Bankrupt Hertz (HTZ) is offloading vehicles within its rental fleet for cheap as it looks to reduce its $24 billion debt load and preserve cash.
Hertz filed for Chapter 11 in mid-May amid the coronavirus pandemic. The rental car chain saw sales plummet as travelers stayed home during the COVID-19 crisis. At the time of its bankruptcy filing, Hertz reportedly had about $1 billion in cash on hand.
In March, Hertz laid off 12,00 workers and furloughed 4,000 employees. It cut its plans to acquire new 2020 vehicles by 90% and said it was cutting on nonessential spending, which was estimated to save the company $2.5 billion per year.
Hertz is selling the vehicles on its website HertzCarSales.com, where thousands of models are available at a discounted rate. For example, a 2019 Ford Fiesta SE sedan with 41,804 miles was selling for $9,940 while a 2019 Kia Rio S Sedan with 33,950 miles was priced at $11,990, both reduced from Kelly Blue Book average market price of $12,466 and $12,925, respectively.
For the vehicles it has on sale now, car buyers can have them delivered to their home free up to 75 miles. Within 200 miles, the cost is $300 for delivery, and within 600 to 800 miles, the cost is $1,000, Hertz’s website said.
Previously, Hertz had posted several 2019 Chevy Corvette Z06s at a discounted rate with its yellow and black livery as it looked to pare down its vehicle portfolio.
Hertz rental fleet is comprised of about 700,000 rental cars, which have significantly decreased in value due to a drop in used car prices caused by the coronavirus, USA Today reported.
Hertz shares were trading at $1.90 each at 2:52 p.m. EDT, down over 33% from opening price of $2.19 on Monday.