Demo, Fleet, and Rental Cars

Not everyone considers demo, fleet, or rental vehicles when it's time to buy a car, but—after weighing the pros and cons—they could turn out to be attractive options, at the least.

Demo, Fleet & Rental Vehicles Defined

Demo Vehicles

Simply put, a demo vehicle is one that's been used by a dealership's staff members for various reasons including, but not limited to:

  • Acting as a salesperson's personal vehicle for a designated period of time.
  • Used during test drives with prospective car buyers.

Generally, demo vehicles are sold at discounted prices once they accumulate a few thousand miles.

Fleet Vehicles

As the name suggests, generally a fleet vehicle is one that belongs to a group of vehicles used for commercial purposes.

Depending on the situation and state laws, a fleet vehicle might be one that is owned by a:

  • Company:
    • The company's name is listed as the owner.
    • Some company-owned fleet vehicles are driven by employees as personal vehicles or commercial vehicles.
  • Bank or other financial institution:
    • The fleet vehicle is included in a lease portfolio.
    • Generally, this fleet vehicle is leased to a private individual.
  • Dealership:
    • In some manner, the fleet vehicle is included as part of the dealership's inventory.
    • Often, dealers can sell fleet vehicles at auto auctions.

Note that sometimes, rental cars also are considered fleet vehicles. Learn more below.

Rental Cars

A rental car is one a driver can rent from a car rental service for anywhere from a day or two to a few weeks.

Generally, people rent cars because they're traveling, are waiting on their own vehicles to be repaired, or simply do not own their own vehicle and need a temporary mode of transportation.

Pros & Cons of Demo, Fleet, or Rental Cars

Typically, demo, fleet, and rental cars are used cars, and we all know that—when done properly—shopping for a used car can save thousands of dollars.

However, “used cars" that were once demo, fleet, or rental cars come with a little extra baggage. That's why it's important to do your research before buying a car that was once used for demo, fleet, or rental purposes.

Below, we've listed some of the pros and cons to buying a car that was once a demo, fleet, or rental vehicle.

Pros

  • Generally, demo, fleet, and rental cars for sale aren't more than a few years old.
  • Sometimes, these vehicles still have their manufacturer's warranties (depending on their age, mileage, and other factors).
  • For the most part, owners of demo, fleet, and rental cars schedule regular maintenance for their vehicles. Ask for any available service records.
  • Although they're sometimes difficult to price (especially in the cases of fleet and rental cars), these vehicles are used, which means you could get them for thousands of dollars less than you would brand-new models.

Cons

  • Sometimes these vehicles (especially rental cars) are the most basic models, which means you won't get any of the convenience or “luxury" extras you might be after.
  • Often, car rental agencies self-insure and handle their own vehicle repairs. Sometimes, this means accidents go unreported, which in turn means they won't show up on vehicle history reports.
  • You can expect resell value to take a hit. Despite the vehicle's “blue book" value, prospective buyers might not be willing to pay what you're asking when they learn the vehicle was once a demo, fleet, or rental car.
  • Potentially, some of these vehicles have been driven often by numerous drivers, so be on the lookout for high mileage.

Before you decide to purchase a demo, fleet, or rental car, do some more research with our section on Used Car Buying Mistakes to Avoid.