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Why Are Hertz Cars So Cheap? This is why

If you are not already familiar with them, Hertz is a car rental company. Based in Estero, Florida, the company currently owns 12,000 corporate and franchise locations across 160 countries and is rated as the best car rental company according to J.D Power’s North America Rental Car Satisfaction Study in 2019. Although their customers enjoy many great features, the leading factor in their high satisfaction ratings is their prices, but why are Hertz cars so cheap?

Hertz is a car rental company that—because of marketing tactics from carmakers, bulk purchasing options, the fact that the car is driven by multiple owners over many miles, and excess inventory—are able to offer their used cars at a significantly reduced price.

Let’s take a closer look at America’s number one car rental company.

Hertz car sales lot

Is Hertz a Good Car Rental Company?

Hertz opened in 1918 when, at the age of 22, Walter Jacobs started the company with just 12 Model-T’s. Since then, they have grown to become one of the largest car rental companies in the United States, and there is a reason for that.

Hertz boasts one of the highest customer satisfaction ratings of all car rental companies, which is influenced by their reasonable rates and wonderful customer service. In fact, Hertz is currently ranked number one in customer satisfaction by J.D Power.

How Much Does It Cost to Rent from Hertz?

The final price of your rental will depend on the location in which you rent the vehicle, the type of vehicle that you rent, how long you have the car, how many miles you drive the car, and other individual factors.

However, Hertz offers a “Best Rate Guarantee”, and will match any offer for a cheaper rental that you find with another company and give you an added 10% off. This ensures that you always get the lowest price with Hertz, but it is worth noting that this is only available during select times and may not be available during holidays or other times when rental sales are high.

Below is a list of prices from various Hertz rental companies across the United States. These prices may vary depending on the location, but they will show you the average price that you can expect when renting from Hertz. 

Type of CarPrice Per Day
Economy – 2 Adults – 2 Bags$42/day
Compact – 4 Adults – 2 Bags$42/day
Intermediate – 5 Adults – 3 Bags$45/day
Standard – 5 Adults – 3 Bags$49/day
Full-Size – 5 Adults – 2 Bags$49/day
Minivan – 5 Adults – 5 Bags$94/day
Full-size SUV – 5 Adults – 2 Bags$72/day

Source: Kayak.com

Does Hertz Sell Cars?

Like any other business during the recent pandemic, Hertz took a massive hit on its sales. Because people were being told to shelter in place, and so many other businesses and workplaces were closed, people were simply not renting cars as often. This content is owned by moc.sotuaytsur. Hertz decided to supplement their lost income by selling fleets of cars at discounted prices. In fact, some dealerships were selling used models at up to 70% off their new price.

Why Are Their Cars So Cheap?

Although many factors affect the value of a vehicle, there are a certain number of special factors that contribute to the low price of Hertz cars.

Car rental lot

They Buy in Bulk

Have you ever visited a big box store that sells everything in bulk? Yeah, you might have to buy thirty rolls of paper towel instead of one or two, but you end up saving a significant amount of money on each roll. Because Hertz is such a large company, with a high demand for vehicles and money to back up a big purchase, they can do the same thing with cars. The company will buy entire fleets of vehicles, and because they spend less on each vehicle, they can offer them at a much lower price to the public.

They Buy Neutral Colors

Buying colors that are popular among all car buyers is a good way to ensure the vehicle will continue to be rented. For example, a fleet of bright pink vehicles would likely not rent as much as a fleet of the same vehicle in black. Bright pink is considered a customized color, and it would only interest a small amount of their customer base. By buying popular colors that are guaranteed to rent more often, the car pays for itself.

Extended Test Drives

Car companies use multiple tactics to get their products seen by the public and one of these is to include their vehicle in the fleets of the more popular rental companies. They know that customers are using these vehicles for everyday tasks, rather than simply driving them down the street, and can get a better feel for how useful the car could be in their everyday life. For this reason, car companies will offend offer certain discounts to popular rental companies.

Excess Inventory

One of the jobs within a dealership is to predict what the customers want. What colors will be most popular? What add-ons might they ask for more often? Then, because drivers typically want to leave the lot that day with their new purchase, they try to have these combinations in stock. However, not all of these customized cars sell, and when that happens companies like Hertz can get them at a much-reduced price.

The Nature of Being a Rental Company

Finally, they are sold at a discounted price to make up for the number of “owners” each car has had, the number of miles it has been driven in a short period, and the fact that it is registered as a fleet vehicle.

Did Hertz File for Bankruptcy?

Hertz did file for bankruptcy after taking a bit of a financial hit during the Coronavirus Pandemic. Among the many people who use Hertz rental services, business travelers make up a large percentage of the company’s customer base. People who travel for business often rent cars for multiple days at a time and become repeat customers. So, when the pandemic forced many businesses to allow people to work remotely from home, Hertz took a massive financial hit.

Moreover, the pandemic forced companies to conduct a large-scale experiment surrounding remote work, and many realized that a lot of their positions can be done from home. This could potentially reduce the number of business travelers in the future, which could continue to affect Hertz financially.

Because of this financial crisis, Hertz filed for chapter 11 bankruptcy in 2020. However, they recently emerged from bankruptcy, a year later in 2021, when the company was able to secure 1.6 billion dollars (about $5 per person in the US) in financial contributions, in addition to the money they raised by selling fleets of used vehicles.

So, while the company did file for bankruptcy, they are slowly climbing out of the financial hole Covid created and getting back on track, which means their signature black and yellow won’t disappear from the market anytime soon!

If you choose to buy a used car, it’s worth investing a few dollars to check the VIN number against the vehicle database. An audit with a company like VinAudit (links to VinAudit) will guard against Mileage fraud, Salvage rebuilds, Title washing, Vin cloning, and a ton of other uglies.

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