The Hertz bankruptcy saga is still ongoing. Not only does the company have to pay lenders $650 million to remain afloat, it now has until the end of the year to sell off nearly 200,000 vehicles. How this will impact the used car market going forward isn’t so clear.
Hertz will be required to “...dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020,” as Carscoops reports citing a filing with the Securities and Exchange Commission. That is a lot of used cars. As to whether or not this inventory dump will cause a price drop in the used car market is another story and will depend on a variety of factors.
Currently, inventory shortages on new cars are causing folks to pivot to pre-owned vehicles, creating a bit of a “seller’s market” for car buying right now. In the short term, these cars are going to sell. It won’t be hard to find buyers for the cars that Hertz will either sell itself, and dealers desperate for inventory will nab whatever Hertz pushes onto the wholesale market. A lot of car buyers economically impacted by Covid still need a car, and are looking for more affordable used options like former rental vehicles.
However, new car inventory could stabilize over the next few months. As Hertz continues to clear out its fleet, the dynamic could shift again to suppression of used car values. Of course, there is also the larger economic situation to consider such as how rising unemployment and a potential second wave of the pandemic could impact car sales.
As we covered in previous posts, buyers looking for used car values and relatively hassle-free experience should consider checking out the Hertz fleet as you can find deals on a variety of vehicles from Nissan Sentras to special edition Corvettes.