Car rental company Hertz recently announced that it is selling 20,000 electric vehicles, about a third of the company’s electric vehicle fleet. According to reports from Bloomberg, Hertz has decided to cut back on electric vehicle leasing due to high repair costs and weak demand from its customers.
The announcement was somewhat surprising to industry analysts, because Hertz had previously closed major EV offtake deals with EV manufacturers such as Tesla and Polestar. But if a major rental car company like Hertz is seeing sluggish demand (and rising costs) for electric vehicles, that could be a sign of additional trouble for EV owners. After all, if a large car rental company can’t afford to repair electric vehicles, what hope is there for ordinary people who have to pay for electric vehicle insurance and other electric vehicle maintenance costs?
Let’s take a look at some high-level thoughts on how the Hertz EV sale will impact EV prices for car buyers and EV owners.
Bad news for electric car owners: Your electric car’s value could take a hit
First, the bad news. If you’re an electric car owner and paid a lot of money for a new electric car a few years ago, selling Hertz electric cars is a bad sign. This is because another 20,000 electric cars are about to hit the market, helping to bring down the prices of used electric cars. If you’re hoping to sell or trade in your electric car in 2024, your used car will likely have depreciated by a greater amount.
The fact that Hertz sells so many electric cars because of repair costs is also a bad sign for electric car owners. If Hertz — a large car rental company with a lot of employees who can repair cars — can’t afford EV repairs, that could mean EVs still have a problem with reliability and expensive parts. The high cost of repairing electric vehicles can also make these vehicles more expensive to insure.
If you’re concerned about the total costs of electric car ownership (maintenance, insurance, etc.), you may want to consider leasing an electric car instead of buying one. Leasing a car has some drawbacks, but it gives you a lower monthly payment and lower maintenance costs (in many cases) than owning an older car that is no longer under warranty.
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Good news for electric car buyers: Buying used electric cars could get cheaper
Are you thinking about buying an electric car in 2024? This news from Hertz might give you pause. What if new EVs are still too expensive, too unreliable, and too much of a hassle right now? Many potential buyers of electric vehicles are waiting for the next generation of better and cheaper batteries. If you’re still concerned about electric vehicle maintenance and have concerns about battery range, you may want to wait before purchasing a new electric vehicle. Especially since many new electric cars will no longer qualify for the full $7,500 tax credit in 2024.
But what if you want to buy a used electric car in 2024? In this case, the sale of the Hertz EV could be good news for you. Buying a used electric car can be a good value if you’re committed to electric vehicles, can charge your car at home, and want to stop burning gas. Many used electric cars are eligible for a tax credit of up to $4,000 that you can get from the dealership as an immediate rebate.
minimum: With 20,000 used electric vehicles sold, Hertz shows that there are growing pains in the electric vehicle market. Used electric cars may become cheaper in 2024. This could be bad news for people who bought new, higher-priced electric cars in recent years, because their cars may depreciate in value faster than expected, pushing up the cost of car ownership. But more used EVs on the market could be good news for EV buyers — especially if you buy a used EV that qualifies for up to $4,000 in used EV tax credits. Be sure to shop around for electric car insurance quotes before you buy an electric car in 2024. The best car insurance companies may offer you competitive rates for insuring your new electric car.
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