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Rental car companies plan to sell of much of their fleet to recover costs during pandemic
Later this summer, there may be more used cars for sale than ever before due to a lack of travel during the coronavirus pandemic.
PHOENIX - Later this summer, there may be more used cars for sale than ever before due to a lack of travel during the coronavirus pandemic.
And with rental car company, Hertz, filing for bankruptcy, those cars have to go somewhere.
Industry experts said the supply of cars is already "huge," so there’s no need to wait to begin selling. The prices should be good too, but don’t expect them to bottom out.
Javier Olivas owns All J's. His company cleans and details many of the Phoenix-area rental cars before they’re ready to be sold.
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"All these rental car companies, they have cars they don’t know what to do with, so they got cars in all the empty lots and the cars are just sitting there," he said.
The Chapter 11 bankruptcy filing of Hertz last week will only add to the supply of used cars for him to touch up.
The filing means Hertz will try to stay afloat while restructuring so they won’t ditch all of their fleet, but many will be headed to used car lots.
"Anytime here and going forward is a good time to buy used vehicles because there are a lot of them," said Michelle Krebs, executive analyst at Cox Automotive.
The cars won’t hit the market all at once to protect their value, she said. But there’s already a surplus, and many people leasing cars have put off returning them during the last few months.
"Those leases will be expiring this summer so those will be going back on the market too. There’s going to be a tremendous amount of choice in all price ranges for consumers looking to buy a used vehicle this summer," Krebs explained.
According to data from the Manheim Automotive Index, used car prices dropped 11% last month before rebounding to a 4% drop this week.
Krebs says you can expect a good deal, but be reasonable when negotiating.
It’s unclear when any rush of cars could hit the Phoenix market this summer, but Cox Automotive predicts six months from now, the supply the used cars on the market will be unprecedented.