINK they are giving you a good price for your existing vehicle when in fact they simply give you less discount on the new vehicle to make up for it.
> 
> When buying, I've always used the approach of, 'first tell me the price you want me to pay for the new vehicle and only after that will I discuss what you will give me for my old vehicle IF I decide to trade it in.' I would never let the dealer combine both in the one negotiation.


In Ontario, you pay tax on the difference of the purchase price of the car you are buying less the value of the trade-in. Usually the dealer with try to capture this savings by lowballing you on the trade-in. I think the trade-in is where they make a large part of their money and they woo people by saying you can avoid paying some tax. For some reason, people will give up $2 in income to avoid paying $1 in tax. People have a bizarre disproportionate aversion to paying tax. Probably the same reason why people use expensive financial instruments to avoid probate (which is tiny).


----------



## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> Yeah, but don't forget the cost of putting in your own landing strip and a large enough hanger for the 787. I think I'll stick with something that fits in my garage.


Well, okay, I realize there are a few details to work out. Such as landing and hangar space. Of course, I could just leave it parked outside and pay someone to wash and wax it once in awhile. I'll have to learn perhaps to do my own oil changes. And how to fill it up with cheap gas at Costco.


----------



## Topo (Aug 31, 2019)

Longtimeago said:


> Huh, extra taxes? If you sell a used car yourself or trade it in, you don't pay any taxes on the sale, the buyer does.


There is a tax saving in doing a trade-in rather than selling independently. When you do a trade-in, you only pay tax (GST, PST) on the difference. That saving, i.e. (new-old)*HST, will be lost if you sell it to a third party. If your trade-in is worth 20k, that is 2.4k in savings.


----------



## Longtimeago (Aug 8, 2018)

Huh, well thanks andrewf and Topo, I didn't know you only paid tax on the difference. I can see where if you were to trade in a $20k vehicle as you suggest Topo there would be a significant tax savings. 

I guess my question would be, why are you trading in a car that is still worth $20k? Would it not make more sense economically to continue to drive and maintain that vehicle? The only time I sell a vehicle generally speaking is when it is no longer economically viable to maintain it. ie. you blow the engine on a vehicle with a value of $5k or less.

When I returned to Canada, I bought my current vehicle brand new for reasons I won't elaborate on. I would not normally buy new as I consider buying something a few years old as a far better economic decision. A car to me is simply transportation and I want to have that transportation at the lowest possible annual cost I can. I don't want to be driving a 'rust bucket', I want it to look reasonably good and be mechanically sound but beyond that, it is a cost per year proposition. 

My current 2006 vehicle has run me according to my local garage's online service records, less than $1200 per year over the last 10 years. It still looks nearly brand new inside and out. No rust, no dents, not even any real scratches in the paint. I have over 240k km. on it.

Here is a 2007 (couldn't find a 2006) that looks to be in similar condition and with lower mileage. They want $3450 for it. So how much tax would I save if I traded it in? Seems to me the discounted price on a used rental would more than offset the tax savings I would lose if I had to sell privately.




__





Used 2006 Kia Sportage for Sale Near Me (with Photos) - CarGurus.ca


Save $7,680 on a 2006 Kia Sportage near you. Search over 1,000 listings to find the best local deals. We analyze hundreds of thousands of used cars daily.




ca.cargurus.com





It's easy to take a hypothetical figure of a $20k vehicle and the resulting tax savings and hang your hat on it but that only works if you have a vehicle worth $20k in REALITY. 

The last three cars I owned before my current one were Classic Cars. I sold them for more than I paid for them. The last non-classic car I owned, I gave to a son. My current vehicle I will not be looking to sell for much and may well give it away as well. Trade-in tax savings vs. private sale will not enter into the equation at all.

So, I'm back to when I finally decide to buy another vehicle, will a used rental be likely to be available at a lower price than a dealer used vehicle? Apples to apples.


----------



## twa2w (Mar 5, 2016)

Be careful of buying a rental. From what I have heard, many are not maintained properly with regular oil changes. If a rental company is only keeping a car for 20 to 40,000 KM max, they often skimp on maintenance. The oil may get changed at half the recommended intervals and the other fluids perhaps not at all. In those short of km, there is little risk to them as they sell before problems start. I have known people in the industry who confirm they push the limits on things like this and they would never buy a rental unless it was an absolute screaming deal with very low mileage.


----------



## Longtimeago (Aug 8, 2018)

twa2w said:


> Be careful of buying a rental. From what I have heard, many are not maintained properly with regular oil changes. If a rental company is only keeping a car for 20 to 40,000 KM max, they often skimp on maintenance. The oil may get changed at half the recommended intervals and the other fluids perhaps not at all. In those short of km, there is little risk to them as they sell before problems start. I have known people in the industry who confirm they push the limits on things like this and they would never buy a rental unless it was an absolute screaming deal with very low mileage.


Buyer beware always applies with anything you buy twa2w. I could for example suggest to you that anyone who buys a new car from any of the major American car companies should beware of rust since they all seem to rust much sooner than European or Asian vehicles. I never understand why in this day and age, anyone would ever buy a Ford, Chevy, Dodge, etc. Rust buckets one and all. But your warning is fair enough I suppose.

In the end I opted to buy a used Mazda from a used car dealer as I outlined in another thread here. Got what I believe was a very good deal. During the discussions with the salesperson I got a laugh when he talked about how the vehicle I was buying had in fact been off the road for almost an entire year from when it was traded in, thanks largely to timing including Covid. So he wanted to 'move it' obviously. He said, 'we aren't a museum'. Meaning, they weren't there to have cars sit for people to just look at. LOL


----------



## bgc_fan (Apr 5, 2009)

A bit of an aside, but another source of used vehicles are government fleets. They are normally well maintained. Older model cars are likely driven to the ground though. However, there are sometimes newer cars that are reasonable. 
Browse items for sale


----------

