Hertz is declaring bankruptcy

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gasdoc
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Hertz is declaring bankruptcy

Post by gasdoc » Sat May 23, 2020 8:31 am

Hertz is declaring bankruptcy. What does that mean if one has a rental reserved for later in the year? Will it be honored? Will a refund be given? Does anyone have experience with this? Hertz has several brands that it owns, including of course Hertz, and also Dollar, Thrifty, and others.

https://www.cnn.com/2020/05/22/business ... index.html


gasdoc

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Rob5TCP
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Re: Hertz is declaring bankruptcy

Post by Rob5TCP » Sat May 23, 2020 8:43 am

First depends what type of bankruptcy they pursue.

Worst case, get it reversed from your credit card.
All credit cards allow you to reverse a charge under
certain circumstances.

Sconie
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Re: Hertz is declaring bankruptcy

Post by Sconie » Sat May 23, 2020 9:02 am

Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Cheez-It Guy
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Re: Hertz is declaring bankruptcy

Post by Cheez-It Guy » Sat May 23, 2020 9:03 am

Oh no! My Gold Plus Rewards!

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Watty
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Re: Hertz is declaring bankruptcy

Post by Watty » Sat May 23, 2020 9:16 am

That is interesting.

I once bought a Camry from the Hertz used rental car lot and I had a good experience with it. Since then I periodically check their inventory and prices out of curiosity and would sometimes see good deals that would look tempting,

In the last few months they have had lots of inventory but their prices have been very high which sort of surprised me since I would have thought with so little rental car demand because of the pandemic that they would have been trying to reduce their inventory of cars. That could be because they were edging towards bankruptcy.

Anyway it will be interesting to see if their used car prices drop because of the bankruptcy since there could be some good deals on used rental cars.

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Re: Hertz is declaring bankruptcy

Post by whodidntante » Sat May 23, 2020 9:16 am

From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P

smalliebigs
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Re: Hertz is declaring bankruptcy

Post by smalliebigs » Sat May 23, 2020 9:19 am

Thank goodness my rewards points are with Avis.

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Re: Hertz is declaring bankruptcy

Post by Clever_Username » Sat May 23, 2020 9:23 am

Sconie wrote:
Sat May 23, 2020 9:02 am
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Yes. A friendly reminder to all that bankruptcy doesn't mean "company is kaput" but rather that they are reorganizing their finances.
whodidntante wrote:
Sat May 23, 2020 9:16 am
From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P
No apology needed, this was fantastic and I am going to use it.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

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Re: Hertz is declaring bankruptcy

Post by Seasonal » Sat May 23, 2020 9:27 am

Cheez-It Guy wrote:
Sat May 23, 2020 9:03 am
Oh no! My Gold Plus Rewards!
Travel related companies tend to continue to honor points when they go through reorganization in bankruptcy.

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2pedals
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Re: Hertz is declaring bankruptcy

Post by 2pedals » Sat May 23, 2020 9:32 am

That's gotta hertz!

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Re: Hertz is declaring bankruptcy

Post by bob60014 » Sat May 23, 2020 9:51 am

Hertz....just part of the cycle! :)

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Re: Hertz is declaring bankruptcy

Post by DaftInvestor » Sat May 23, 2020 9:53 am

Refund? Did you pre-pay?

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Watty
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Re: Hertz is declaring bankruptcy

Post by Watty » Sat May 23, 2020 9:54 am

bob60014 wrote:
Sat May 23, 2020 9:51 am
Hertz....just part of the cycle! :)
If you do buy a used car from them you may need someone to cosign for the loan.
Clever_Username wrote:
Sat May 23, 2020 9:23 am
Sconie wrote:
Sat May 23, 2020 9:02 am
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Yes. A friendly reminder to all that bankruptcy doesn't mean "company is kaput" but rather that they are reorganizing their finances.
True, many bankruptcies are called strategic bankrupts that are intentional to allow the company to get out of leases, union contracts, and pension obligations. We are likely to see a lot of those.

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Re: Hertz is declaring bankruptcy

Post by jhfenton » Sat May 23, 2020 9:56 am

gasdoc wrote:
Sat May 23, 2020 8:31 am
Hertz is declaring bankruptcy. What does that mean if one has a rental reserved for later in the year? Will it be honored? Will a refund be given? Does anyone have experience with this? Hertz has several brands that it owns, including of course Hertz, and also Dollar, Thrifty, and others.

https://www.cnn.com/2020/05/22/business ... index.html

gasdoc
Do folks routinely prepay for car rentals? I make reservations, but for me that is always something paid for at time of service. I don't think I've ever paid for a car rental in advance.

I checked my reservations for the fall, and although I most often use Enterprise, my late September rental is with Avis and my December rental is with Alamo. I don't have any Hertz, Dollar, Thrifty or Firefly rentals that might be affected by the bankruptcy.
Last edited by jhfenton on Sat May 23, 2020 9:58 am, edited 1 time in total.

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JoMoney
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Re: Hertz is declaring bankruptcy

Post by JoMoney » Sat May 23, 2020 9:57 am

If you pre-paid you might have a problem.
Otherwise, I've never heard of any kind of fee related to canceling a rental car reservation. Even if they go bankrupt, I would wager the company/brand and it's remaining assets will re-emerge as a functioning rental car company (just without the debt, and with new 'owners').
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

jhsu802701
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Re: Hertz is declaring bankruptcy

Post by jhsu802701 » Sat May 23, 2020 9:58 am

If Hertz goes under, does that mean we'll all have to rent from Not Exactly Hertz? The Not Exactly Hertz commercials were the best car rental commercials of all time.

https://www.youtube.com/watch?v=OmLtaJjfz2Y
https://www.youtube.com/watch?v=EuOHHA0KTww
https://www.adforum.com/creative-work/a ... boss/hertz
https://www.adforum.com/creative-work/a ... race/hertz
https://www.adforum.com/creative-work/a ... nson/hertz

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JoMoney
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Re: Hertz is declaring bankruptcy

Post by JoMoney » Sat May 23, 2020 10:00 am

jhfenton wrote:
Sat May 23, 2020 9:56 am
gasdoc wrote:
Sat May 23, 2020 8:31 am
Hertz is declaring bankruptcy. What does that mean if one has a rental reserved for later in the year? Will it be honored? Will a refund be given? Does anyone have experience with this? Hertz has several brands that it owns, including of course Hertz, and also Dollar, Thrifty, and others.

https://www.cnn.com/2020/05/22/business ... index.html

gasdoc
Do folks routinely prepay for car rentals? I make reservations, but for me that is always something paid for at time of service. I don't think I've ever paid for a car rental in advance.
FWIW, the only time I've done this is through PriceLine.com and maybe a similar site, where they offered special deals on a car rental, but you have to pre-pay and you don't know which company it's through in advance.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Hertz is declaring bankruptcy

Post by Stinky » Sat May 23, 2020 10:23 am

whodidntante wrote:
Sat May 23, 2020 9:16 am
From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P
[ quote of removed post removed by admin LadyGeek]
bob60014 wrote:
Sat May 23, 2020 9:51 am
Hertz....just part of the cycle! :)
2pedals wrote:
Sat May 23, 2020 9:32 am
That's gotta hertz!
Who would have thought that the Forum was a site for aspiring stand-up comedians?

Please, keep the jokes coming. :D
It's a GREAT day to be alive - Travis Tritt

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Re: Hertz is declaring bankruptcy

Post by Flyer24 » Sat May 23, 2020 10:32 am

Let’s stick with the questions posed by the OP and stay on topic.

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Cheez-It Guy
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Re: Hertz is declaring bankruptcy

Post by Cheez-It Guy » Sat May 23, 2020 10:57 am

Seasonal wrote:
Sat May 23, 2020 9:27 am
Cheez-It Guy wrote:
Sat May 23, 2020 9:03 am
Oh no! My Gold Plus Rewards!
Travel related companies tend to continue to honor points when they go through reorganization in bankruptcy.
Thanks! No way you would have known, but that was a bit of a joke. I don't have many of any built up, and they're basically worthless.

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Re: Hertz is declaring bankruptcy

Post by Helo80 » Sat May 23, 2020 10:59 am

gasdoc wrote:
Sat May 23, 2020 8:31 am
Hertz is declaring bankruptcy. What does that mean if one has a rental reserved for later in the year? Will it be honored? Will a refund be given?

I generally book directly through Hertz as they had the best rates (sometimes used insurance discount, but booked directly thru Hertz). If I'm not mistaken, those fares are always refundable up until like 24 hours before.

CFM300
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Re: Hertz is declaring bankruptcy

Post by CFM300 » Sat May 23, 2020 11:46 am

jhfenton wrote:
Sat May 23, 2020 9:56 am
Do folks routinely prepay for car rentals?
I prepay if it results in a better price. I once prepaid for a small SUV on Hotwire because it was available for $1.18 per day. I have no idea what caused that pricing anomaly, but I kept the vehicle for an entire summer at that rate.

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Re: Hertz is declaring bankruptcy

Post by TravelGeek » Sat May 23, 2020 11:47 am

Helo80 wrote:
Sat May 23, 2020 10:59 am

I generally book directly through Hertz as they had the best rates (sometimes used insurance discount, but booked directly thru Hertz). If I'm not mistaken, those fares are always refundable up until like 24 hours before.
I almost always book through autoslash (which utilizes the Priceline booking engine) for pay-later rentals. Mostly Hertz since I have high status and points with them... right now is the first time in a long time when I don’t have any future reservation at all. But if I had one, I would not be concerned unless it was at some obscure company-owned location with no competition.
CFM300 wrote:
Sat May 23, 2020 11:46 am
I prepay if it results in a better price. I once prepaid for a small SUV on Hotwire because it was available for $1.18 per day. I have no idea what caused that pricing anomaly, but I kept the vehicle for an entire summer at that rate.
Nice!

Prepaid rates for me tend to be a buck or two cheaper per day. Generally not worth the lack of flexibility I would buy with that, especially since I usually rebook each rental a few times due to autoslash finding a lower rate.

cashmoney
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Re: Hertz is declaring bankruptcy

Post by cashmoney » Sat May 23, 2020 12:07 pm

Watty wrote:
Sat May 23, 2020 9:16 am
That is interesting.

I once bought a Camry from the Hertz used rental car lot and I had a good experience with it. Since then I periodically check their inventory and prices out of curiosity and would sometimes see good deals that would look tempting,

In the last few months they have had lots of inventory but their prices have been very high which sort of surprised me since I would have thought with so little rental car demand because of the pandemic that they would have been trying to reduce their inventory of cars. That could be because they were edging towards bankruptcy.

Anyway it will be interesting to see if their used car prices drop because of the bankruptcy since there could be some good deals on used rental cars.


I am in the market for a used car and was looking at Enterprise used cars listings and comparing prices to Carmax/Carvanna listings for comparable vehicles disclosed as fleet cars.I was a little surprised to see Carmax listings are selling for significantly less then comparable vehicles listed on Enterprise.

spectec
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Re: Hertz is declaring bankruptcy

Post by spectec » Sat May 23, 2020 12:23 pm

Cheez-It Guy wrote:
Sat May 23, 2020 10:57 am
Seasonal wrote:
Sat May 23, 2020 9:27 am
Cheez-It Guy wrote:
Sat May 23, 2020 9:03 am
Oh no! My Gold Plus Rewards!
Travel related companies tend to continue to honor points when they go through reorganization in bankruptcy.
Thanks! No way you would have known, but that was a bit of a joke. I don't have many of any built up, and they're basically worthless.
So they have roughly the same value now as they did prior to the bankruptcy.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

TravelGeek
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Re: Hertz is declaring bankruptcy

Post by TravelGeek » Sat May 23, 2020 12:34 pm

spectec wrote:
Sat May 23, 2020 12:23 pm
Cheez-It Guy wrote:
Sat May 23, 2020 10:57 am
Seasonal wrote:
Sat May 23, 2020 9:27 am
Cheez-It Guy wrote:
Sat May 23, 2020 9:03 am
Oh no! My Gold Plus Rewards!
Travel related companies tend to continue to honor points when they go through reorganization in bankruptcy.
Thanks! No way you would have known, but that was a bit of a joke. I don't have many of any built up, and they're basically worthless.

So they have roughly the same value now as they did prior to the bankruptcy.
Yup. There are reports of them having imposed blackouts on award rentals and eliminated airline partner transfers.

https://www.flyertalk.com/forum/hertz-g ... eless.html

https://www.flyertalk.com/forum/hertz-g ... -gone.html

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gasdoc
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Re: Hertz is declaring bankruptcy

Post by gasdoc » Sat May 23, 2020 1:09 pm

DaftInvestor wrote:
Sat May 23, 2020 9:53 am
Refund? Did you pre-pay?
Good point. I just remembered that I used to prepay, but they lately haven't even allowed people to prepay.

gasdoc

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Re: Hertz is declaring bankruptcy

Post by F150HD » Sat May 23, 2020 1:56 pm

Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Sounds like a Ch 11 re-org is a different game then a Ch 7.
Reading an article like this though wondering ultimately how stockholders will fare...sounds like Hertz wants to try to resume business on the back end of this, and hopefully so, so this doesn't become a domino effect w/ airlines (read somewhere 90% (?) of their business was at airports)

anyone here own shares? (no need for comments on BH philosophy, just wondered if anyone owns actual shares as the company has been around for quite a while)
Last edited by F150HD on Sat May 23, 2020 2:06 pm, edited 5 times in total.

palanzo
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Re: Hertz is declaring bankruptcy

Post by palanzo » Sat May 23, 2020 2:01 pm

whodidntante wrote:
Sat May 23, 2020 9:16 am
From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P
That's awful but clever :mrgreen:

palanzo
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Re: Hertz is declaring bankruptcy

Post by palanzo » Sat May 23, 2020 2:06 pm

F150HD wrote:
Sat May 23, 2020 1:56 pm
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Sounds like a Ch 11 re-org is a different game then a Ch 7.
Reading an article like this though wondering ultimately how stockholders will fare...sounds like Hertz wants to try to resume business on the back end of this.

anyone here own shares? (no need for comments on BH philosophy, just wondered if anyone owns actual shares as the company has been around for quite a while)
If you read the article you would see:
Hertz (HTZ) shares closed down 7.5% on Friday and have fallen 82% so far this year. Shares moved sharply lower in after-hours trading Friday evening. Shares are likely to become worthless as part of the bankruptcy process.
As I have mentioned on other threads their asset back bonds are in Vanguard funds like the Ultra Short. Those bonds are now junk.

seawolf21
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Re: Hertz is declaring bankruptcy

Post by seawolf21 » Sat May 23, 2020 2:28 pm

JoMoney wrote:
Sat May 23, 2020 9:57 am
If you pre-paid you might have a problem.
Otherwise, I've never heard of any kind of fee related to canceling a rental car reservation. Even if they go bankrupt, I would wager the company/brand and it's remaining assets will re-emerge as a functioning rental car company (just without the debt, and with new 'owners').
There is no problem with prepaid. Just submit a chargeback if they are no longer in operation which is not even applicable in this the case as this is a Chapter 11 not 7 bankruptcy.

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Re: Hertz is declaring bankruptcy

Post by abuss368 » Sat May 23, 2020 2:35 pm

Wow! I did not see this. We have to get this economy up and running or there will not be anything left to open!
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Stinky
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Re: Hertz is declaring bankruptcy

Post by Stinky » Sat May 23, 2020 2:36 pm

palanzo wrote:
Sat May 23, 2020 2:06 pm
F150HD wrote:
Sat May 23, 2020 1:56 pm
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Sounds like a Ch 11 re-org is a different game then a Ch 7.
Reading an article like this though wondering ultimately how stockholders will fare...sounds like Hertz wants to try to resume business on the back end of this.

anyone here own shares? (no need for comments on BH philosophy, just wondered if anyone owns actual shares as the company has been around for quite a while)
If you read the article you would see:
Hertz (HTZ) shares closed down 7.5% on Friday and have fallen 82% so far this year. Shares moved sharply lower in after-hours trading Friday evening. Shares are likely to become worthless as part of the bankruptcy process.
As I have mentioned on other threads their asset back bonds are in Vanguard funds like the Ultra Short. Those bonds are now junk.
Yes, it looks like Vanguard Ultra Short does own asset-backed bonds of Hertz, or at least did as of 1/31/20.

Do you know for a fact that the Hertz asset-backs have been downgraded to junk? You may be right - I don't have access to bond ratings.
It's a GREAT day to be alive - Travis Tritt

wootwoot
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Re: Hertz is declaring bankruptcy

Post by wootwoot » Sat May 23, 2020 2:39 pm

Sconie wrote:
Sat May 23, 2020 9:02 am
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Liquidation will come later.

Seasonal
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Re: Hertz is declaring bankruptcy

Post by Seasonal » Sat May 23, 2020 2:48 pm

abuss368 wrote:
Sat May 23, 2020 2:35 pm
Wow! I did not see this. We have to get this economy up and running or there will not be anything left to open!
Anything travel related or involving many people close together has major problems.

Just figure a way for customers and employees to feel safe that they won't get sick or die and things will start running again.

palanzo
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Re: Hertz is declaring bankruptcy

Post by palanzo » Sat May 23, 2020 3:10 pm

abuss368 wrote:
Sat May 23, 2020 2:35 pm
Wow! I did not see this. We have to get this economy up and running or there will not be anything left to open!
Hertz is in a worse situation than Avis because it has 17 BILLION in debt. About 14 Billion backed by its car fleet in those bonds. I won't comment here on the management so as not to violate forum rules but you can read that for your self. The next domino will be when Hertz floods the used car market with rental vehicles to raise funds. It has already laid off 20,000 people.

palanzo
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Re: Hertz is declaring bankruptcy

Post by palanzo » Sat May 23, 2020 3:20 pm

Stinky wrote:
Sat May 23, 2020 2:36 pm
palanzo wrote:
Sat May 23, 2020 2:06 pm
F150HD wrote:
Sat May 23, 2020 1:56 pm
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Sounds like a Ch 11 re-org is a different game then a Ch 7.
Reading an article like this though wondering ultimately how stockholders will fare...sounds like Hertz wants to try to resume business on the back end of this.

anyone here own shares? (no need for comments on BH philosophy, just wondered if anyone owns actual shares as the company has been around for quite a while)
If you read the article you would see:
Hertz (HTZ) shares closed down 7.5% on Friday and have fallen 82% so far this year. Shares moved sharply lower in after-hours trading Friday evening. Shares are likely to become worthless as part of the bankruptcy process.
As I have mentioned on other threads their asset back bonds are in Vanguard funds like the Ultra Short. Those bonds are now junk.
Yes, it looks like Vanguard Ultra Short does own asset-backed bonds of Hertz, or at least did as of 1/31/20.

Do you know for a fact that the Hertz asset-backs have been downgraded to junk? You may be right - I don't have access to bond ratings.
The situation changes daily.

https://www.fitchratings.com/research/s ... 01-05-2020

Kagord
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Re: Hertz is declaring bankruptcy

Post by Kagord » Sat May 23, 2020 3:37 pm

Staying on topic, I second previous thoughts and expect Hertz will oscillate through the bankruptcy cycle and your reservation later in the year will be fine.

dandinsac
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Re: Hertz is declaring bankruptcy

Post by dandinsac » Sat May 23, 2020 3:47 pm

Stinky wrote:
Sat May 23, 2020 10:23 am
whodidntante wrote:
Sat May 23, 2020 9:16 am
From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P
bob60014 wrote:
Sat May 23, 2020 9:51 am
Hertz....just part of the cycle! :)
2pedals wrote:
Sat May 23, 2020 9:32 am
That's gotta hertz!
Who would have thought that the Forum was a site for aspiring stand-up comedians?

Please, keep the jokes coming. :D
I understand that there are 50 Hertz cars in Europe for every 60 Hertz cars in the US.

anakinskywalker
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Re: Hertz is declaring bankruptcy

Post by anakinskywalker » Sat May 23, 2020 3:56 pm

dandinsac wrote:
Sat May 23, 2020 3:47 pm
Stinky wrote:
Sat May 23, 2020 10:23 am
whodidntante wrote:
Sat May 23, 2020 9:16 am
From Hertz to flatline. Apologies to those who don't get the joke, and even more so to those who do. :P
bob60014 wrote:
Sat May 23, 2020 9:51 am
Hertz....just part of the cycle! :)
2pedals wrote:
Sat May 23, 2020 9:32 am
That's gotta hertz!
Who would have thought that the Forum was a site for aspiring stand-up comedians?

Please, keep the jokes coming. :D
I understand that there are 50 Hertz cars in Europe for every 60 Hertz cars in the US.
True, but the ones in Europe are twice as big.

Anakin

Elysium
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Re: Hertz is declaring bankruptcy

Post by Elysium » Sat May 23, 2020 3:58 pm

Hertz ain't going nowhere. They're just filing for Chapter 11 to keep things in check. Work on payment terms, regulate finances, hunker down, re-organize fleet, cut out operational costs, while getting through the lean period, then come out strong as demand increases.

tibbitts
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Re: Hertz is declaring bankruptcy

Post by tibbitts » Sat May 23, 2020 4:09 pm

cashmoney wrote:
Sat May 23, 2020 12:07 pm
Watty wrote:
Sat May 23, 2020 9:16 am
That is interesting.

I once bought a Camry from the Hertz used rental car lot and I had a good experience with it. Since then I periodically check their inventory and prices out of curiosity and would sometimes see good deals that would look tempting,

In the last few months they have had lots of inventory but their prices have been very high which sort of surprised me since I would have thought with so little rental car demand because of the pandemic that they would have been trying to reduce their inventory of cars. That could be because they were edging towards bankruptcy.

Anyway it will be interesting to see if their used car prices drop because of the bankruptcy since there could be some good deals on used rental cars.


I am in the market for a used car and was looking at Enterprise used cars listings and comparing prices to Carmax/Carvanna listings for comparable vehicles disclosed as fleet cars.I was a little surprised to see Carmax listings are selling for significantly less then comparable vehicles listed on Enterprise.
Recently (2mo ago) I found Hertz car sales prices substatially more reasonable than the other choices you mentioned. I believe all rental companies lease cars, they don't own them.

Iridium
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Re: Hertz is declaring bankruptcy

Post by Iridium » Sat May 23, 2020 4:28 pm

wootwoot wrote:
Sat May 23, 2020 2:39 pm
Sconie wrote:
Sat May 23, 2020 9:02 am
Hertz filed Chapter 11, to reorganize their finances-----not to liquidate. They will keep operating while the bankruptcy moves through the court system.
Liquidation will come later.
While this progression is not uncommon, I would not expect it in this case. Hertz is the market leader and their brand was able to collect a premium on rental rates compared to their competitors. As a result, I would expect them to be worth more as a whole than as the sum of their rental fleet. Most likely, their worst performing locations/vehicle classes will be liquidated, equity will be wiped out, and the bond holders will be crammed down to current value of their collateral in return for equity in the new entity.

As OP did not prepay, I expect s/he will be fine. The only risk is if the location happens to be poorly performing and is closed between now and picking up the car, but that would be a rather rapid progression on a typical large chapter 11 bankruptcy.

TravelGeek
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Joined: Sat Oct 25, 2014 3:23 pm

Re: Hertz is declaring bankruptcy

Post by TravelGeek » Sat May 23, 2020 4:33 pm

Elysium wrote:
Sat May 23, 2020 3:58 pm
Hertz ain't going nowhere. They're just filing for Chapter 11 to keep things in check. Work on payment terms, regulate finances, hunker down, re-organize fleet, cut out operational costs, while getting through the lean period, then come out strong as demand increases.
Only if they try harder.

TravelGeek
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Re: Hertz is declaring bankruptcy

Post by TravelGeek » Sat May 23, 2020 4:49 pm

tibbitts wrote:
Sat May 23, 2020 4:09 pm
Recently (2mo ago) I found Hertz car sales prices substatially more reasonable than the other choices you mentioned. I believe all rental companies lease cars, they don't own them.
There are two operating models. This long article about the problems the carrental industry is facing explains it:

https://www.ft.com/content/cb632d0b-691 ... 97c479ba06
....

While the whole sector is under enormous strain, the pandemic has exposed a sharp divide between the two models of fleet ownership that underpin the industry.

The “buyback” approach, favoured by Europcar, involves a rental group taking vehicles with an agreement the carmaker will buy them back at a fixed time and price. This shelters the hire group from any unexpected changes in used car prices.

The second approach, pursued by Hertz, is where hire groups buy the cars outright, saddling them with the job of selling the vehicles at a later date — a set-up portentously known as the “at-risk” model.

This strategy is reliant on the steady rise of used car residual values — a situation with striking parallels to the US housing bubble that depended on ever-climbing prices before the crash during the financial crisis.

For years, cautious listed hire groups favoured the certainty of the “buyback” approach.

But Enterprise preferred the “at-risk” model, using its scale and reach to sell its cars afterwards.

Its success prompted industry executives to joke that Enterprise was really a used-car dealer with a rental arm, rather than the other way round.

Still, other rental groups copied Enterprise and began buying up cars themselves, spurred on by the apparent ease of flogging nearly-new vehicles, as they sought freedom from manufacturer obligations even though it left them without the safety net of a fixed resale value.

The percentage of rental cars in the US owned outright by the hire groups rose from 58 per cent in 2015 to 79 per cent in 2019, according to Jefferies data.
and
Then, coronavirus hit.

This exposed the weakness of the “at-risk” model, where groups typically hold vehicles in an asset-backed security, or ABS. They pay off the depreciation at a fixed rate and any interest, and at the end of the period, sell the cars, winding up the ABS.

According to the article Hertz has 90% of its fleet “at risk”.

TN_Boy
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Re: Hertz is declaring bankruptcy

Post by TN_Boy » Sat May 23, 2020 7:48 pm

abuss368 wrote:
Sat May 23, 2020 2:35 pm
Wow! I did not see this. We have to get this economy up and running or there will not be anything left to open!
Doesn't seem that surprising .... travel dies to almost nothing, travelers rent a lot of cars. That said, there are a lot of ripple effects from the economy shutdowns, some that seemed "obvious" to me, others did not.

For example, I didn't foresee health providers would be facing layoffs and that many hospitals would experience revenue shortfalls in the middle of a pandemic ..... because I didn't think about the business model many hospitals have (make money from various elective well paid services, many of which are not happening at this time).

But anything travel related was in a lot of trouble, and now we look at what vendors will be hurt because their customers (travel companies) are hurting. For example, the article I saw stated that Hertz new car purchases were down 90%. Fleet sales are a big deal to some car makers.

Hotels are in trouble, obviously. But the restaurants near hotels will probably see a big drop in business even when they open back up, since the hotels full of people that used to eat at those restaurants are no longer full of people. If travel is sharply reduced for a year or two (it seems almost impossible that won't be the case ....) many many travel related businesses that were marginal will go under. Then the owners of the properties where those businesses are sitting have a problem. And so on.

IBM just announced layoffs today, partly I am sure because they sell stuff to businesses and a shutdown or bankrupt business doesn't buy much in the way of computer gear or IT services.

I figure we won't understand the extent of the pain very well until the end of this year.

IMO
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Re: Hertz is declaring bankruptcy

Post by IMO » Sun May 24, 2020 2:46 am

gasdoc wrote:
Sat May 23, 2020 1:09 pm
DaftInvestor wrote:
Sat May 23, 2020 9:53 am
Refund? Did you pre-pay?
Good point. I just remembered that I used to prepay, but they lately haven't even allowed people to prepay.

gasdoc
Pre-paying can save one some money, but are not refundable. Putting bankruptcy aside, I don't advise anyone to prepay for rental cars. Yes it costs a little more, but that is essentially a "travel insurance" cost the same as not booking a non-refundable hotel to save a little money.

All I know is when Toy's R Us went bankrupt, I was stuck with worthless gift card(s).

DaftInvestor
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Re: Hertz is declaring bankruptcy

Post by DaftInvestor » Sun May 24, 2020 6:22 am

gasdoc wrote:
Sat May 23, 2020 1:09 pm
DaftInvestor wrote:
Sat May 23, 2020 9:53 am
Refund? Did you pre-pay?
Good point. I just remembered that I used to prepay, but they lately haven't even allowed people to prepay.

gasdoc
I would just book a rental with a second company or three and wait and see which might still be standing. (There is no cancel fee with car rentals).

brainstem
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Re: Hertz is declaring bankruptcy

Post by brainstem » Sun May 24, 2020 7:32 am

Pre COVID i tried to rent a car from Hertz in Phoenix. It was a third world chaotic experience. I eventually gave up and took a Uber. I left wondering what the heck happened to this former beacon of business travel. Compared to Enterprise, it was a shabby, threadbare consumer experience.

User avatar
Cheez-It Guy
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Re: Hertz is declaring bankruptcy

Post by Cheez-It Guy » Sun May 24, 2020 7:50 am

spectec wrote:
Sat May 23, 2020 12:23 pm
Cheez-It Guy wrote:
Sat May 23, 2020 10:57 am
Seasonal wrote:
Sat May 23, 2020 9:27 am
Cheez-It Guy wrote:
Sat May 23, 2020 9:03 am
Oh no! My Gold Plus Rewards!
Travel related companies tend to continue to honor points when they go through reorganization in bankruptcy.
Thanks! No way you would have known, but that was a bit of a joke. I don't have many of any built up, and they're basically worthless.
So they have roughly the same value now as they did prior to the bankruptcy.
Haha! Yes.

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