Looking for a car?
Over the weekend, Hertz had thousands of used cars posted for sale on its website HertzCarSales.com. Using the search function, buyers can find a volume of cars in their area that can be purchased and delivered for free up to 75 miles. A 2017 Hyundai Elantra SE Sedan with almost 71,000 miles was selling for $7,597, which was $1,740 below market price, according to iSeeCars.com.
Hertz managed a fleet of 700,000 rental cars, which are all worth a lot less now, thanks to a sharp drop in demand caused by the coronavirus.
On May 22, Hertz filed for Chapter 11 Bankruptcy Protection. As the pandemic drastically reduced global travel, demand for Hertz's rental cars plummeted and the 102-year-old business racked up debt. Unable to get another extension from lenders for their auto lease debt payments, Hertz filed in U.S. Bankruptcy Court in Delaware.
To clarify, they aren't going out of business—a release from the company affirms that Hertz will continue to operate (their main international operations and franchises weren't included in the filing either). It's more of a restructuring and tightening of the belt.
Of their 38,000 employees in the U.S.,12,000 have lost their jobs and 4,000 have been furloughed, according to reports. In March alone they sold 54,000 of their 700,000-car fleet. Hertz intends to cut new purchases by 80 percent.
Hertz CEO Paul Stone told Forbes,
"With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery. Today's action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future.”
Any intention of checking out their car sales? Do you use Hertz services often? Comment below!