Rental car giant Hertz will sell about one-third of its nationwide fleet of Tesla electric cars after finding demand for electric rentals soft and repair expenses high.
According to the Wall Street Journal, Hertz cited in a regulatory filing that “weaker demand for electrics and their higher operating costs” justify the move.
Hertz had committed to buying 100,000 Tesla EVs but appears to have fallen far short of that goal. The company said the 20,000 cars it will sell represent about a third of its fleet.
Collision expenses were a particular problem. The expensive battery in a Tesla is a structural part of the car. If damaged even slightly, it must often be replaced. That causes many insurance companies to write off even a lightly damaged Tesla. It has led other automakers to develop modular batteries that can be repaired.
Hertz CEO Stephen Scherr told attendees at last year’s JP Morgan Auto Conference that the company had restricted the acceleration of some of its Tesla EVs to limit collisions, Reuters reports.
Hertz also rented Tesla models in areas with limited electric vehicle (EV) infrastructure.
Related – Stranded: A Rental EV Gets A Flat
Bargain Tesla EVs for Sale
The Hertz decision could be your gain if you’re in the market for a used EV. The Hertz sales website already lists some available cars. They are mostly Model 3 sedans plus a handful of Model Y SUVs, all from model years 2021 or later.
Some appear with prices in the low $20,000 range. Most buyers will qualify for a federal tax credit that reduces the price of a used EV by up to $4,000.
But the models often have high mileage for their age – some 2022 Tesla models on the site have already accumulated over 60,000 miles. Rental car companies tend to keep strict maintenance schedules – the downtime caused by unexpected repairs costs them money. But rental drivers don’t care for a car like it’s their own.
They might represent an excellent buying opportunity for someone looking for an inexpensive EV.
Related: 5 Tips On Buying a Used Rental Car
All the usual cautions about shopping for a used car apply. But there’s an added caveat: few mechanics are certified to work on electric vehicles. You’ll want to have any used EV inspected by someone who knows what to look for in that specific car before you buy.
That said, spending as little as $18,000 for a used EV that gets you access to Tesla’s reliable nationwide charging network could be a solid buy for shoppers familiar with the tradeoffs of EV ownership.
There aren’t many used EVs available in most markets. At the end of 2023, EV transactions in the wholesale market accounted for only approximately 1% of total transactions. 20,000 more pouring into the market is good news for shoppers interested in going electric and avoiding the depreciation of a new car.
