Car prices decreasing due to Hertz unloading vast number of cars

[REWahoo]

Quote:

Originally Posted by W2R My 2009 Toyota Venza, bought brand new, fits the bill, and I haven't had to shop for another car in over a decade. I might sometime in the next five years or so. We'll see.

This might be of interest: Toyota discontinued the Venza in 2015 but is reviving it in 2021, on sale in August. It will be hybrid only.

Toyota Venza Returns for 2021 as Two-Row Hybrid-Only SUV

[Spock]

speaking of a-holes who abuse rental property:
There is a legend of an IBMer who had a thing for sports cars. Once on a business trip to FL he rented a sports car from Hertz using the company discount.
He then "managed to access" (broke into) the Daytona race trace and was trying to turn some hot laps
when he drifted up and scraped the wall... tore the whole side off the car.
IBM banned him from ever renting a car on the company travel program and the rental companies black balled him as well. Any travel from them on required that he have some flunky along who could rent a car.

[W2R]

Quote:

Originally Posted by REWahoo This might be of interest: Toyota discontinued the Venza in 2015 but is reviving it in 2021, on sale in August. It will be hybrid only. Toyota Venza Returns for 2021 as Two-Row Hybrid-Only SUV

Thanks! I'll be keeping an eye out for reviews by those who buy it. I only drive an average of 3000-3500 miles/year, so I probably don't need a hybrid. But as you know I have had trouble pinpointing a new car to buy that would fit my needs and desires. Maybe this will be the one.

[brewer12345]

I would give it a month or two before expecting to see what the Hertz liquidations will do to prices. They are now in bankruptcy and anything they do likely requires the assent of the presiding judge. That will take time. They will definitely be selling off lots of cars, so I imagine prices will be coming down across the market in the second half of the year. I plan to take advantage of the declines as it is time to find a replacement for the 15 year old minivan that will soon become the teen driver car.

[DAYDREAMER]

I use them as test to see if the make of car is worthy for future make or model purchase decisions. But honestly don't give a hoot if the rental brakes are getting trashed as I descend Haliakila. Definitely a jeuvinal A-hole perspective to it!

In no way would I treat my cars the same way.

[sengsational]

I don't consider myself an abuser, but did take the whining small rental to the telescopes and didn't worry too much about the strain. No need to ride the brakes, but got the rpms up on the way up and down.

[REWahoo]

Quote:

Originally Posted by DAYDREAMER But honestly don't give a hoot if the rental brakes are getting trashed as I descend Haliakila. Definitely a jeuvinal A-hole perspective to it! In no way would I treat my cars the same way.

^ This is the same mindset that has always deterred me from becoming a landlord.

Back on topic, I agree with Brewer that the used car market probably won't bottom out on price for another couple of months at least. Being patient will probably save you a few bucks.

[aja8888]

The story on Hertz's vechiles:

Quote:

Hertz, which runs the second-largest rental fleet in the US behind Enterprise, owns its fleet in two types of setups: as “program vehicles” and “non-program” (or at-risk) vehicles. Program vehicles are purchased from automakers under repurchase or guaranteed depreciation programs, where automakers agree to repurchase the vehicles at a set price; or they guarantee the depreciation rate until the vehicle is repurchased or sold at auction. These program cars are more expensive for Hertz. But they have two benefits for Hertz that would now be sorely needed: They shift the risk of the vehicle’s value to automakers; and they allow Hertz to get out of units at preset prices, giving Hertz flexibility in cutting its fleet when it needs to without taking losses. If Hertz decides to shed some of those vehicles, they’ll show up at the auctions, adding to the supply of used vehicles. But it’s the automakers that will have to take the losses. However, only 29% of its fleet in the US, or about 164,000 vehicles, were program vehicles as of Dec 31, according to its 10-K filing. The remaining 71%, or 400,000 vehicles, were non-program at-risk vehicles. They’re owned outright by the company, and it carries all the risks. Hertz leased these 400,000 vehicles from entities it created and owns – such as Hertz Vehicle Financing II LP, a “bankruptcy remote” wholly-owned special-purpose subsidiary of Hertz. These special-purpose subsidiaries are not part of the bankruptcy filing. But they have securitized these leases of the at-risk fleet into $14.5 billion of asset-backed securities (ABS) as of March 31. These $14.5 billion in ABS, which are also not part of the bankruptcy filing, are held everywhere, from pension funds to hedge funds and bond mutual funds. The 400,000 vehicles are the collateral. On April 29, Hertz announced that it missed making the payment on its vehicle operating lease to its special-purpose subsidiary. Thus, the cash flow to the special-purpose subsidiary collapsed, which then cannot pay the holders of the ABS. Hertz was able to negotiate “short-term relief” with the holders of the ABS at the time, it said, but was “unable to secure longer-term agreements” to reduce the payments. The ABS holders now have a right to foreclose on the vehicles and sell them at auction. But they have to wait for 60 days. So this scenario would commence toward the end of July.

https://wolfstreet.com/2020/05/24/he...ent-up-supply/

[njhowie]

Quote:

Originally Posted by REWahoo ^ This is the same mindset that has always deterred me from becoming a landlord. Back on topic, I agree with Brewer that the used car market probably won't bottom out on price for another couple of months at least. Being patient will probably save you a few bucks.

Definitely true. As I mentioned - dealers have also been refusing to take back leased vehicles which have reached their end of contract...and they will have to. This will add to the glut of available inventory.

https://losangeles.cbslocal.com/2020...irus-pandemic/

https://www.usatoday.com/story/money...os/5120328002/

[REWahoo]

Quote:

Originally Posted by aja8888 The story on Hertz's vechiles: https://wolfstreet.com/2020/05/24/he...ent-up-supply/

Good info. Looks like if anyone is in the market for a used car it might pay to wait until at least August to buy.

[Texas Proud]

They had an article recently where they were selling Corvettes Z-06s specially build for Hertz... and a 'decent' discount from what others were selling...


Not sure if any are still available as IIRC there were only 10...





BTW, I think most people treat the rental car as they do their own... it is a vehicle to get you from point A to point B... as for Camaro, I rented a convertible when we went to Hawaii... drove it like a normal car but enjoyed it... plus it was designed to be driven hard.. I would not get one because they are not that great on long term reports...

[OldShooter]

Quote:

Originally Posted by REWahoo Good info. Looks like if anyone is in the market for a used car it might pay to wait until at least August to buy.

Yes. There will be a liquidation plan proposed to the court, including a plan for the ABS vehicles. Probably they will just be legally handed over as foreclosed collateral. Then the ABS security owners will participate in some kind of plan to sell them, probably in wholesale quantities. Finally those buyers will feed them into the auctions.

The fancy 'vettes and (IIRC) Camaros may be a special case and actually be owned by Hertz. If so, they can be sold to improve the company cash position. If someone can get a VIN I suppose the actual titled owner can be identified.

[RunningBum]

An example of the "abuse" I used to give rental cars would be to go out of the hotel in the morning and with very little time to warm up I'd be gunning it up the very near on ramp to a freeway. Not that good for a car, and not something I'm usually in a position to do with my car. So, yes, I am generally harder on rental cars than with my own.

[Golden sunsets]

Quote:

Originally Posted by DAYDREAMER The very first thing I do with a rental car is floor it to see if it will burn out. I take them up mountains, and don't worry about burning brakes on the way down. I don't worry about curbs. I baby nothing in the car. I don't dent them though. That would cost me.

Seriously? Why would you do that?

Having asked that though, as it sounds like atypical(strange) behavior, I would never buy a rental vehicle, as there may have been literally many hundreds of people who rented the car before the rental company retired it. That fact would not appeal to me.

[Golden sunsets]

Quote:

Originally Posted by DAYDREAMER I use them as test to see if the make of car is worthy for future make or model purchase decisions. But honestly don't give a hoot if the rental brakes are getting trashed as I descend Haliakila. Definitely a jeuvinal A-hole perspective to it! In no way would I treat my cars the same way.

Well I'll give you points for owning up to A hole behavior.

[NameTaken2]

Quote:

Originally Posted by DAYDREAMER I use them as test to see if the make of car is worthy for future make or model purchase decisions. But honestly don't give a hoot if the rental brakes are getting trashed as I descend Haliakila. Definitely a jeuvinal A-hole perspective to it! In no way would I treat my cars the same way.

kar·ma
/ˈkärmə/
noun: karma (in Hinduism and Buddhism) the sum of a person's actions in this and previous states of existence, viewed as deciding their fate in future existences.

1. informal
   • destiny or fate, following as effect from cause.
   
   
   
   

[Montecfo]

Aja8888-

Thanks, that is very valuable to cut through the clutter on the Hertz situation.

Commenting on the thread, I have not found that CPO cars are primarily former rentals. In my experience, most are lease returns but some are also bought at auction, as are a great many used cars in the US.

I do find the former rentals through Hertz are cheaper in terms of ask prices. My guess is that is a pretty cheap way to buy, assuming you do your homework.

Any used car purchase carries an element of risk. I would not shy away from buying a low mileage former rental for the sole reason that it was a rental. I think you need to inspect the car and scrutinize history.

I do know folks that primarily seek to buy a rental when in the market for a car, because they perceive there is value in them.

[brewer12345]

Quote:

Originally Posted by OldShooter Yes. There will be a liquidation plan proposed to the court, including a plan for the ABS vehicles. Probably they will just be legally handed over as foreclosed collateral. Then the ABS security owners will participate in some kind of plan to sell them, probably in wholesale quantities. Finally those buyers will feed them into the auctions. The fancy 'vettes and (IIRC) Camaros may be a special case and actually be owned by Hertz. If so, they can be sold to improve the company cash position. If someone can get a VIN I suppose the actual titled owner can be identified.

Since the ABS trusts are bankruptcy remote, they needn't go through the court to liquidate collateral. All they have to do is follow the rules laid down iin the offering memorandum/indenture.

[RunningBum]

I get that people don't like how daydreamer drives rental cars. However, if you think that people drive rentals gently and are thinking of buying one used, you might appreciate that insight that some treat them more roughly. I doubt he's the only one.

[braumeister]

Quote:

Originally Posted by Montecfo I do know folks that primarily seek to buy a rental when in the market for a car, because they perceive there is value in them.

I have two friends who have been buying from rental companies for over 40 years and never gotten anything but a good deal.