Hertz International Holding Company HTZ,
It said Thursday that it is selling about 20,000 electric vehicles from its fleet, including several Tesla Model S sedans. The move is intended to better balance supply and expected demand for electric vehicles, allowing Hertz to cancel a disproportionate number of high-end rentals. Low profit margin and reduced damage expenses associated with electric vehicles.
This also represents a decline for Hertz, which in 2021 bet on electric cars by ordering 100,000 cars from Tesla (TSLA).
This has raised the value of Tesla to more than a trillion dollars for the first time.
But is getting one of these Hertz electric cars a good deal for potential car buyers?
It depends, experts told MarketWatch.
Sean Tucker, senior editor at Kelley Blue Book, looked at a list of used Tesla cars Hertz has already posted and said he had “mixed feelings.”
“These are surprisingly reasonable prices for used electric cars,” he told MarketWatch.
Listings on Hertz's website Thursday ranged from a 2021 Tesla Model 3 Standard Range Plus Sedan with 31,647 miles on its odometer for $20,125 to a 2022 Tesla Model Y Long Range SUV with 92,789 miles for $40,886.
Some industry observers described the listing prices as downright “cheap,” with some models priced as high as $17,700.
Some used electric cars are eligible for a federal tax credit of up to $4,000, which further sweetens the deal for buyers.
But to qualify for this credit, the electric vehicle must be a 2022 model year or earlier, and its selling price can't be more than $25,000. There are also income limits for the credit. To qualify, individual buyers can only earn up to $75,000, or twice that for couples filing jointly.
In many cases, cars sold by Hertz already have 50,000 to 60,000 miles on them, even on vehicles that are about a year old. That's a lot of miles to cover in a short period of time, Tucker noted.
“Hertz Car Sales offers competitive pricing at a non-negotiable price,” with vehicles available online and at physical sales locations, a Hertz representative told MarketWatch.
The representative said Hertz sells electric vehicles in multiple makes and models, with more coming in 2024. In the company's “Rent2Buy” program, potential buyers can rent a car for up to three days or take a free two-hour test drive. The rental fee is dropped when customers make a purchase, the spokesman said.
What to consider when buying a used electric car
When considering purchasing a used electric vehicle, mileage isn't necessarily the most important factor, said Jeremy Robb, senior director of economic and industry insights at Cox Automotive. Even more important is the quality of the battery and tires, which can wear out more quickly than gasoline-powered cars.
“Nearly 60% of [an electric vehicle’s] “The value is tied to the battery, and batteries deteriorate with use,” Tucker said.
That's why Tucker recommends having the vehicle you're considering checked by an independent mechanic or technician — and someone who understands electric vehicles.
You'll need to check your tires, too, because electric vehicles weigh more than gas-powered cars and need special tires that can handle the wear. This is because electric car batteries are much heavier than a traditional gasoline engine.
One of the reasons Hertz sells so many electric cars is the high cost of repairs. For electric vehicles, repairs after an accident can cost thousands of dollars more than their gas-powered counterparts — something else potential buyers may want to consider.
Basics of buying used cars
Of course, for those serious about purchasing a Tesla from the Hertz fleet, the basics of used car buying apply. You shouldn't buy a car without seeing it, and if Hertz or any other used car seller won't let you inspect it with your own mechanic, don't buy it, Tucker said.
However, “Hertz is a top-tier rental company,” Robb said. “I'm sure the vehicles they sell will be in good condition overall.”
There are additional factors to consider when buying an electric car, used or new, Robb and Tucker agreed: How often will you use it? Will you be able to charge the car at home? What is the charging infrastructure like where you live?
“This is one of the most important things for the consumer to consider,” Rob said. “Most people who own an electric car have some way to charge it at home. If you don't, it's probably going to be difficult for you in the long run.”
Tucker added that for many buyers, “this is the cheapest way to get a used Tesla right now.”
“If there are consumers considering purchasing a used electric vehicle, [the Hertz sale] “It might be a good option for them,” Rob said. “Some of these units may be at a more attractive price.”
