Last month, Hertz filed for Chapter 11 court protection, giving time for the company to devise a plan to pay off its creditors---the biggest names of which are IBM Corp. and Lyft Inc.
This is, of course, an indirect effect of the current coronavirus pandemic, choking both leisure and travel industries, which, in turn, took out the demand for car rentals.
Unlike most car rental companies, which come up with a buyback guarantee with automakers in order to fill their fleets, Hertz buys its cars. In times when demand dwindles, Hertz resolves to sell its cars on its own used car website, Hertz Car Sales.
The bankruptcy, of course, is no different from the usual demand decline the company experiences. Only this time, the profits from the sales will go to pay Hertz's creditors. There's one more problem, though---the used car market is also experiencing the adverse effect of the pandemic with plummeting prices.
Alas, Hertz used cars is also experiencing the price drop. A recent May study from iSeeCars shows the market value of used cars from the Estero, FL-based company is well below the average market value.
The study also reports Hertz used vehicles for new models are now selling $1,389 below market value on average, which is 43.4% bigger than the average discount in April ($969.) Case in point: the BMW 7 Series is now 13.7% below market value, with an average price of $42,680, amounting to around $6,877 in savings.
The Bimmer is just one of the examples, but if you're in the market for used cars right now, Hertz could very well be the place to shop. Besides, the company is also offering a home delivery service, a very handy service especially in these tough times.