Hertz Dumps Used Teslas at $25,000 "No Haggle" Price, EV Sales Slump

• Since abandoning its aggressive EV plans, Hertz has a large inventory of electric vehicles, particularly Teslas, which it is eager to sell at 'no-haggle' prices.
• In major metros across the nation, the average sales price for used cars is approximately $25,000. However, these vehicles are becoming older models in a market where battery and mileage performance will improve annually.
• This year, iSeeCars reported that used EV prices dropped by as much as 31.8%.

The $25,000 EV in the U.S. car market has been won, but not in the way the auto industry desired.

Since January, Hertz Global Holdings has been focusing on Tesla sales, with 20,000 electric vehicles from its global fleet, which is nearly a third of its existing EV inventory, on the dealer lot. This move, viewed as a stumble in Hertz's EV strategy, reflects a sobering up of the electrification hype within the U.S. auto industry, which has run into a consumer spurning at least the expected pace of the transition away from gas-powered cars.

Despite the significant growth of EV sales in the U.S. from 2020 to 2023, which now accounts for more than 9% of total light-duty vehicle sales, the pace of growth has slowed. Automakers are now focusing more on selling hybrids. However, the eventual transition to EVs remains inevitable as sticker prices become more aligned with those of ICE vehicles. Improvements in battery technology, driving range, and charging infrastructure are also contributing to this transition. Additionally, there is an overarching imperative to reduce the tons of climate-changing carbon emissions produced by cars and trucks.

Currently, it may be advantageous to purchase a used Tesla from Hertz Car Sales, a division of the company that has been in operation since 1977 and has approximately 70 locations nationwide. However, as with purchasing any used car, from manufacturers, independent dealers, online marketplaces, or private owners, there are both benefits and drawbacks to consider.

Hertz has a variety of EVs available for sale at no-haggle prices, with locations in most major metros and prices averaging around $25,000. All Hertz-certified vehicles undergo a 115-point inspection and come with a 12-month/12,000-mile (whichever comes first) limited powertrain warranty. Additionally, Hertz offers vehicle protection plans, a seven-day or 250-mile buy-back guarantee, trade-ins, financing, and federal tax credits of up to $4,000 for some used EVs. Several states also offer tax credits or rebates for used EVs.

Although the Hertz late-model EV fleet is only a couple of years old, the cars have been frequently rented, resulting in higher mileage compared to other used vehicles. This could mean more wear and tear, as there's no telling how aggressively they've been driven.

When considering purchasing an electric vehicle (EV), interested consumers can utilize various online resources during the buying process, including Hertz and Tesla. Additionally, taking a virtual test drive is available. However, it is crucial to visit a dealer and take a physical test drive before making a final decision. The Hertz Car Sales website's "Shop EVs" button currently lists 1,475 of the 1,638 used EVs as "Hertz Certified." Among these, there are 1,186 Teslas, 157 Volvos, 104 Mercedes, 125 Chevrolet Bolts, and fewer all-electric Kias and Subarus. These numbers may fluctuate daily.

The average used car price has decreased by 3.6% from the previous year, according to a March study by iSeeCars. However, used EV prices have fallen by a significant 31.8%, resulting in a loss of $14,418 in value. Used Tesla prices have dropped by 28.9%, the most among any brand, due to Elon Musk's aggressive price cuts on new Teslas, as stated by iSeeCars executive analyst Karl Brauer in the report.

In April, iSeeCars reported that all four of Tesla's models are among the fastest-selling used EVs, with three of its cars in the top four slots. According to Brauer, the average price of these used electric vehicles is $37,644, which is $20,000 cheaper than the fastest-selling new EVs. This pricing gap is a challenge for manufacturers looking to engage mainstream new-car shoppers.

According to Yossi Levi, who is known as the Car Dealership Guy, three years is the ideal time to buy a used electric car, including Teslas. He believes that used electric vehicles offer the best value for money in the market today.

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 had a driving range of 270 miles for the base version and around 350 miles for the long-range one. These Teslas were priced between $21,000 and $36,000. Additionally, the site listed 163 Hertz Rent2Buy EVs, including some Teslas. This refers to a plan offered in select states that allows you to rent an active rental car for up to three days or take a complimentary two-hour test drive. If you purchase the car, all rental charges will be waived. The same warranty and buy-back guarantee apply.

Hertz offers Tesla vehicles for sale, providing general information on each model and a detailed report on the specific vehicle through AutoCheck, an alternative to CarFax. However, it's important to note that not all damage-related events are reported to AutoCheck, and Hertz recommends having pre-owned vehicles inspected by a third-party before purchase.

It is possible to complete the entire transaction with Hertz online and have the car delivered, for a fee. The charge starts at $225 for delivery within 75 miles, goes to $350 for up to 200 miles, and is negotiated for longer distances. This might be an option if the buyer lives in Massachusetts and finds the perfect car in Colorado.

Tesla direct sales, online car markets

Tesla's official website provides information on all of its new and used vehicles, which are certified, inspected, and warrantied by the manufacturer. The site lists more used vehicles than Hertz, with options dating back to 2018. Model 3 prices range from $24,000 to $38,800.

Through various online marketplaces, it is possible to purchase a pre-owned Tesla. For instance, CarMax listed 38 2021 Model 3s, with long-range versions priced from $26,000 to $37,000, depending on mileage. Carvana had 133 of the same models, ranging from $26,000 to $38,000.

Asking gen AI to help in car buying process

In 2024, the car shopping experience will undergo another major change with the integration of artificial intelligence as a sales assistant. Last year, Edmunds and CarGurus launched ChatGPT tools that can be accessed with a subscription to ChatGPT Plus, which costs $20 per month.

I am considering buying a pre-owned Telsa Model 3 from Hertz Car Sales. Can you provide me with information and guidance?

"ChatGPT stated that the decision to rent a Model 3 could be great," and then proceeded to list the features of the Model 3 and reiterate Hertz's Certified and no-haggle pricing policies. The bot also advised checking battery condition, software updates, and whether Tesla's original warranty is still in effect. Like Hertz, the bot recommended a test drive and independent inspection.

When asked about 2022 Tesla Model 3s sold by Hertz Car Sales, the CarGurus GenAI tool returned a list of links to dealer listings on the CarGurus website, but no mention of Hertz.

When deciding between buying a used Tesla from Hertz, a Tesla dealer, or a private owner, the bot presented the advantages and disadvantages for each option, ultimately advising to consider the factors that matter most to you, such as cost, warranty, and tranquility of mind, when making your choice.

The chatbots were not intended to make the car shopper's decision, but they conveniently summarized a lot of information that standard online searching would take longer to compile across multiple sources, including Edmunds and CarGurus websites, which listed Teslas at private dealers in the region, as well as Hertz Car Sales locations. This is consistent with the basic level of GenAI's prime directive.

Matt Quinn, CarGurus' chief technology officer, stated that the new feature will assist customers in discovering cars within the haystack that they may not have found with the existing filters, allowing them to search on their own.

Shoppers who use AI-generated information should be educated once they visit a dealership. According to Eugene Park, chief product officer for Edmunds, these tools can help shoppers become more prepared and informed, which dealerships appreciate.

Instead of fearing the typical used car buying process, soon customers can turn the tables and instruct the salesperson on how to secure them the desired vehicle.