Here’s what you should know before buying a former rental car from bankrupt Hertz
Rental car agency Hertz, slammed by the steep drop in demand after the coronavirus pandemic shut down most U.S. travel, has been selling its rental cars at significant discounts since filing for Chapter 11 bankruptcy protection on May 22.
More than 50,000 Hertz cars are displayed on the company’s website with no-haggle prices ranging from a few hundred dollars to several thousand dollars below traditional dealers’ average market prices.
Incentives include free delivery to your home of any car located within 75 miles for buyers who select a vehicle and complete their paperwork online. Fees apply for home delivery from greater distances.
But the great deals aren’t always as clear-cut as they might seem.
So it pays to look under the hood and consider some less obvious factors before heading to the Hertz lot:
■Not every car on Hertz’ website is priced at an amazing discount. Small economy cars, for example, don’t seem to be priced much lower than at traditional dealers. A 2019 Kia Rio S with 30,467 miles is listed at $10,093 at Hertz’ North Palm Beach dealership, while a Hialeah dealer lists the same make and model with 32,086 miles at $9,995. You should compare prices at sites like iSeeCars.com or Kelly Blue Book before taking Hertz’ word that its price is a bargain.
■Bigger discounts can be found on luxury cars. According to iSeeCars.com, most Hertz cars with the deepest discounts are luxury cars that weren’t rented as often because their rental rates were highest. These include BMW 7 Series (priced at $42,680 — $6,877 below average prices at traditional dealers); Mercedes Benz A-Class ($28,555 — $4,252 below average); and Infiniti QX50 ($27,760 — $4,145 below average).
■That $7,597 price for the 2017 Hyundai Sonata base sedan with 88,982 miles at Hertz’ Plantation dealership isn’t really $7,597. All of the no-haggle prices at Hertz’ website exclude an up-to $799 “dealer document” fee. Of course, that’s also before sales taxes and fees for tags, taxes and registration. Most dealers charge similar fees, so it’s not just the Hertz cars that exclude those fees from their listings.
■It might pay to wait for Hertz to sweeten the pot. Hertz’ average discount for its off-rental vehicles increased between April and May, from $969 below average market prices to $1,389 below average market prices. That makes sense since the company has been hemorrhaging red ink since the pandemic began and is desperate to generate cash flow now. As the company works with its creditors to reorganize its debt, some analysts predict it will offer more of its cars for sale, and those discounts might be even bigger, says Julie Blackley, spokeswoman for iSeeCars.com.
■Smaller off-rental cars tend to have been driven more. That’s because renters want to pay as little as possible, making these cars the workhorses of the fleet. Higher miles could mean components are more likely to need replacement more quickly, reducing the benefit of the lower initial price.
■High-mile rental cars might have been driven by hundreds of customers, and there’s no way to know how aggressively they treated them. But that’s also true of off-lease vehicles that was only driven by a single lessee, Blackley says. She suggests ensuring any car comes with detailed maintenance records that show it was well cared for. On the positive side, former rental cars tend to be in better shape aesthetically, as drivers are more careful not to get dents or scratches.