No, dealers get leased cars returned to them. Some big leasers like Budget have to keep a certain number of cars even if all the cars pass the dealer's inspection. Those end up going to auction, or sold on Budget's lots. Those cars could be turned down for any number of reasons: excessive damage, excessive mileage, etc. That's why, if you look on Ebay, you'll see a good number of 2012 Focis with 30k+ mileage for sale. The worst ex-rental cars go through auction, then end up on used car dealer lots where they try to get the most out of you for them.
The whole rental/lease program is a big automotive meat grinder. They just chew up cars and spit them back out on us.
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