What Does Fleet Use Mean?

Introduction

If you are searching for or have recently purchased a used vehicle, you may have encountered the term “fleet use” when searching for its title and registration. But what does fleet use mean? Is it a good or bad sign when a used car is marked for fleet use?

Fear not. Many used cars found at the dealership have the fleet use designation, most of which will be quality used vehicles. There’s no need for anxiety when you encounter this term.

We’ll first explore the world of branded titles and then demonstrate that while fleet use is itself a branded title, it doesn’t carry the same negative connotations as other branded titles. Sometimes, a used car marked for fleet use can be a steal. Let’s get into it.

What Is A Branded Title?

If you’re in the market for a used car, you already know the importance of performing due diligence. While it’s not mandated by law, savvy shoppers don’t take the dealership at their word—it’s best practice to pull up titles and registrations for any used vehicle you are considering purchasing.

Prospective used car buyers should empower themselves by looking up the vehicle’s history. Searching for a car with a title aggregator website like CarFax will reveal the vehicle’s repair history and previous owners.

Most branded titles are precisely that—they carry a mark intended to warn prospective purchasers that the vehicle has some baggage. Most branded titles connote possible damage, indicating that a used car may not be worth the investment.

Some commonly encountered branded titles out in the used car marketplace are:

Lemon

No, this title doesn’t indicate your used vehicle is a beloved citrus family member. A “lemon” is an industry jargon for a car with a serious manufacturing defect. It’s an official term designated by the U.S. Congress to protect purchasers. A “lemon” is any new defective car at the house.

A car can only be considered a “lemon” if it cannot be repaired within the original warranty period (or the manufacturer refuses). The congressional Act governing and guaranteeing manufacturer warranties is called the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act.[1]

Salvage Title

A used car marked with the salvage title should stop prospective buyers in their tracks. Also known as junk title titles, insurance companies almost always issue titles. These cars are sometimes called write-offs because the insurance company writes their value as a loss on their balance sheet. A salvage title is applied if the repair cost exceeds the vehicle’s actual value. [2] 

In other words, the insurance company determined it would cost more to repair the car than the car was worth when in good condition. Used vehicles with salvage titles don’t typically signal a good investment. 

Odometer Rollback

This specialized title applies when used car dealerships illegally roll back a vehicle’s odometer. This is a highly deceptive practice—many used car buyers first look at the odometer reading. Odometer rollback titles indicate that your car’s odometer reading has been tampered with and cannot be relied upon as a quality measure.

This list makes you feel more anxious about your used car purchase. And the majority of branded titles are a warning to consumers.

But the good news is that while fleet use is a branded title, it doesn’t have the same negative connotations.

Fleet Use Branded Title – What Is It?

The three examples of branded titles we examined above designate a car that probably isn’t worth purchasing.

At the very least, prospective buyers must lower their expectations for the vehicle. We don’t know your situation—perhaps you really need the most affordable used car you can find and won’t need to use it for longer than a week. But a wise customer would enter into this agreement with full knowledge that, given the vehicle’s history, it will likely demonstrate major mechanical problems or even be unsafe to drive.

Blissfully, the same cannot be said of a used car with the fleet use branded title.

The fleet use title does not indicate a car had severe mechanical problems or that an insurance company wrote it off.

The only thing that a fleet use title indicates is that the vehicle’s previous owner was not an individual but a collective legal entity such as a government agency or corporation.

Fleet use must still be marked – the prospective buyer has a right to know, and some fleet vehicles accumulate intense wear and tear when they end up on the dealership lot. But that’s not something you can assess by the presence of the fleet use title alone, and here’s why:

The needs of each entity – and, by extension, the requirements and uses of their fleet vehicles – are entirely different. Some organizations have high turnover for their fleet, and others drive their cars until they break down.

This is just the sort of variation you see in individual car owners. Some are neglectful, some are meticulous, others miserly. Exercise the same caution and due diligence you would when purchasing other used vehicles with a wise strategy.

Four Types Of Organizations That Employ Fleet Use Vehicles

1. Municipal governments. Municipal governments tend to run school boards, public transit agencies, garbage collection services, and forestry departments, all of which require specialized fleets of vehicles.

2. Police departments. Your used car probably isn’t from a police department, but these are another type of vehicle that will have a fleet use designation. Hey, a Crown Vic is a powerful car—could be nice if you want a cheap used V8!

3. Rental car agencies. Most fleet vehicles on the secondary market come from rental car agencies, whose reputation and prestige rely upon replacing assets for new models every other year or so.

4. Construction companies. If you’re looking to buy a used flatbed pickup and discover it has fleet use marked on its title, it could have been owned by a construction company. 

Is My Used Fleet Car A Bad Investment? 

Not necessarily. A used vehicle previously owned by a rental car agency could be in excellent shape; rental car companies constantly upgrade their stock and replace vehicles after as little as two years of use.

Apply the same caution and care in your investigation as any used car. What is its odometer rating? Is there visible damage to the vehicle? Have you had a mechanic examine its interior components?

Fleet vehicles used in an urban environment can have minor visible exterior damage but worn suspensions from constant stopping and starting or driving over speed bumps.

Be thorough, be patient, and thoroughly investigate your vehicle’s history before signing anything. If the deal seems too good to be true, it probably is. But you should not discount a possible sale on a used car just because it was part of a fleet.

Sources 

[1] Magnuson Moss Warranty-Federal Trade Commission Improvements Act | FTC  

[2] What Happens If Your Car Is Deemed A Write-Off? | Cooperators [3] What Does Fleet Use Mean? Should You Buy A Fleet Used Car? | Way