Hertz Global Holdings Inc (NYSE:HTZ) filed for bankruptcy under Chapter 11 of the Bankruptcy Code and announced the sale of vehicles from its rental fleet at an impressively low price for buyers.
The company posted thousands of its used cars for sale on its website, and the vehicles are being offloaded at heavily discounted prices. Hertz has currently listed more than 20,000 used cars for sale on the website, including SUVs, trucks, and sedans. To put to perspective just how affordable the vehicles are going for, a 2017 Hyundai Elantra SE that has covered 71,000 miles is going for $7,597. This is lower than the current market price by around $1,740, making it a great deal.
Great deals for used car buyers
The impressively low price tag means that anyone looking to purchase a used car is in for a great deal from Hertz. One would be hard-pressed to find a better deal. Interestingly, the vehicles available for sale on the Hertz website are not particularly old. Most of them were manufactured in 2017 and up, which means that customers will be purchasing vehicles that are less than five years old.
Most car rental companies constantly upgrade their fleet as a strategy for customer retention. This means that the vehicle turn-over is high and so they usually do not have old vehicles. This is why the vehicles that Hertz is currently selling are considered used but still in relatively new condition.
Hertz is one of the companies that have taken a heavy hit due to the coronavirus pandemic. Vehicle rentals have gone down drastically for the past three or so months as people heeded to the stay-indoors’ directives. The company has also stopped purchasing new vehicles and slashed non-essential cash outflows.
The company aims to raise capital through vehicle sales so that it can offset its debt. Hertz was granted the Bankruptcy Court’s approval to offload 246.8 million unissued shares as part of its plan to raise $1 billion in equity as part of the company’s plan to boost its business. The shares will be sold to Jefferies LLC.