“Instead of a problem, it was actually a source of strength for the rental car companies, including Hertz, last year, because as they sold vehicles they were actually making money on those transactions,” said Jonathan Smoke, chief economist for Cox Automotive, which owns Manheim. Before it filed for bankruptcy, Hertz had a global fleet of about 650,000 vehicles. The timing worked out well for Hertz, which sold more than 200,000 vehicles, mostly in the second half of 2020. By August, prices were up nearly 20 percent, according to data from Manheim, which runs auctions for used cars and tracks that market. When the company filed for bankruptcy in May 2020, used car prices were only just starting to rise. The skyrocketing prices for used cars helped Hertz in another way. On Wednesday, Ford said it would have to keep some production suspended into July because of a global shortage of computer chips. The high prices are partly the result of a car shortage, driven by high demand for used cars and supply chain disruptions throughout the pandemic. In Bozeman, Mont., it can run about $315 a day. In Anchorage, a rental can cost about $330 per day, according to Kayak. Rentals are especially expensive in parts of the country that individuals and families have been flocking to throughout the pandemic: beach and outdoor destinations. In some cities, cars can rent for more than $300 a day. By reducing its debt load, Hertz can make much-needed investments like modernizing its technology and buying cars, he said. “It sets them up very well,” said Hamzah Mazari, an analyst at Jefferies, an investment bank. The company also lined up access to nearly $10 billion in loans, credit lines and other debt. The resolution of its bankruptcy allows Hertz to shed more than $5 billion in debt, including all of the corporate debt of Hertz Europe. The winning group of investors, led by Knighthead Capital Management and Certares Management, provided the company with $5.9 billion in capital. But a quick economic and travel rebound in recent months set off a bidding war to revive the company, which is more than a hundred years old. It is a remarkable turnaround for a business that was bloated with debt and struggling to survive just 13 months ago. Its return coincides with and was made possible in part by a red-hot market for rental cars. Hertz, an early victim of the pandemic, officially emerged from bankruptcy on Wednesday.
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