BONITA SPRINGS, Fla.–Look for the used car market to be flooded with a new source of automobiles over the second half of the year. According to a filing with the Securities and Exchange Commission, Hertz has until Dec. 31, 2020, to get rid of 182,521 cars.
The requirement is part of a $650-million temporary deal between Hertz, which recently declared bankruptcy, and its lenders, according to the Wall Street Journal. It's unclear how Hertz will "dispose of" the cars, but they might appear on the company's own car sales website, the Journal said.
The deal requires Hertz to pay its asset-backed securities lenders $650 million in rent in equal installments per month from July to December. An unnamed person familiar with the deal told The Journal's Becky Yerak that this amounts to "about half of what Hertz is contractually obligated to pay."
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Sources said "Hertz is also trying to arrange up to about $2 billion in financing to help it get through chapter 11." The Journal reported that the settlement is tentative and still needs to be approved in court.
But, under it, Hertz will have to get rid of 182,521 leased cars, which will leave it with approximately 310,000 leased cars. Hertz will be allowed to retain $900 from each car it sells, according to The Journal. The rest of the money made from selling the cars will go toward repaying the lenders.
Business Insider reported earlier that before the bankruptcy announcement, Hertz put more than 20 Chevrolet Corvette Z06s up for sale at steeply discounted prices, with the vehicles selling in days.