While there is nothing intrinsically wrong with rental vehicles, there is a sort of stigma or negative presumption about the condition of a vehicle that has primarily or exclusively been driven by borrowers. For better or worse, people are human, and humans tend to treat the belongings of others with less care than they give to their own belongings. This is especially the case where the property does not belong to a friend, acquaintance, or even another individual but, rather, is owned by a rental company.
Even if a rental vehicle checks out mechanically and is free of defects, the stigma is enough to warrant a statute specifically requiring the disclosure of a vehicle's prior use as a rental. As such, a vehicle purchase from a certified dealer who did not disclose the vehicle's rental history is subject to cancellation and rescission even if there does not appear to be anything wrong with the vehicle. Dealer fraud can still be shown if the dealer knew or should have known about the auto's rental history and failed to disclose it voluntarily. California Vehicle Code § 11705 states: “In addition, “fraud” and “deceit” include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intentional failure to disclose a material fact; and any act within Section 484 of the Penal Code.”
Since rentals can be cheaply acquired at auction, they are a common target for less scrupulous dealers, especially those who are not certified and are acting under the radar. Buyers should always make sure they are buying from state-certified dealers in order to increase the odds of being dealt with fairly, as well as to retain as many consumer protection rights as possible in the event they need to seek out remedies.
Even if a vehicle on a dealer's lot is labeled as ‘certified pre-owned,' a cautious buyer should always perform their own verification of the vehicle's history and should not hesitate to ask the same questions about the vehicle's condition and usage or accident history as they would ask if the vehicle were not labeled as ‘certified pre-owned.' The dealer has an affirmative duty to disclosure material facts about the vehicle's history even if the buyer does not ask, including facts about the vehicle prior rental use, but some dealers will use sly tricks and take advantage of the customer's ignorance of certain specific legal rights to avoid complying with requirements that would tend to frustrate a sale.
As always, it is easiest to avoid dealing with returning a vehicle altogether even when the dealer is clearly at fault. Fortunately, the most popular vehicle history sources for consumers—e.g., CarFax and AutoCheck—are pretty good about including a vehicle's rental registration in their used car reports. Buyers should always conduct their own auto history check prior to buying a used car, and they should retain a copy of that report in case there is any later discrepancy relevant to an issue with the vehicle.