When rental cars are sold on the used car market, they are sold for lower prices than cars of the…

When rental cars are sold on the used car market, they are sold for lower prices than cars of the same model and year that were owned by individual owners. Does this price difference reflect adverse selection or moral hazard? Could car rental companies reduce this problem by carefully inspecting rental cars for damage when renters return such cars? Why do car companies normally perform only a cursory inspection?