Hertz files for bankruptcy protection
nytimes.com
nytimes.com
Think of it this way: there isn’t nearly enough demand right now, regardless of whether you (the dealer) discount your inventory or not. I.e., you will not move enough cars to pay for fixed costs like the mortgage on your building, financing the inventory on your lot, etc. The Fed has done various studies on household savings account balances and/or net worth (https://www.valuepenguin.com/banking/average-checking-accoun... and https://abcnews.go.com/US/10-americans-struggle-cover-400-em...). The vast majority of Americans would have to finance a car purchase, even for something like a 10-year old used car. Yes interest rates are low right now, but does it make sense for a consumer to buy a depreciating asset and increase their monthly interest costs at this point in time?
To the car dealer (or rental operation like Hertz), the question is does it make sense to have a fire sale on your inventory now (at prices that will almost certainly lead to an accounting loss), or do you take your chances in bankruptcy court? If you believe that in the next year or two that the market for used cars recovers somewhat, you can sell those assets off during bankruptcy proceedings to pay off creditors etc. There’s a strong case that taking this approach will leave the company as a whole better off in 3-5 years, though equity holders will certainly be taking a huge hit.
At what point do you suspect the "vast majority of Americans"--who apparently can't afford to purchase a 10yo used car outright--start genuinely contemplating the financial impact of asset depreciation and overbearing interest in a strategic manner before signing a purchase agreement...you know, the one with all those legal words for lawyers and such? Call me impractical but...$1,201 just chillin' in the bank, yo!
But when ~20% of working age Americans are living off unemployment benefits, and millions more who work in industries like restaurants, hospitality, and travel facing the possibility that they will likely never have a job to go back to, my guess is that you’d have to be pretty well off (or very optimistic) to take on an additional $100/month car payment, not to mention adding a car to your insurance policy etc. :)
Jokes aside, people who live life along this asymptotic approach are real, where the only conditional that registers is, "the current number in my bank account is still bigger than the number on this bill...which is completely optional 'cause repo ain't gonna find me this time, ha!"
To make a living you either have to get decent margin or huge volume. When both the margin and volume drops you have a problem.
They want me to pick and sign right there under pressure and with no time to read the agreement. I'm almost always left with no real understanding of what happens if I have a crash and pretty worried that I may be liable for more than I'm worth.
It's comical they way they wave those barely readable sheets of paper around randomly circling things and putting crosses in places.
After a while you realize how it works: Use some CDP code to rent for cheap on their website and refuse all the addons that are pushed onto you at pick up (where they are trained to scare you). That clears 99% of the dark patterns
That changed after I became 26. Tons of extra fees and requirements are tossed on younger drivers which turned out to be most of the pain I had with them. Just aging made the rental process so much nicer
And somehow they still looked at me as if I played them..
I do mostly rent my cars through ADAC (German AAA) which usually comes with unlimited miles, no excess insurance(s), young driver benefits, free additional driver, ... and a hotline which just 'works':
Hertz once charged a pretty extra on a prepaid rental. One call to ADAC complaining about the extra charge and I had my money back a week later.
I will. I don't have a car, but sometimes I need it so I typically go to Avis. I had very good experience with Avis almost always. Nice clean cars, friendly personnel, sufficiently convenient website. I frequently get free upgrades to premium or bigger cars.
ZipCar, another car-sharing service I sometimes use is horrible. Dirty cars, annoying stupid website, refuel credit cards almost never work, so I have to use my own and submit refunds.
PS. I know, ZipCar belongs to Avis.
I also despise dark patterns that car rental involves. Fortunately, two things make it easy to rent a car from Hertz (or probably any other major):
1) work for a company that has a corporate rental agreement with Hertz. All the bullshit about collision damage waivers, liability insurance, etc. just goes away.
2) sign up for their "rewards" program (the name differs by company). This puts all your important info into their computers. That way they aren't constantly re-entering info from your drivers license, etc.
3) There is a third option. You should rent trucks instead! :)
Just kidding about trucks being a real alternative. But whenever I rent from U-Haul it's absurdly pleasant, compared to renting cars as an individual. For example, the collision damage waiver for a car rental can be $30 a day or more. The same thing was only $10 on my most recent U-Haul rental.
So they'll be flying into bankruptcy with a golden parachute.
Management staying on to do a more careful windup of the business and protect assets from theft or other losses is probably money well spent.
Well yeah the company is as diseased as it could be - it's dying.
Why would they care what you or their employees think about their culture? The customers are gone and they're firing the employees. They're protecting as much of the investment as is left at this stage.
(And also, Tesla a luxury brand? Seriously?)
Model3 is expensive because it is hype and electrical.
EDIT: your reply is actually making my point (cannot reply anymore so replying here). All the other EV Cars such as the Bolt that nobody would consider luxurious are around the same price.
Maybe you're claiming all the other electric cars like, say, the Buick Velite or the Kia Soul EV have some hype price premium too. I really don't think most non-car people have ever heard of those models though so I doubt they can pump the price based on hype.
To claim it is like a Mitsubishi mirage at 15k is disingenuous.
The electric comes at a premium. The gasoline Kona is 20k and electric is 37. Go drive both for a week, then come back to me and say they handle the same, the acceleration is the same, the experience is the same. You won't because it just isn't...
I've extensively driven hybrid and electric models of the same cars (I have been working in a fleet related car company for years, I have access to hundreds of cars), they are as different as a flip phone and smartphone. This is the broad consensus of the staff ... it's plain and obvious when you can do 500+ miles comparisons, electric vendor X model Y > gas same vendor X model Y ... without exception (well so far at least).
We can drive any car for free (we keep at excess capacity, kinda how the supply systems work), nobody on staff rolls off with a gas car these days. Conservatives, liberals, doesn't matter, EV is just better tech.
I still claim the iphone of the electric isn't here yet. Tesla is a good blackberry, but there's something else coming ... don't know when don't know from where but the trajectory is obvious. Even the 2015 -> 2020 improvements are like moore's law level strides ... it's certainly coming soon.
You can be a late adopter on moore's right hand side of the chasm curve and be a holdout for a while, I know I am ... that's fine ... but the gears are already spinning on this one.
The base msrp is about 16k on that class, the tesla 3 is 40k.
That's 2.5 times more expensive. Substantial difference.
Just wouldn't work though with the baggage from the rest of the existing business.
To me the Toyota range is like this:
- Yaris: compact
- Corolla: mid sized
- Camry: full size
Car categories have agreed-upon definitions; what rental companies call them is usually a size up or two from the manufactuer's (canonical) names.
For Toyota, the Yaris is sub-compact, the Corolla is compact, the Camry is mid-size, and the Avalon is fullsize. For Chevy, the Spark, Sonic, Malibu, and Impala fill the same roles. For Honda, it's the Fit/Civic/Accord (they don't make a full-size). For Nissan, it's the Versa/Sentra/Altima/Maxima.
One time I had the option in the lot between a Malibu and Impala, and figuring out which one was "better" in person was pretty tough. The overall length difference per Chevy is 7 inches, which seemed largely irrelevant in person. I guess if it all went to the back seat leg room then you have a distinction for a certain market.
For reference, Sonic can be up to 35 inches shorter than a Malibu (depending on style).
For a personal car I get it, as a bigger car is able to carry more people/objects but for a business trip I typically only have a small suitcase.
Every time I was given full size while on business I almost felt like it was a hassle more than anything else. It is more difficult to park in tight spots if I end up going to city centers.
I rented extensively when I was in management consulting and put 30k miles annually driving home on weekends. I can be a safe driver, but i'm also put at risk by other drivers who are not safe drivers. In those cases, you want physics working for you.
A more detailed answer: https://qr.ae/pNyaFd
I get your safety concerns but why for the highway? There are no cars coming from the other direction so accident risk is pretty small. At least in Europe accident are way more common in cities then on high speed Autobahns.
On highways, at least in the US, the average speed is 65-70mph. You'll see some drivers doing 90 or more regularly. At 90mph, if you are in a compact car, if a truck or SUV hits you, there is a high chance of major injury or death.
You are right there are no cars coming from the other direction, but i've seen cars get bumped from the back, then spin. I've seen cars bumped from the corner by a driver who clearly did not check their blind spot, and the small car spins.
The small car is at a huge disadvantage, especially in the US where there are massive trucks and SUVs all over the highway. There is also bullying by bigger cars/trucks on highways where they expect small cars to get out of the way and/or drive defensively.
https://www.quora.com/Are-smaller-cars-necessarily-more-dang...
Ride quality, comfort and features usually go along with vehicle size. I've also heard that taller/wider people have problems fitting into smaller cars.
It's an upsell. If you perceive it as better, it's useful to you. But, if you like small cars, they are annoying to park and the clerk will give you a funny look when you say you like the small car better.
https://www.caranddriver.com/features/a15118822/taking-the-h...
All this to say, at the pricing I've seen there is very little reason for someone renting a car to choose to rent a compact. The rental company can always upgrade people who booked a compact into a larger car, but if you have too many compacts you're screwed.
I can think of roughly 2 MM possible reasons[1] in conjunction with 1 regulatory constraint[2] that might suggest an investment in a fleet of compacts may not have been an entirely reckless business decision at the time...not that I would have swallowed that pill myself...just saying.
[1] https://en.wikipedia.org/wiki/United_States_Department_of_De...
[2] https://www.defensetravel.dod.mil/Docs/perdiem/JTR.pdf Ref. § 020209
My whole point is that a lot of what goes on in rental doesn’t make sense unless you view it at as a business that generates used cars.
However, I doubt you really care and were more interested in making a pedantic point about how contracts are voluntary agreements between rational actors.
I guess maybe a Navigator depreciates more quickly than a Camry, and that's what you're paying for, given the rapid turnover of their fleets?
For SUVs, usually it's been considering a ski trip or something, so, yeah, I can see where people are "stuck".
I use Sixt whenever I can because they actually have nice european cars. Hit or miss in the US (I once got a Camry when I was trying to get an Audi A3; the Camry's a bigger car of course but I don't need a big car).
Flew into Seattle once, got a massive brand-new Volvo S90 sedan with all the bells and whistles for like $60 a day, same price other places wanted to charge me for a Camry. I'm sure if I had asked for a Cadillac from Hertz it would have been $400+ a day, and less desirable to me. shrug
It's rare but it happens. It does show that they usually rent out of that stock though at the crazy prices you do see, otherwise you'd expect to see those cut-rate deals more.
They often seem surprised when I turn them down when renting.