Hertz Dumps Fleet Of Corvettes While Trying To Avoid Bankruptcy

A tidal wave of supply is hitting the used car market as insolvent rental car companies are forced to liquidate fleets to avert bankruptcy or, if past the default Rubicon, repay creditors during bankruptcy proceedings. Case in point: soon to be bankrupt rental car giant Hertz is dumping a fleet of sports cars on the used car market at significant discounts as it scrambles to build up a liquidity war chest

Hertz Corvette Z06 listings on AutoTrader

First spotted by Jalopnik, Hertz has flooded the used car market with a fleet of 2019 Chevrolet Corvette Z06s, selling at significant discounts to Kelley Blue Book fair value. Some of the Vettes have made it onto AutoTrader, selling between $58,995 to $63,295, far below the Kelley Blue Book's $76,938 to $85,275 fair value range. Below is a chart showing the Kelly Blue Book value of 2019 Chevrolet Corvette Z06s vs. Hertz's liquidation price 

In short, this is the start of a firesale by the distressed rental car company, and once Hertz is forced into bankruptcy  creditors could liquidate even more of its fleet. So you ask, just how many rental cars Hertz has in its entire fleet? Well, Jalopnik provides the answer below: 

"Used car prices fell 34.4 percent in April, according to the Detroit Free Press, and used car dealers are cutting back on building up inventory. While the Freep says that used car prices could go up soon due to a shortage of new cars caused by plant closures, there is another factor to consider: The more than half a million cars currently sitting on beleaguered Hertz Car Rental's books." 

Meanwhile, Coronavirus has crushed the Manheim Used Vehicle Value Index.

Hertz is not the only rental car company slammed because of coronavirus related shutdowns, Avis and Enterprise are also suffering, seeking help from the Treasury Department for loans, tax breaks and other types of support.

As for the "tidal wave of supply" that could drown the used car market -- we noted last week rental car fleets are piling up in parking lots across the US:

About 2,200 Enterprise rental cars are parked at the Wells Fargo Center in South Philadelphia
Aloha Stadium's parking lot has become the temporary home to 1,000 to 1,500 rental vehicles on Oahu that have become idle because of the novel coronavirus pandemic.
Hundreds of rental cars are being temporarily parked at Dodger Stadium as travel continues to constrict amid the coronavirus pandemic.

And the unpleasant truth is that distressed rental car companies dumping vehicles onto the market could result in a further collapse in used car prices.