It may not seem like it at first, but the rental car industry is tied, very strongly, to the health of the used car industry. When a rental company is finished with their cars, they often have a huge variety of perfectly fine vehicles that they need to sell, and often the used car market is the first step. But nobody is making quite a dramatic splash in this industry quite like Enterprise.
A Daring Enterprise
Generally, if you finance through a used car dealership, that dealership generally has one or two lenders they work with. A car dealership loan is called an “indirect” loan because you use the dealership as an intermediary between the two. This has pretty much how it’s been since the beginnings of the auto industry, but there are a few problems that have persisted with this arrangement.
The first is that it’s not necessarily transparent. There’s no law requiring any used car dealership to use any particular financial institution; they could work with a national bank, or they could be working with a bank you’ve never heard of. The second is that using indirect loans opens a perfectly legal crevice where a surprising number of fees, costs, and other expenses can fall into, raising the overall price of your car. A good example is the notorious dealer reserve, where you can pay the dealer hundreds of dollars for the privilege of sending a piece of paper to a lender.
So Enterprise has taken matters into their own hands, and made the process as transparent as possible.
United In Good Practices
Essentially, Enterprise works with local credit unions wherever possible, and always discloses which credit union they’re using. This does much, much more than just offer customers a chance to check with the credit union about securing their own financing, however.
The biggest difference is that a credit union is a not-for-profit institution. This means, as a rule, they can offer more competitive rates when lending, as they don’t have any stockholders to satisfy or targets to hit. It also means that the rules are much different; for example, if you borrow from a credit union, that means you’re also a member of that institution. This doesn’t just make borrowing an easier process, it also means that the credit union you borrow from is as accountable to you, as a member, as you are to it as a borrower.
Similarly, credit unions usually have a mission to better support the community through safer lending and more open borrowing practices. That means your money is going back to your community. Finally, Enterprise is a “no-haggle” dealership, meaning that the price you pay is already set, so you won’t have hidden fees or other issues to negotiate with when you approach the credit union.
In short, Enterprise is building a new kind of used car sales, which takes as much of the aggravation out of the process as possible. While you should still check all your options for financing when shopping for a used car, at least you can be confident that Enterprise is working to earn your money.