Used car prices have risen in 2020 due to increased demand and limited inventory as a result of the COVID-19 pandemic. With used car prices up and multiple sources to buy a used car from, consumers should examine all their options when trying to save money and find the best deal on a used vehicle.
“As contact-free online dealers have gained popularity as a safe alternative to traditional dealerships, and as struggling car rental companies unload their inventory, consumers might be considering these alternatives to traditional brick and mortar dealerships,” said iSeeCars Executive Analyst Karl Brauer. “It’s important that used car shoppers compare prices across these types of dealers if they want to get the best deal possible on a used car.”
Car search engine iSeeCars.com analyzed over 8.5 million used car sales across the three dealer types of traditional local dealerships, virtual dealerships, and rental car companies and found that rental car dealers consistently provide the greatest savings, while local dealerships are priced close to market value and virtual dealerships are priced above market value.
|Best Places to Buy a Used Car - iSeeCars|
|Dealer Type||Avg Price to Market Value ($)||Avg Price to Market Value (%)|
|Rental Car Dealers (Hertz, etc.)||-$303||-1.6%|
|Traditional Local Dealerships||+$31||+0.2%|
|Online Dealerships (Carvana, etc.)||+$444||+2.4%|
|Best Places to Buy Popular Vehicles - Average Price to Market Value (%)|
|Popular Vehicle||Rental||Virtual||Local||Place with the Best Pricing|
|Chevrolet Silverado 1500||-6.6%||+2.5%||+0.3%||Rental|
|GMC Sierra 1500||-||0.0%||-0.1%||Local|
|Jeep Grand Cherokee||-3.4%||-0.2%||-0.6%||Rental|
|Ram Pickup 1500||+0.8%||+2.7%||+1.1%||Rental|
Six vehicles on the list are not commonly offered by rental car agencies including the GMC Sierra 1500, the Honda Accord, the Honda CR-V, the Jeep Wrangler, the Subaru Forester, and the Subaru Outback. “These vehicles are still sold at rental car companies, but the frequency and choice will be limited,” said Brauer.
Six vehicles commonly found across all three retailers stand out as not having the most significant savings at a rental agency. “The Ford Escape has the most savings virtually, and the Ford Fusion and Hyundai Tucson are priced above market value at all three dealership types but have the smallest increase at local dealerships,” said Brauer. “On average, traditional local dealerships are where consumers are most likely to find deals on the Mazda CX-5, while the Toyota Corolla and the Toyota Tacoma have the lowest increases above market value.”
|Popular Cars With the Greatest Savings: Car Rental Companies|
|Rank||Vehicle||% Savings||$ Savings|
|1||Chevrolet Silverado 1500||6.6%||$2,016|
|5||Jeep Grand Cherokee||3.4%||$1,021|
Two popular sedans, the Honda Civic and the Nissan Altima also offer significant savings when consumers purchase through a rental car dealer. “Despite sedans’ overall decline in market share, these models have remained popular rental options, and consumers can save money on these vehicles through a rental car dealer,” said Brauer.
There are other benefits beyond savings opportunities to buying a used rental car. “Rental cars follow routine maintenance schedules and are routinely inspected for cosmetic damage,” said Brauer. “All Hertz and Enterprise vehicles undergo a rigorous inspection process from certified mechanics and come with a 12-month/12,000 mile limited powertrain warranty.”
But despite the savings, there are limitations to buying from a rental car company. “Rental cars typically have higher mileage and more wear and tear because they have had many drivers who may not be as careful with the vehicle as they would be with their own car,” said Brauer. “Rental companies also typically buy the base model of a vehicle, so consumers who want higher trim levels may have difficulty finding the specific version they want.”
|Popular Cars With the Greatest Savings: Online Dealerships|
|Rank||Vehicle||% Savings||$ Savings|
|3||Jeep Grand Cherokee||0.2%||$37|
Along with the convenience of delivering a vehicle right to a shopper’s door, online dealers rigorously inspect their vehicles and offer free protection plans. “If a consumer isn’t satisfied with their vehicle, they have a five-to-seven day return window to help ease anxiety about not being able to test drive the vehicle prior to purchase,” said Brauer.
Buying from an online dealership also presents its challenges. “Buying a vehicle from an online dealer doesn’t allow you to do a traditional test drive and the dealers use no-haggle pricing, with no room for negotiation,” said Brauer.
|Popular Cars With the Greatest Savings: Traditional Local Dealers|
|Rank||Vehicle||% Savings||$ Savings|
|4||Jeep Grand Cherokee||0.6%||$140|
|10||GMC Sierra 1500||0.1%||$35|
When purchasing a used car from any type of dealer, consumers should always do their research and follow important steps to make sure a good deal isn’t too good to be true. “Online tools like the iSeeCars VIN check report provides all the important information needed to help consumers find the best car at the best price,” said Brauer. “Shoppers should always obtain a vehicle history report and have it inspected by an independent mechanic.”
Best Place to Buy Used Cars By Metro Area
iSeeCars analyzed the data geographically and determined the best place to buy used cars by metropolitan area.
|Best Place to Buy Used Cars and Average Price Differences By Metro Area|
|Metro Area||Best Place to Buy?||Avg Price Compared to Market Value ($)||Avg Price Compared to Market Value (%)|
|Albuquerque-Santa Fe, NM||Rental||-2.5%||-$528|
|Boston, MA-Manchester, NH||Local||+0.1%||$17|
|Dallas-Ft. Worth, TX||Rental||-2.1%||-$424|
|Grand Rapids-Kalamazoo, MI||Rental||-1.1%||-$221|
|Greensboro-Winston Salem, NC||Local||+1.1%||+$210|
|Hartford & New Haven, CT||Rental||-0.2%||-$42|
|Kansas City, MO||Rental||-2.0%||-$407|
|Las Vegas, NV||Local||+0.1%||+$11|
|Los Angeles, CA||Rental||-2.1%||-$413|
|Miami-Ft. Lauderdale, FL||Rental||+0.4%||+$75|
|Minneapolis-St. Paul, MN||Rental||-1.9%||-$383|
|New York, NY||Rental||+0.3%||+$52|
|Oklahoma City, OK||Rental||-2.1%||-$409|
|Orlando-Daytona Beach, FL||Rental||-1.0%||-$193|
|Raleigh-Durham (Fayetteville), NC||Rental||-0.9%||-$179|
|Salt Lake City, UT||Local||-0.4%||-$89|
|San Antonio, TX||Rental||-2.9%||-$568|
|San Diego, CA||Rental||-2.9%||-$560|
|San Francisco-Oakland-San Jose, CA||Rental||-1.9%||-$364|
|St. Louis, MO||Rental||-5.0%||-$930|
|Tampa-St Petersburg (Sarasota), FL||Rental||-0.7%||-$139|
|Washington, DC (Hagerstown, MD)||Rental||-1.0%||-$184|
|West Palm Beach-Ft. Pierce, FL||Rental||-0.4%||-$75|
iSeeCars analyzed over 8.5 million used cars sold in 2020 by online-only dealerships, rental car agencies, and other used car dealers. The price of each car was compared to similar cars sold nation-wide by other used car dealers, as was its mileage. The resulting comparison was expressed as both a dollar difference and percentage difference from “market value”, and the data was aggregated at an overall level, as well as the model level for the best-selling cars of 2020. Models sold at low volumes by any particular dealer type were excluded from the final analysis.
iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars VIN check reports. iSeeCars.com has saved users over $249 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of new cars and used cars.