The Hertz Story Isn’t What You Think
A lot of the Hertz articles, including this one, fail to call out that the vast majority of Hertz’s debt is vehicle debt. They finance new cars, rent them out for a while, then dispose of them. That all works fine and vehicle debt is not a problem when rental income covers the interest+depreciation on the vehicles. Obviously it becomes a problem when rental income disappears at the same time depreciation increases because of a depressed used car market. Hertz clearly didn’t plan for that. But breathlessly calling out the headline debt number without acknowledging that vehicle debt is a reasonable strategy for a rental car company is misleading at best.