Ex-rental cars are again set to be cause for debate in the car sales arena. The recent report by the OFT has again highlighted how dealers need to clearly communicate to buyers that a car they are selling is an ex-daily rental car.
At present the trade mainly view the situation as; if a customer asks they will be told if not, then it doesn’t get mentioned.
Most car dealers today would rather be completely transparent and would not wish to mislead anyone, however if a customer does not want an ex-rental car and discovers that they have in fact just purchased one when the v5 registration certificate gets returned to them with their details recorded, finding out after the event can cause upset and anger.
According to new guidelines the dealer and his staff must inform potential buyers of the cars previous ownership or risk charges of misleading or withholding information. Specifically the OFT state;
‘Sellers must not fail to disclose that a vehicle for sale is an ex-rental vehicle which may have had a number of drivers/users and that it is not sufficient to only inform the consumer of the mileage and the number of previous owners.’
From the trade point of view this particular elephant in the room was thought to have been overcome many years ago.
It is widely accepted that most dealers at some point, whether franchised, independent or supermarkets, will stock a large percentage of ex-daily rental cars, in fact many actively buy these cars because they are much happier with the process and history of how these cars are maintained.
If you think about it, car rental companies depend totally on the reliability and comfort of their cars to keep their customers satisfied and to compete with each other in what is a very competitive global market.
As one rental boss explained to us, “every time a car goes out on rental it has to be thoroughly checked before being re rented, we cannot afford to take chances with safety or with the overall experience or we would quickly lose customers, our reputation and business”.
If rental cars are maintained correctly to the manufacturer’s standards and if all maintenance is carried out then this can only be a good source of second hand stock for dealers.
The perception seems to have been – although it surely is a very outdated idea – that vehicles driven by several different drivers of varying ability or respect would leave the vehicle somehow abused, leaving the actual buyer of the car when it is sold on saddled with a ‘dog’.
In simple terms, the fact that manufacturers sell thousands of ex-rental cars back to their dealer network every day and rental companies successfully re-market their own cars back to dealers up and down the country means that a large number of buyers probably already own an ex-rental car of some description.
It is a matter of speculation that by highlighting the fact that a car is an ex-rental it may lead buyers to believe that is not of the same quality as a privately owned, demonstrator or even single user company car and therefore has to be cheaper.
The BVRLA (British Vehicle Rental and Leasing Association) are concerned about singling out ex-rental cars, warning the OFT that “using a specific single example can provide a negative and perhaps incorrect portrayal of rental vehicles, which could be misleading to consumers”
With used car stock likely to become scarcer over the next few years due to the shrinking car parc it stands to reason that if a customer does not want an ex-rental car they will have to pay a premium for other cars.
Interestingly in The USA customers and dealers alike would rather buy ex-rental cars, so that they can be sure that they are getting a good car and therefore it may not be the problem that some dealers are predicting.
In our opinion its very simple, if dealers are totally transparent and explain in detail how they came to have the car and who owned it previously, what its history is and that it is a genuine quality example the customer can make up their own mind, and if they are prepared to pay more for another example it is their choice.
Unfortunately the car business suffers with its traditional bad reputation and unless customers are happy with the explanations and confident in whom they are dealing with it can cause problems.
The very least that should be done is what the OFT are insisting; buyers must be told and if necessary shown the v5 and servicing history, and if dealers are happy to provide this information (and why wouldn’t they be?) then surely they will carry on successfully selling many more ex-rental cars in the future.