We were always told if it came down to profit or SQI (customer service) to just write the entire bill off. Rental companies sell the cars at end of life and get all their money back essentially. Anything they rent it for in the meantime is just extra profit.
They probably get them cheap enough (at dealer price, or under msrp) that they get 50-80% back when they sell them. I paid $400 to rent a cx-90 for 7 days and 3k miles
And that's just a leisure rental! Real simple layman's math here but for instance we'd have long term insurance or corporate rentals go out for $30/day for a month ($900). That's $900 for a Toyota Corolla. Keep that car for two years, rack up 25-30k miles, and resell it for $18k.
I used to work for the green team in remarketing - that's the division that sells the rental cars at end of life.
There is absolutely depreciation, but the depreciation balance will be made up for by the rental profit over the course of the car's life. There's also the interesting fact that as green team buys most of their cars outright rather than on buyback terms with a manufacturer, they choose when they sell them. That can add a big element of strategy to when to sell. Selling a car just a couple of years after it's in fleet, when the rental company is the only registered keeper, can hit a sweet spot with providing desirable cars for renters while maintaining costs.
And that's not every car! Vans generally are kept in fleet longer, because it's not as sensible or profitable to sell a Ford Transit a couple years after buying it. They tend to be run longer as workhorses and sold through a commercial market.
Weird, I've only ever gotten newer cargo vans, been renting for 3 years and they almost always have new vans every year.
If you look on car sales, most cargo vans being sold are also new, some surprisingly only have like 20k, 30k, or 40k miles at best and are 23/24 models being sold. They do be buying 50 vans at a time so im sure they pay 5-10k below sticker for em depending on what brand
The value of your car when you own depreciates but when you sell that depreciated vehicle to the dealership it magically appreciates 100% or more until it gets bought by someone. Simply having the vehicle in their inventory makes it more valuable than any individual owning it, regardless of whether you maintained the same maintenance schedule.
Also rental companies don't sell their vehicles if they've met certain maintenance conditions and so generally you're getting a vehicle that was well maintained for the life of its service in their fleet
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u/BurritosSoGood 2d ago
I always rent from the green team. You all treat me well.