Many major automobile manufacturers, including the big three domestic producers Ford, Chrysler, and General Motors, release thousands of nearly new vehicles for sale at dealer auctions every year. These vehicles are known in the industry as program cars. As a major reseller of these program vehicles on eBay, I've discovered that many potential buyers don't have a good grasp on what a program car really is.

Major corporations, including big name car rental companies, fleet management firms and other businesses with large car volume needs will contract with a major car manufacturer to lease a set number of their vehicles in a certain period of time. This is a win-win situation for both parties. The automobile manufacturers can count on leasing a fixed number of certain models within a given time frame. The corporations can purchase new vehicles at a substantial discount. But what happens to these cars once the lease period ends?

Major rental firms, like Hertz, Avis and Budget, turn their cars over after they are between 6 and 12 months old. Part of the lease agreement states that the automobile manufacturer will accept the lease vehilce back once the time period, or mileage limit, is reached. The automobile manufacturers then take these corporate lease returns, or program cars, to a licensed dealer-only auction and sell the autos.

I've sold nearly 100 program vehicles on eBay during the past 12 months, and feel that I have a good handle on the pros and cons of purchasing one of these cars. On the plus side is the cost savings that come from buying one of these cars. You can obtain a car that is only a few months old for savings of between 30-45% off the cost of a new one. The remaining full manufacturers warranty is still in effect on these cars.

Many consumers seem to be under the mistaken impression that corportate lease vehicles, particularly those from rental companies, are somehow mechanically inferior. I find just the opposite to be true. When an individual purchases a new car, he or she may or may not follow the manufacturer's recommendations for service proceedures. Buying a one year old car from a private seller is a shot in the dark as far as maintenence is concerned. However, the maintenence programs at major rental companies far exceeds the manufacturer's recommendations.. I've never purchased a program car that needed any type of service work done. They have all been in outstanding mechanical condition.

Are there any negatives to purchasing a program car? Well, the mileage will often be higher than what you would expect from a year-old car. Typically program cars will be sold with between 12,000 and 28,000 miles on them. However, the cost savings over buying from a private seller will far offset any lost value from extra mileage.