Q2 2024 Insights about Used Vehicle Depreciation from Car Rental Companies
Hertz
Hertz’s strategic focus on fleet rotation is directly aimed at mitigating high depreciation costs incurred from purchasing vehicles at inflated prices during the pandemic. The company expects significant improvements in its depreciation expenses by 2026, with fleet optimization playing a critical role in overall cost management and operational efficiency
- North Star DPU metric of the low $300 range
- The deals we are consummating today for vehicles to be delivered later this year and into 2025 have DPU rates below $325
- By early 2026, we expect average depreciation per unit, or DPU, in the low 300s per month
- We expect that the fleet refresh will push through a little more than $1 billion of non-cash depreciation through the P&L from Q3 of this year through probably the end of 2025
AVIS
- Exited approximately 70% of our anticipated full-year fleet sales by May. This aggressive fleet reduction will help mitigate depreciation pressures.
- Straight-line depreciation increased from approximately $280 per unit per month to nearly $330 with U.S. rental car being within our previous call guidance
- Believe, over time, our depreciation rate will begin to normalize as we sell the higher-priced vehicles and replenish them with the new lower-priced vehicles
- Avis expects the total company net depreciation per unit per month to approximate $350 for the remainder of the year