Hertz Is Selling Thousands of Used Cars In Its Fleet In Bankruptcy at Bargain Prices
Weeks after filing for Chapter 11 bankruptcy protection May 22, Hertz use cars is selling vehicles in its fleet at discount prices.
As of Saturday morning, Hertz had thousands of used cars available on its website HertzCarSales.com. The volume of cars for sale in an area depends on the location used in the search, and vehicles are delivered free up to 75 miles.
The coronavirus pandemic forced several companies strained before the crisis to file for bankruptcy to try to survive. J.C. Penney, Neiman Marcus and Tuesday Morning are among the chains that filed for bankruptcy since the start of the pandemic. Hertz competitor Advantage Rent A Car filed for court protection from its creditors May 26.
Hertz’s fleet consists of roughly 700,000 rental cars, which have greatly diminished in value because of a sharp drop in used car prices caused by a freefall in auto sales stemming from the pandemic.In a search on the Hertz website within 1,000 miles from Fort Lauderdale, Florida, there were more than 23,500 cars available Saturday. A 2017 Hyundai Elantra SE Sedan with nearly 71,000 miles was selling for $7,597 – $1,740 below market price, according to website iSeeCars.com.
A search within 1,000 miles of Beverly Hills, California, had almost 21,000 cars available Saturday.
Outside the 75-mile radius for free delivery, fees vary. Delivery of 76 to 200 miles costs $300. Within 600 to 800 miles, the cost is $1,000, Hertz says on its website.
Hertz bankruptcy stock sale
Hertz Global Holdings racked up more than $24 billion in debt by the end of March, according to its bankruptcy filing, with only $1 billion in available cash.
Starting in mid-March, the company – whose car rental brands include Dollar and Thrifty – lost all revenue when travel shut down during the coronavirus crisis. The company made “significant efforts” but couldn’t raise money on the capital markets, so it started missing payments to creditors in April, the filing said. Hertz has been roiled by management upheaval, naming its fourth CEO in six years May 18.
In late March, Hertz shed 12,000 workers and put 4,000 on furlough. It cut vehicle acquisitions by 90% and stopped all nonessential spending. The company said the moves would save $2.5 billion per year.
Friday, bankruptcy court approved Hertz’s request to sell 246.8 million unissued shares to Jefferies to raise up to $1 billion in new equity.
filed for bankruptcy protection
hertz car sales