Car prices decreasing due to Hertz unloading vast number of cars

[Z3Dreamer]

This article suggests that Hertz filing for bankruptcy and their cash needs may lower the prices of cars for sale. Article suggests a 5% to 15% savings over a used car dealer.

https://www.cnn.com/2020/05/24/business/buying-used-rental-cars/index.html

In my informal, brief, unscientific, un-statistically valid comparison of Hertz cars with similar cars on Autotrader, I do not see much of a decline. Your thoughts?

BTW, my daily driver has 166,000 miles and DW's has 102,000, so....

 

[REWahoo]

Saw the same article and checked prices at Hertz, Avis, and Enterprise sales sites. It appears Avis has lower prices.

Compared the Avis price for a couple of vehicles to Edmunds valuations. Both were priced at or near Edmunds "Private Party" price, roughly 10% less than "Dealer Retail" price.

 

[njhowie]

In the past, when needing to replace our cars, I have checked on the Hertz resale site. On Thursday they sent me a marketing email to come back and check. Their prices are generally pretty good. I'm guessing that there will be much better prices in the coming months. Unfortunately we're not really in the market for a car right now - mine gets replaced next, it's 10 years old with almost 110,000 miles on it, but it is in great shape and runs well, so I'm determined to get at least another 5 years out of it.

 

[Spock]

It will lower prices over time. Its not instantaneous as in "right now!".
Hertz direct sales needs to try to recover as much cash out of the assets as possible, so they're not just dumping cars. That will happen later when the costs of storage/financing/depreciation forces them to speed up and the vehicles start hitting used car auctions.

 

[Markola]

Good prices on Volkswagens at the Avis site.

 

[DAYDREAMER]

Buy a rental car? No thanks. I trash them when renting

 

[njhowie]

Buy a rental car? No thanks. I trash them when renting

Of course you trash them when renting. How exactly do you trash them? 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.

The certified pre-owned used cars at the major auto dealers are primarily from rental inventory. We've purchased only certified pre-owned for the past 20 years and have always been extremely happy with the price, quality, and follow up services.

 

[RunningBum]

Buy a rental car? No thanks. I trash them when renting

That's what I'm thinking too. I know people say that you know you have a car that's been maintained well when it was a rental, but I'm not even sure of that. When they are only going to keep a car for a year or two, do they really do much maintenance? Often it's a driver who notices issues with a car, but how many renters report an issue? Plus you have people driving it who stomp on the gas pedal and brakes, or might do dumb things like drive with the park brake on because they aren't familiar with it. I'll pass.

 

[RunningBum]

The certified pre-owned used cars at the major auto dealers are primarily from rental inventory. We've purchased only certified pre-owned for the past 20 years and have always been extremely happy with the price, quality, and follow up services.

I thought they were mainly cars returned at the end of their lease? Technically you might call those rental cars, but those are not from rental car companies. Don't CPOs also tend to be lower mileage, which rental cars probably aren't?

https://www.caranddriver.com/shoppi...certified-pre-owned-cpo-car-programs-feature/

CPO vehicles tend to be newer, lower-mileage examples that the dealer has taken back at the end of their lease or as a trade-in.

You're saying that the rental car companies have their own sales, but also go through a dealer for CPO cars? Why wouldn't they try to sell those themselves?

 

[njhowie]

I thought they were mainly cars returned at the end of their lease? Technically you might call those rental cars, but those are not from rental car companies. Don't CPOs also tend to be lower mileage, which rental cars probably aren't?

https://www.caranddriver.com/shoppi...certified-pre-owned-cpo-car-programs-feature/



You're saying that the rental car companies have their own sales, but also go through a dealer for CPO cars? Why wouldn't they try to sell those themselves?

Yes, CPO is also from off-lease inventory...which I understand is also spiking now. I read an article a couple weeks ago that dealers have been refusing to take back leased cars which have come up to the end of their lease.

Yes, the rental car companies have their own sales. The cars sold as CPO through dealers are purchased by the dealers from the rental car companies. CPO/used cars which were previously rentals are required to disclose that - at least in my state.

 

[cooch96]

Rental cars are the perfect cars for going off-road, practicing burnouts, and hitting speed bumps at speed. I’ve done all that or been in a rental with friends who’ve done that.
I wouldn’t buy a rental under most any foreseeable circumstance.

 

[REWahoo]

I've never "trashed" any car, including a rental, so maybe that colors my opinion more favorably towards the rental market.

I've purchased a number of rentals and never had issues - saved $ on the price, too. Own a 2015 ex-rental I purchased in late 2015 with 10K miles and saved 25% on the best price I could negotiate for the same car new. Purchased as a CPO vehicle through a dealership.

YMMV.

 

[GravitySucks]

I wouldn't buy a Mustang or Camaro from a fleet, but can't imagine a Camry or Minivan getting abused.

Buy a rental car? No thanks. I trash them when renting

 

[REWahoo]

The cars sold as CPO through dealers are purchased by the dealers from the rental car companies. CPO/used cars which were previously rentals are required to disclose that - at least in my state.

Disposing of used rental cars

As a general rule, rental car companies buy a large portion of their vehicles subject to repurchase or depreciation programs with the vehicle manufacturers. Under these programs, manufacturers agree to repurchase the vehicles at a specific time and/or price in the future, subject to certain conditions, or to guarantee the depreciation rate on the cars throughout the holding period.

I see a lot of CPO cars at dealerships that were formerly rentals, disclosed as such on CarFax and the title. Don't think selling these as certified vehicles would be profitable if they were all "trashed" and had resulting reliability issues.

 

[cathy63]

That's what I'm thinking too. I know people say that you know you have a car that's been maintained well when it was a rental, but I'm not even sure of that. When they are only going to keep a car for a year or two, do they really do much maintenance? Often it's a driver who notices issues with a car, but how many renters report an issue? Plus you have people driving it who stomp on the gas pedal and brakes, or might do dumb things like drive with the park brake on because they aren't familiar with it. I'll pass.

We bought two used cars from Hertz and Avis many years ago. At that time, their prices were a lot lower than anything other than a cash sale from the want ads, and the cars were in very good condition. Both companies provided the maintenance records as part of the transaction and they had done all the recommended work on time. It's possible they falsified the records, but we're talking about oil changes and tire rotations since these cars were only a couple of years old -- they didn't keep them long enough to need any major work. They also provided a warranty on top of whatever was left of the manufacturer's, so it was in their own interest to prevent problems. We kept both cars for about 10 years, and were happy with them.

Things seem to have changed though. In recent years I've had rentals from both companies that had a lot more miles on them than the ones we bought back then, so I wonder if they're keeping them and renting them out longer. And with all the pricing and inventory information that's available on line, it's a lot easier to find and compare cars. The last few times we've bought a car, the rental agencies haven't even been in the mix for consideration because whatever they had for sale just wasn't as good as the other options.

 

[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.

 

[REWahoo]

I wouldn't buy a Mustang or Camaro from a fleet, but can't imagine a Camry or Minivan getting abused.

+1

 

[cathy63]

Disposing of used rental cars



I see a lot of CPO cars at dealerships that were formerly rentals, disclosed as such on CarFax and the title. Don't think selling these as certified vehicles would be profitable if they were all "trashed" and had resulting reliability issues.

That's interesting! I didn't know you could be buying a former rental even from a regular dealer. I was just thinking of Hertz Car Sales and similar places, where it's obvious that their cars are coming from the rental side of their business. https://www.hertzcarsales.com/

 

[W2R]

This sounds like a terrific opportunity for those members that prefer used cars, and I think that includes most of our members actually.

Personally I don't fit that category. What I want is not a cheap car, but a car that doesn't need repairs and won't ever leave me stranded by the side of the road. I hate that and I hate sitting in repair shops. I don't know anything about car mechanics and have zero desire to learn. I just want my car to be dependable and work when I need it, without any fuss. You know, like my toaster.

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.

 

[pb4uski]

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.

But why?

I don't drive a rental car any different than I do my personal vehicles... they are a way of getting from A to B.

Just because I can get away doing something stupic doesn't mean that I am so juvenille as to do it.

 

[REWahoo]

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]

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.