Hertz Given Approval to Dump 200,000 Vehicles ASAP

Matt Posky
by Matt Posky
hertz given approval to dump 200 000 vehicles asap

While negotiating the terms of its bankruptcy with creditors, Hertz has been informed that it can sell 200,000 would-be rental vehicles to help cover its debts.

According to a filing with the U.S. Securities and Exchange Commission (approved Friday in the U.S. Bankruptcy Court in Wilmington, DE), Hertz will be allowed to “dispose of at least 182,521 lease vehicles” between now and the end of 2020. Proceeds will then be used to pay off $650 million it owes lenders, with most funds going toward principal payments on financed vehicles.

With the pandemic knocking out manufacturing for months, this is likely welcome news for buyers eyeballing the secondhand market. Dealer lots are light on fresh product at present and times are getting tougher for consumers, making used vehicles all the more appetizing. Even though former rentals have a tenancy to be abused, they typically to go for a bit less than something living a more carefree existence — and Hertz will be desperate to offload them quickly.

Someone hoping to sell their used ride may have missed their window to maximize their return, however. Hertz is about to flood the market, likely suppressing used prices for the rest of this year. The Wall Street Journal and CarScoops, which tipped us off to the SEC filing, had more:

Of course, used rental cars were already a bargain as they cost 5-15 [percent] less than what used car dealers charge. The discount varies by model, but a recent study showed Hertz vehicles are typically priced 8.0 [percent] below market value for an average savings of $1,389.

That same study showed the best bargains were on the BMW 7-Series, Chevrolet Trax and Mercedes A-Class. Customers can also score big discounts on the Infiniti QX50 and Toyota Tundra.

Hertz will make those sales as easy as it possibly can to ensure customers clean up its inventories, and it has loads of used models it’s itching to get rid of on its website. You’ll probably be able to talk them down on the price, too. Just remind them that they’re the ones that need to make the sale to continue existing.

Assuming everything goes according to plan, Hertz Global Holdings has a real chance to keep lenders off its back for another year and return to business as usual with a much smaller footprint (and fleet). But that’s the best-case scenario. Eventually the company has to resume normal operations or continue selling its fleet (totaling around 500,000 units before the big sell-off) until there’s nothing left. Hertz’s management of the crisis will play a major factor, though the final outcome will also be dictated by how the world responds to the ongoing pandemic.

If normalcy fails to return sometime in 2021, and rental demand remains severely depressed, Hertz will undoubtedly go belly-up.

[Image: Hertz]

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  • Forward_look Forward_look on Jul 30, 2020

    I bought a Hertz rental and it took 3 months to do the deal - title, tags, etc. I can't imagine them selling 200,000 cars.

  • Jeff S Jeff S on Jul 31, 2020

    Hertz will run these 200k cars thru an auction and dealers will be the buyers. An auction is the quickest way to dispose of these vehicles and get the cash Hertz needs.

    • Art Vandelay Art Vandelay on Jul 31, 2020

      Yep. For the most part, you won't get a "rental discount" unless you haggle with the dealer after pointing it out on the carfax. They may retail some of their higher end and exotic stuff, but they aren't unloading all of those Altimas and what not through their retail channel.

  • MaintenanceCosts We hear endlessly from the usual suspects about the scenarios where EVs don't work as well as gas cars. We never hear the opposite side of the coin. From an EV owner (since 2019) who has a second EV reserved, here are a few points the "I road trip 1000 miles every day" crowd won't tell you about:[list][*]When you have a convenient charging situation, EV fueling is more convenient than a gas car. There is no stopping at gas stations and you start every day with a full tank.[/*][*]Where there are no-idling rules (school pickup/dropoff, lines for ferries or services, city loading, whatever else) you can keep warm or cool to your heart's content in your EV.[/*][*]In the cold, EVs will give you heat from the second you turn them on.[/*][*]EVs don't care one bit if you use them for tons of very short trips. Their mechanicals don't need to boil off condensation. (Just tonight, I used my EV to drive six blocks, because it was 31 degrees and raining, and walking would have been unpleasant.)[/*][*]EVs don't stink and don't make you breathe carcinogens on cold start.[/*][*]EV maintenance is much less frequent and much cheaper, eliminating almost all items having to do with engine, transmission, or brakes in a gas car. In most EVs the maintenance schedule consists of battery coolant changes and tire maintenance.[/*][*]You can accelerate fast in EVs without noisily attracting the attention of the cops and every passerby on the street.[/*][/list]
  • MaintenanceCosts Still can't get a RAV4 Prime for love or money. Availability of normal hybrid RAV4s and Highlanders is only slightly better. At least around here I think Toyota could sell twice the number of vehicles that they are actually bringing in at the moment.
  • Tree Trunk Been in the market for a new Highlander Hybrid, it is sold out with order time of 6 months plus. Probably would have bit the bullet if it was not for the dealers the refuse to take an order but instead want to sell from allotment whether it fits or not and at thousands over MRSP.
  • AKHusky The expense argument is nonsense. My mach e was $42k after tax credit. Basically the same as similarly equipped edge. And it completely ignores that the best selling vehicles are Rams, F150s, and Silverados, all more expensive that a bolt, MAch e or ID4. As an owner, I'd say they are still in second car territory for most places in the country.
  • Johnster I live in a red state and I see quite a few EVs being purchased by conservative, upper-class Republicans (many of them Trump-supporters). I suspect that it is a way for them to flaunt their wealth and that, over time, the preference for EVs will trickle down to less well-off Republicans.
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