Hertz Negotiating to Lease Vehicles
Hertz said it's negotiating with two automakers to lease as much as 20 percent of its U.S. fleet.
Hertz Global Holdings Inc. said it’s negotiating with two automakers to lease as much as 20 percent of its U.S. cars to cut fleet financing costs, according to Bloomberg.
Hertz Global Holdings Chief Executive Officer Mark Frissora on May 6 identified the carmakers only as investment-grade companies, ruling out U.S. automakers. Frissora said Hertz wouldn’t take title of the vehicles.
A lease deal this year would be a first in the U.S. for Hertz, which has lease agreements in Germany and Switzerland.
The deal would help replenish inventory and reduce the need for $5 billion in fleet financing next year without tapping credit markets that are currently closed to rental-car companies.
Last year, Hertz bought about 30 percent of its U.S. fleet from Ford Motor Co. and 25 percent from General Motors Corp. The rental-car company sold about 63 percent of its cars back to their manufacturers after six to eight months, with the rest sold to the market. Hertz uses proceeds from car resales to pay back loans.
Hertz is diversifying its fleet with cars from Toyota Motor Corp., Hyundai Motor Co. and Kia Motors Corp., Frissora said.
A spokeswoman for Hyundai’s U.S. unit in Fountain Valley, Calif., and spokesmen for Toyota and Nissan all said their companies were not talking about a lease deal with Hertz. Kia continues to do “standard” fleet business with Hertz, in which the rental company takes title of the vehicles it purchases.
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