Where Do Rental Cars Go When They are Retired?

If you have ever rented a car, then you’re familiar with the whole process. First, you rent the car, then you drive it around to go sight-seeing or conduct business, and when you’re done, you drop the car and keys off at the rental agency and part ways. But what you might not be privy to is what happens to that rental car after you turn it in, and even more so, when it’s taken out of commission.

What do rental agencies do with retired rental cars?

When you rent a car and return it, the rental agency typically cleans it and then rents it out again to the next customer. But when that rental car is older or has too many miles, then it’s time for the rental agency to retire. According to Reader’s Digest, in those cases, they are either sold to consumers or even auctioned off.

 “Some rental cars are returned to the manufacturer because they were essentially leased to the rental car company,” Thomas Lee, automotive analyst at iSeeCars told Reader’s Digest. “Others, if they’re too old or not in great shape, are sent to wholesale auctions or sold as salvage or for parts. Finally, rental cars in good working condition are sold directly to consumers.”

A customer is at the Hertz counter discussing a rental with an employee
A Hertz worker assists a customer at its rental-car pickup area July 17, 2006 at O’Hare International Airport in Chicago. | (Photo by Tim Boyle/Getty Images)

RELATED: The Hidden Risks of Buying a Former Rental Car

Buying a rental car

Buying a car that was previously used as a rental isn’t a bad idea, especially considering many of them are newer models that are typically only one-to-two-years old. And while some of them might have a lot of miles on the clock, you can count on them being in good shape.

“Rental cars sold directly to consumers tend to be well-maintained and the rental company keeps a history of the maintenance schedule,” says Lee. “Rental cars also tend to have less physical damage because renters are responsible for any damage to the car. These cars tend to come from more recent model years, and their pricing may also be lower than other comparable used cars. Because the rental company is trying to refresh its fleet rather than make a profit, they may be more likely to offer a competitive price.”

Hertz Camaro
Hertz Camaro | Hertz Sales

RELATED: Is Buying a Used Rental Car a Smart Decision?

Rental agencies like Hertz and Avis have their own car sales divisions that sell retired rental cars. Hertz even has a “Rent2Buy” program where you can rent one of their cars for three days to make sure that you like it, and if you buy it, then that just creates room in their inventory to cycle in more cars for the rental fleet. Technically speaking, the whole business model is a win-win scenario because you get a low-mileage car at a competitive price without having to haggle, and the rental agency gets to retire their cars and make way for newer ones.

Hawaii car rental
Hawaii car rental | Getty Images

What about the other cars that aren’t put up for sale?

The other rental cars that don’t get sold to the public they’ll either be brought back, or even bought back, by the manufacturers or if they are in bad shape, then they’ll go off to the auction block or get sold for parts. Either way, no rental car goes to waste, even if they have an early retirement.