Amazon and Hertz Partner to Sell Used Rental Cars on Amazon Autos: 3 Key Facts for Investors and Car Buyers

Hertz Global is partnering with Amazon to sell thousands of used rental cars on Amazon Autos, a sub-website that allows shoppers to browse, finance, and purchase vehicles. The partnership aims to meet customers where they are, as Amazon is the No. 1 marketplace worldwide. Initially, Hertz locations in Dallas, Houston, Los Angeles, and Seattle will participate in the program, with potential expansion to all 45 Hertz Car Sales locations nationwide.

Amazon.com Inc. has expanded its online car-buying platform, Amazon Autos, by partnering with Hertz Global Holdings Inc. to sell used vehicles from Hertz's rental fleet. This strategic move marks the first time Amazon Autos has incorporated inventory from a major fleet operator, complementing its initial exclusive tie-up with Hyundai Motor Co. [1]

The partnership allows customers in select U.S. cities to browse, finance, and purchase pre-owned cars directly through Amazon's site, with delivery options mirroring the e-commerce giant's signature convenience. Initially, Hertz locations in Dallas, Houston, Los Angeles, and Seattle will participate in the program, with potential expansion to all 45 Hertz Car Sales locations nationwide [1].

Hertz, which sells thousands of vehicles annually from its rental operations, sees this as a way to streamline its retail arm and boost profitability amid a challenging post-pandemic recovery. Amazon, meanwhile, gains a diverse array of used cars, including popular models from Chevrolet, Ford, and Toyota, complementing the new Hyundai vehicles it started offering late last year [1].

The integration of Hertz vehicles addresses early limitations of Amazon Autos, which initially relied solely on Hyundai dealerships for supply. This digital-first approach aims to disrupt the $1.2 trillion U.S. auto sales market, where online transactions have lagged behind other retail sectors [1].

For Hertz, the partnership comes at a pivotal time. The company, which emerged from bankruptcy in 2021, has been grappling with fleet management issues, including overstock from aggressive electric-vehicle purchases. By listing vehicles on Amazon Autos, Hertz can offload inventory more efficiently, as noted in a Reuters article detailing how the deal sent Hertz shares surging up to 18% in premarket trading on Wednesday [1].

Amazon's strategy positions it as a formidable player in the fragmented used-car market. By leveraging its logistics network and data analytics, the company can offer personalized recommendations and seamless transactions, much like its core e-commerce operations [1].

The announcement triggered immediate ripples across the sector. Shares of competitors like Carvana dropped 5.5%, while Avis Budget Group Inc., Hertz’s rival, saw a 4.9% decline, per data from Yahoo Finance. Industry insiders suggest this could accelerate consolidation in online auto sales, where platforms like Cars.com and AutoTrader have long dominated listings but lack Amazon’s integrated ecosystem [1].

Looking ahead, the partnership may evolve to include more advanced features, such as virtual test drives or AI-driven pricing. Challenges remain, including regulatory hurdles in vehicle titling and consumer trust in buying used rentals, often stereotyped as high-wear. Still, with Amazon’s track record of market disruption, this foray could redefine how Americans shop for cars [1].

References:
[1] https://www.webpronews.com/amazon-partners-with-hertz-to-sell-used-rental-cars-online/
[2] https://www.morningstar.com/news/accesswire/1065262msn/tekumo-inc-launches-strategic-pilot-project-with-major-oem-to-support-amazons-nationwide-pharmacy-expansion