EV Slump, Hertz Fire Sale Allows Used Tesla to Negotiate $25,000 Price Without Negotiation

Hertz electric vehicles test drive at the Los Angeles International Airport site on July 19, 2023 in Los Angeles, California.

Rodin Eckenroth | Getty Images Entertainment | Getty Images

The race to the $25,000 EV in the US car market has been won, but not in the way the auto industry wanted.

Since January, Hertz Global Holdings has been in Tesla sales mode, with 20,000 electric vehicles from its global fleet, representing nearly a third of the car rental company’s existing EV inventory, on the dealer fleet. The move, which is seen as a stumbling block in Hertz’s EV strategy – in 2021 it heralded plans to order hundreds of thousands of Teslas, Polestars and battery-electric GM models – also reflects a sobering of the electrification hype within the US automotive industry. industry will have encountered a consumer in 2024 who, at the very least, rejects the expected pace of the transition from gas-powered cars.

While US electric vehicle sales more than quadrupled between 2020 and 2023 and now account for more than 9% of total light-duty vehicle sales, the growth rate has slowed and automakers are focusing more on hybrid sales. Still, the eventual transition to electric cars remains inevitable as sticker prices increasingly align with those of internal combustion engine (ICE) cars, accelerating the sales decline as car companies try to shift to electric cars – battery technology improves driving range and the charging infrastructure is expanding. And there’s the overarching need to reduce the tons of climate-changing carbon emissions that cars and trucks produce.

Taking all this into account, now could be a good time to purchase one of Hertz’s used Teslas through the long-standing Hertz Car Sales division, which has been in business since 1977 and has approximately 70 locations across the country exploits. Although like buying any used car – from manufacturers and independent dealers, online marketplaces or private owners – there are pros and cons.

On the plus side, Hertz has a lot of electric vehicles that it is motivated to sell at what it calls “no-haggle” prices. “Our EVs can be found nationwide in most major metro areas and average approximately $25,000,” a Hertz spokesperson said in an email. All Hertz certified vehicles undergo a 115-point inspection and include a 12-month/12,000-mile limited powertrain warranty (whichever comes first). Hertz also offers vehicle protection plans that last beyond the warranty, as well as a seven-day or 250-mile buyback guarantee. Hertz, like most used car retailers, offers trade-in and financing. Additionally, some used EVs are eligible for up to $4,000 in federal tax credits, and several states offer tax credits or rebates.

On the negative side, although Hertz’s EV fleet is only a few years old, the cars are often rented, so mileage can be relatively higher compared to other used vehicles. That could mean more wear and tear, as it’s not clear how aggressively it was driven.

Interested auto consumers can consult various online resources and take a virtual test drive during the EV purchasing process when it comes to Hertz and Teslas. Of course, going to a dealer and taking a physical test drive is a must, but there’s still a lot to learn before you head out the door. The “Buy EVs” button on the Hertz Car Sales website recently listed 1,475 of 1,638 used EVs as “Hertz Certified.” There were 1,186 Teslas, 157 Volvos, 104 Mercedes, 125 Chevrolet Bolts and many fewer fully electric Kias and Suburus. Of course, those numbers can change from day to day, and the data suggests that the models are in flux: a few weeks ago there were 1,860 ‘Hertz Certified’ EVs out of a total of 2,242 for sale, including 1,341 Teslas and 500 Chevy Bolts.

The prices of used EVs have fallen sharply. A March survey from automotive research firm iSeeCars found that the average price of used cars had fallen by 3.6% from last year, although used EV prices had fallen by 31.8%, equating to a value of $14,418. Prices of used Teslas fell 28.9%, the most of any brand, “largely driven by Elon Musk’s aggressive price cuts on new Teslas,” iSeeCars analyst Karl Brauer said in the report.

In April, iSeeCars reported that all four Tesla models are among the fastest-selling used electric vehicles, with three of its cars in the top four. “With an average price of $37,644, the fastest-selling used electric vehicles are $20,000 cheaper than the fastest-selling new electric vehicles,” Brauer said. “This is the price gap manufacturers must bridge to reach mainstream new car buyers.”

Three years is considered a sweet spot among used electric cars, including used Teslas, according to Yossi Levi, who thinks about buying new and used cars as a Car Dealership Guy. “The best bang for your buck for consumers in the market today, bar none, is the used electric vehicle,” he said. “And the best value purchase is probably a three-year-old electric car.”

Hertz Tesla Model 3 used inventory and the fine print

The majority of Hertz’s used Teslas were 2022 and 2023 Model 3 sedans, which when new had a driving range of 275 miles for the base version and about 350 miles for the long-range version. The Hertz Teslas were priced between $21,000 and $36,000. The site also listed 163 Hertz Rent2Buy EVs, including several Teslas. That refers to a plan, offered in certain states, that lets you rent an active rental car for up to three days or take a free two-hour test drive. “If you buy the car, all rental fees are waived.” said the Hertz spokesperson. The same warranty and buyback guarantee apply.

Each individual Tesla sold through Hertz contains general information about the model as well as details about that specific vehicle. The icon for AutoCheck (an alternative to CarFax) displayed the car’s history report, including accidents, recalls, and maintenance/repairs. There is one notable caveat: not all damage-related events are reported to AutoCheck. It recommends having used vehicles inspected by a third party before purchase.

Although a test drive and inspection by a third party is advisable, it is possible to complete the entire transaction with Hertz online and have the car delivered for a fee. Costs start at $225 for delivery within 75 miles, go to $350 for up to 200 miles, and are negotiable for longer distances. That might be an option if the buyer lives, say, in Massachusetts and finds the perfect car in Colorado.

Tesla direct sales, online car markets

The official Tesla website, meanwhile, has information on all of its new and used vehicles, all certified, inspected and guaranteed by the manufacturer. Unsurprisingly, the site listed more used vehicles than Hertz, dating back to 2018. Model 3 prices ranged from $24,000 to $38,800.

Buying a used Tesla is also possible through a number of different online marketplaces. For example, CarMax listed 38 2021 Model 3s, mostly long-range versions and priced between $26,000 and $37,000, depending mainly on mileage. Carvana had 133 of the same models, ranging from $26,000 to $38,000.

Ask Gen AI to help with car buying

In 2024, another big change is happening in the auto shopping experience: artificial intelligence is being brought into the mix as a sales assistant. Late last year, ChatGPT tools were launched by car research and shopping websites Edmunds and CarGurus. Access to the chatbots requires a subscription to ChatGPT Plus, for $20 per month.

Asking the Edmunds bot the following question, “I’m thinking of purchasing a used Telsa Model 3 from Hertz Car Sales. Can you provide information and advice?” led to this response:

“Could be a great decision,” ChatGPT said. It then listed the Model 3’s features and reiterated Hertz’s certified and non-haggle pricing policy. It was suggested to check the condition of the battery, check for software updates and whether Tesla’s original warranty is still in effect. Like Hertz, the bot recommended a test drive and independent inspection.

The same question asked of the CarGurus GenAI tool led to a half-dozen used Model 3s and links to dealer listings on the CarGurus website, but with no mention of Hertz. A follow-up question: “Can you tell me that 2022 Tesla Model 3s are sold by Hertz Car Sales?” – produced the same entries, plus some perfunctory comments about purchasing through Hertz.

When asked to compare buying a used Tesla from Hertz versus buying a Tesla dealer; and a used car dealer or a private owner, the bot neatly laid out the pros and cons for each, ending with the following advice: “Think about what factors are most important to you – such as price, warranty and peace of mind – when making your decision.”

The chatbots wouldn’t make the decision for the car buyer, but both chatbots helpfully compressed a lot of information that a standard online search would just take, collected from several separate sources – including the Edmunds and CarGurus websites, which listed Teslas privately . dealers in the region, as well as Hertz Car Sales locations. That’s no surprise, since at the basic level it’s GenAI’s main guideline.

“We believe this will help customers potentially find cars in that haystack, if you will, that they might not have been able to find with our existing filters and get started on their own,” said Matt Quinn, CarGurus’ head technology.

Consumers armed with such AI-produced information should be adequately informed once they show up in person at a Hertz Car Sales location, a Tesla or a private dealer. “These tools can help shoppers become better prepared and informed,” said Eugene Park, Edmunds Chief Product Officer. “Honestly, I think the best dealers appreciate that customers are willing to buy.”

For those who fear the clichéd used car shopping experience, the day may soon come when they can flip the script and ask the salesperson, “Here’s what you need to do to put me in that car today.”

Read more: The basics of buying used electric vehicles

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