We’ve heard this song before: A media organization or watchdog group goes “undercover” to discover that — gasp — used vehicles are being sold from dealer lots that had been fleet vehicles, and customers were unaware! “I never would’ve bought the vehicle had I known it was a rental car,” said Ms. Jones.
The report then uses words such as “thrashed” to generically describe all rental cars. Because, of course, we all know that otherwise mild-mannered Dr. Jekylls deliberately morph into Mr. Hydes behind the wheel of a rental car. They aim for potholes, find empty parking lots for tire-burning “smoke shows,” teach their sons the art of drift racing, that sort of thing.
In the latest instance, a case from the U.K. contends that disclosure rules were broken when two vehicles were advertised as having one owner, “but it was later discovered both were ex-fleet vehicles.”
A law firm makes the point that under a U.K. unfair trading regulation, “where it is impossible to quantify the difference in value [between the market price for a privately owned car and an ex-fleet, business or hire vehicle] damages are then calculated as a percentage of the purchase price.”
According to the regulation, the law firm says, compensation is calculated as a percentage of the purchase price — from 25% and 100%. At this point, no owner has actually been compensated in this manner. But can you imagine an owner of a perfectly mechanically sound ex-fleet vehicle cashing a check for up to the full purchase price of her car, in addition to keeping the car?
The coverage of this “scandal” fails to elucidate a few points. First, the regulation does not identify type of fleet: Was the first owner a rental company, or a lessor of company cars? Second, as a rental or leasing company is in fact “one owner,” shouldn’t the rule itself be amended to evaporate any gray clouds before going after dealers? Third, is there any empirical evidence that fleet vehicles are less mechanically sound than vehicles sold from private owners?
This third point is the thing. The notion of an ex-fleet vehicle — particularly a rental vehicle — being abused is so ingrained in society that news reports don’t even challenge its veracity. (Certainly, Johnny Knoxville did this notion no favors in this car rental stunt from Jackass the Movie.) Instead, the coverage concentrates on the sting, the “outrage,” and proposals for remedies.
Sure, auction inspectors will tell you that rental units will suffer their fair share of dents and dings, but reconditioning is a normal part of the remarketing process. And all buyers should factor mileage into their decision, no matter who the seller.
But if there is a study that correlates an inordinate amount of mechanical problems with ex-fleet vehicles, rental or otherwise, please show it to me. I’ve never seen such a study. For this reason, of course it’s “impossible to quantify the difference in value [between the market price for a privately owned car and an ex-fleet, business or hire vehicle].”
The reality is that the duty of care for a rental vehicle in totality surpasses that of a vehicle owned by a private individual. Any dealer who inspects rental vehicles and is able to qualify them as certified, preowned (CPO) units will tell you that. Any manager of an Enterprise or Hertz used car lot will tell you that, and then show you their thousands of satisfied customers.
I’m all for disclosure; we all should be. Regulatory bodies and dealer groups should agree on appropriate disclosures to buyers on the original owners. Perhaps with greater disclosure will come awareness that the knee-jerk negative reaction to an ex-fleet vehicle is not correlated to reality.
Originally posted on Business Fleet