Avis Budget said it expects its fleet in the Americas will be reduced by 20% by the end of June, compared to a year earlier. Avis Budget said it already cut its US fleet by 35,000 in the first half of March.īut it clear as used car sales channels gets back to normal, so will plans by the rental car companies to slash the size of their fleets. The difficulty in continuing to sell cars is one of the reasons it cited as the cause of its bankruptcy filing. Hertz said it has sold 41,000 cars from its US fleet and another 13,000 cars in Europe in early March, but that the halting of used car auctions and closure of many used and new car dealerships essentially brought sales to a halt. Want to buy a used car? Rental car companies are offering up some good deals
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NEW YORK, UNITED STATES - 5: Car rental AVIS parking lot is full since there are no customers during COVID-19 pandemic at JFK airport. He said it’s tough to know how deep the cuts will be. There are likely to be at least hundreds of thousands of rental cars sold into the used car market said Zo Rahim, manager of economic and industry insights for Cox Automotive. And they need the cash,” said Jeff Schuster, president of global forecasting for automotive research firm LMC. The companies are likely to sell off a significant portion of the estimated 1.5 million cars they have in their US fleets in the weeks and months to come, according to experts. The parking lots at Southern California sports venues like Dodgers Stadium and Angel Stadium are packed with rental cars, giving them the look of sellouts even without games being played, recent photos in the Los Angeles Times showed.īut those cars won’t stay there. Robert Gauthier/Los Angeles Times/Los Angeles Times via Getty ImagĪnd even with that near halt in purchases, both companies, along with privately-owned Enterprise, are stuck with literally hundreds of thousands of unneeded cars. Thousands of rental cars are stored at Angel Stadium of Anaheim, a sign of the plunge in demand for rental cars. It said in March it cut its new car purchase plans for the rest of the year by 80%. (CAR) is in better financial shape but it is also losing money. It had missed payment in April to a group of lenders who hold the leases on most of its US fleet.
(HTZ), which filed for bankruptcy late Friday night, had already said it doesn’t intend to buy any more cars this year. Halting car purchases, selling off cars from fleets So the rental car companies are dire straits. But with driving way down, accidents are also down so much that insurance companies have voluntarily returned more than $7 billion in premiums to customers. With flying down 94% in April and May, according to data of people passing through TSA checkpoints, there are far fewer people needing to rent cars.Īnd much of the non-airport business comes from customers whose cars were involved in accidents, with insurance companies paying some or all of the rental bill. Far from it.īut rental car companies get two-thirds of their revenue from airport locations. And that’s another blow for the already struggling auto industry.ĭuring normal times rental car companies account for 10% or more of US new car sales – an estimated 1.7 million to 1.9 million cars purchases last year. The nation’s rental car companies are in deep trouble.
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