Car prices decreasing due to Hertz unloading vast number of cars

[aja8888]

Our recent rental (or off lease) crpurchase

In early 2019, we decided we needed a "van" type vehicle with the potential for a wheelchair ramp and possible a powered lift. Our aging 2012 Santa Fe was not suitable.

We found a 2019 Dodge Caravan GT with 17,000 miles on it at Enterprise Auto Sales. The van was "off lease" and may have been a rental or a fleet car. The folks selling the van (Enterprise Auto Sales) had no way to tell what its previous service duty was since they just resell turn ins after they pass reconditioning internally.

The van (V6, 6 speed auto trans) has every option available, including leather, power seats (driver and passenger), climate control, two A/C handlers, bluetooth radio, factory NAV, remote start, seat storage in the floor, and many more options. Factory MSRP was mid-$30'sK. We paid $21,000+ TT&L for the van. The van was immaculate inside and out, and came with carpeted floor mats and a rear cargo pad.

Enterprise gives you a 7 day return policy if you decide to change your mind on the purchase. You are good for 1,000 miles in that week. This is a no questions asked" return policy. If you decide to return the vehicle, there is a $200 fee for use of the vehicle. This policy is very reasonable.

I took the van to a local Chrysler/Dodge dealer that week and asked for an evaluation of it. I paid them $150 for that assessment. The only things not right with the van included, 1. the spare tire was underinflated, and 2., there was a small chip in the windshield, which I did not see.

Enterprise replaced the windshield at no cost to me and used OEM glass @ $700+(I have the receipt as I chose the shop). I put air in the spare tire.

Also, Enterprise included a 12 month, 12,000 mile full warranty (parts and labor) with the purchase. The van also has the remaining factory warranty. To date, now at 34,000 miles, we have not had any issues with the vehicle. We have driven it to Wisconsin and back to Texas and average 26 MPG flat out at 70+ MPH with the A/C on.

I'll go this route again of we need another "near new" vehicle.

 

[CoolRich59]

I assume you must purposely trash them, as generally folks will be extra cautious when renting as to not get a ticket, into an accident, or damage the vehicle which could result in additional expenses and headaches.

I'm a pretty laid back driver in my own car and in rentals. But, I have been in rentals with business colleagues who have driven those cars as if they got a bonus if they broke something - the brakes, suspension, or transmission in particular.

Personally, I would never buy a rental car. (I would never buy a "CPO" car either as I've learned that it is mostly a marketing gimmick.)

 

[pj.mask]

I’ll add a joke I heard. What is the difference between a rental car and a Jeep?

A rental car can go anywhere!

Based on my use, I wouldn’t want a rental. Plenty of times I’ve asked for a AWD or something with more ground clearance as my work sites can be pretty remote. They don’t always have them.
There has been more than a few times dragging bottom on dirt/gravel roads (just don’t ding up the body panels). Also test for burnouts.

I drive a sporty car but I treat it much more gently than a rental.

 

[ExFlyBoy5]

. Also test for burnouts.

Why? You didn't get this out of your system in your teenage years?

 

[Popeye]

I'm a pretty laid back driver in my own car and in rentals. But, I have been in rentals with business colleagues who have driven those cars as if they got a bonus if they broke something - the brakes, suspension, or transmission in particular.

Personally, I would never buy a rental car. (I would never buy a "CPO" car either as I've learned that it is mostly a marketing gimmick.)

What’s wrong with CPO? I’m looking at one or two right now. Under 10k miles and over 25% off Msrp. 2019 models. Something to be wary of?

 

[REWahoo]

CPO vehicles usually cost more and some say what you are actually paying for is nothing more than an extended warranty. One school of thought is you should be able to find a similar non-CPO vehicle for less, and use the savings to pay for any repairs if needed.

I happen to like buying CPO, and currently own two we purchased in 2015.

 

[CoolRich59]

What’s wrong with CPO? I’m looking at one or two right now. Under 10k miles and over 25% off Msrp. 2019 models. Something to be wary of?

I got burned by Audi when I found out my CPO'd A6 had actually been in an accident and improperly restored. Long story short: Even though I got the dealer to admit they'd concealed the damage, they refused to do anything more than some cosmetic touch-ups, and when I complained to Audi HQ, they did nothing.

I know that's one bad experience, but I've read a little bit about the CPO market and learned the CPO tag can be just marketing. See, for example, these articles from Edmunds (link) and Consumer Reports (link).

 

[REWahoo]

I know that's one bad experience, but I've read a little bit about the CPO market and learned the CPO tag can be just marketing. See, for example, these articles from Edmunds (link) and Consumer Reports (link).

The Edmunds article you linked doesn't appear to discourage purchasing CPO. It does stress the importance of making sure you are getting a vehicle certified under the manufacturer's CPO plan and makes it clear you shouldn't expect perfection, but the bottom line:

Should I Buy a CPO Car?

Could you find a high-quality used car that's as good as a CPO car on your own and save some money? Yes. But that would likely take a lot of time and effort. Meanwhile, CPO vehicles are readily available and pre-inspected. There's also the warranty and CPO perks to consider — you don't find those things with a run-of-the-mill used car.

The CPO buying process should be a little less uncertain than typical used-car buying. There is always some level of risk involved in buying any used car, but with a CPO vehicle, it is typically lower. Mechanics who are trained to spot trouble have inspected it. A manufacturer backs it with a limited warranty — and maybe a powertrain warranty, too. Depending on the program, you might have roadside assistance and a loaner-car program at your disposal. You have the manufacturer to turn to if you need help resolving an issue at the dealership level. All those are benefits you typically don't get with a non-CPO car.

 

[CoolRich59]

The Edmunds article you linked doesn't appear to discourage purchasing CPO. It does stress the importance of making sure you are getting a vehicle certified under the manufacturer's CPO plan and makes it clear you shouldn't expect perfection, but the bottom line:

Yes. I was looking for balanced articles and thought these two covered the subject well.

As you noted, you can find CPO cars that have undergone some kind of certification inspection and work, while others have not. I think some people (and I was one of them) see "CPO" and treat it as some kind of Good Housekeeping seal and fail to do any due diligence. If I was to consider another CPO car, I would definitely have it inspected by a mechanic I trust.

 

[Popeye]

Yes. I was looking for balanced articles and thought these two covered the subject well.

As you noted, you can find CPO cars that have undergone some kind of certification inspection and work, while others have not. I think some people (and I was one of them) see "CPO" and treat it as some kind of Good Housekeeping seal and fail to do any due diligence. If I was to consider another CPO car, I would definitely have it inspected by a mechanic I trust.

I would certainly expect no problems, especially from Audi! I’m actually looking at Audi’s now. I’ll be sure to confirm it is a manufacturer CPO and not just the dealer’s. They posted the Carfax on them already as well.

 

[Sunset]

Carl Icahn has really disappointed me, not the investment whiz he was touted to be.
Maybe I can get a Hertz car as a dividend

Just read Icahn sold all his Hertz shares after they declared bankruptcy.
Which was after the stupid CFO etc got their many hundreds of millions retention bonus (since they did such a good job ).

Icahn sold them for 72 cents ea. in the Barron's report I read.

 

[wrigley]

Don't they do extensive cleaning prior to selling?

That’s what I’m talking about. The products they use to clean and freshen are horrible smelling. I think those products are made solely for the rental car industry because every rental I have ever been in smells just as bad as the last one!

Mike

 

[Out of Steam]

I would not be shocked if the factory shutdowns and the difficulties getting restarted mean that the supply of new vehicles is modest hence the low discounts.

The Hyundai dealer near my house is pulling its new cars to the street side of the lot, and has a lot of empty space behind them.

 

[Out of Steam]

I am shocked at the number of people that would consider buying a rental car. The amount of abuse dished out to those things, omg.

I drive them faster than I would drive my own car, but that's mostly because I'm usually in places where the roads are less crowded than near my house within 10 miles of I-95. I'm not jumping curbs just for fun.

That said, I'd consider a rental car with 25-30K miles on it for the right price. As a rental customer, they start looking and feeling rough at 40K miles.

 

[Gearhead Jim]

Hertz put a bunch of Corvette Z06 cars, real hot stuff, from their fleet on the market recently. Discussing it on the Corvette Forum, everyone talks about rental cars being beat up and poorly maintained. But a few people who had actually bought Hertz Corvettes in the past, all said they had excellent results with the cars. I know one guy who bought two Hertz Corvettes over the years and was very happy. One woman bought a Hertz Corvette several years ago with maybe 40k miles on it, she finally traded it at about 250k miles! and had only normal maintenance.

I wouldn't do it, but others have been very happy.

 

[ychuck46]

Avoid them

A rental vehicle is the last used car I would want to purchase. I have seen how some people treat them from my pre-retirement work life.

 

[Sunset]

I've been tempted to buy a rental car.
The companies seem pretty upfront about the various ones available.

Of course I'm influenced by the fact I drive a rental as carefully, and make sure to park far from store doorways, so nobody wants to park near me and dent the rental.

 

[FANOFJESUS]

Hertz put a bunch of Corvette Z06 cars, real hot stuff, from their fleet on the market recently. Discussing it on the Corvette Forum, everyone talks about rental cars being beat up and poorly maintained. But a few people who had actually bought Hertz Corvettes in the past, all said they had excellent results with the cars. I know one guy who bought two Hertz Corvettes over the years and was very happy. One woman bought a Hertz Corvette several years ago with maybe 40k miles on it, she finally traded it at about 250k miles! and had only normal maintenance.

I wouldn't do it, but others have been very happy.

That a good sign for the average joe cars they have. If they will treat a vet ok.

 

[Cotty]

There are various pros/cons on ex-rentals, but one that most folks overlook is that many are virtually identical from same vendor. If you're a person who tends to buy used vs new, that has value. Typical used car vendor will likely show you several cars, you'll drive them and then decide. This exposes you to the decision matrix of which part of each one did i like and which part of each one was good/bad. In a rental fleet used car lot, you can often drive half a dozen or more identical vehicles. Now the decision is which one of these is the best one of these. Sort of like raising sextuplets ad knowing you are going to have to get a lot of pairs of shorts in pretty much the same size. One night I actually drove a dozen identical 4wd V6 2001 Ford Escapes, all with 21-24k miles. One just "felt better" and when I viewed the maintenance records, it was the one that had the engine replaced under warranty just 6k miles ago. I used to get an auto allowance for many years, so driving my own car was required. I've owned over a dozen ex-rentals all either 4wd SUV or typical four door sedans. The one I keep at my daughter's house is an ex-Enterprise and the one I have in CA is an ex-Hertz.

 

[USGrant1962]

I would certainly expect no problems, especially from Audi! I’m actually looking at Audi’s now. I’ll be sure to confirm it is a manufacturer CPO and not just the dealer’s. They posted the Carfax on them already as well.

I bought an A4 "CPO" just before COVID hit. CPO in quotes is an interesting story. The car (2018 with 11K miles) was listed as CPO. They showed me the inspection report, etc. After the test drive I decided I wanted it and tried to see if they would move on price as there was another comparable car at another dealer for slightly less. They wouldn't really budge.

After a bit, the sales manager said he could not submit the CPO warranty and take that fee (which goes to Audi) off the price. It was $750, a lot for a one-year warranty extension. So I took that deal, $750 off a CPO-qualified car without the extended warranty.

So far so good except it has mostly sat in the garage during the repression.

I've also bought a car from Hertz for the kid to drive - a Toyota Matrix. No problems there. You rent it for a couple of days, take it to your mechanic, and if you buy it are credited the rental cost.

 

[brett]

I believe that the covid and post covid economic downturn will have a far greater impact on the cost of used cars.

New car prices are coming down in the form of various buyer incentives. These incentives are bound to have a negative impact on used car sales and prices. Just as they did in previous recessions.

 

[RetiredAtThirty-eight]

The volume of new EV's hitting the market will also pressure new gas car prices. People are starting to understand that there are many advantages to EV's and the total cost of ownership is more important than the price upfront. Plus, some people just like to treat themselves sometimes.

 

[USGrant1962]

The volume of new EV's hitting the market will also pressure new gas car prices. People are starting to understand that there are many advantages to EV's and the total cost of ownership is more important than the price upfront. Plus, some people just like to treat themselves sometimes.

I doubt the ~2% market share of EVs in the US (even growing at 20% CAGR) will affect car prices any time soon. Especially considering that they are all above the median new car price.

 

[RetiredAtThirty-eight]

I agree that there is not enough EV manufacturing capacity on-line at the moment to impact lower end car prices but at the middle and higher ranges, gas cars have to compete with some pretty compelling EV's which limits the MSRP's of mid-higher tier ICE vehicles. Some people think EV's only compete with other EV's and that was true when EV's had short ranges but now that they can go 300-400 miles on a single charge they are competing directly with gas-powered vehicles and people are willing to pay a premium for the advantages you can only get with an EV.

 

[BeachOrCity]

The volume of new EV's hitting the market will also pressure new gas car prices. People are starting to understand that there are many advantages to EV's and the total cost of ownership is more important than the price upfront. Plus, some people just like to treat themselves sometimes.

Total cost of ownership? Any studies that back that up?