Hertz files for Chapter 11 bankruptcy protection with $19 billion of debt

Car rental giant Hertz has filed for Chapter 11 bankruptcy protection in the US after 102 years of trading.  This does NOT include its international operations, so any pre-paid bookings made for non-US locations should be safe – for now.

The process will, according to the company, leave it with:

“a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery.”

It is also important to remember that many smaller Hertz outlets, especially off-airport ones, are franchises.  These would not be impacted if the company did disappear for good.

Hertz also owns Dollar, Thrifty and Firefly brands which are also impacted by this filing.

The numbers are startling.  The company has almost $19 billion of debt (double its 2019 revenue) and under $1 billion of cash.

The majority of the debt is secured against its fleet of cars, but Hertz was caught out by clauses which force the company to make cash payments to lenders if second-hand car values fall.  The debt is primarily in the form of bonds which require regular repayments and, because of the large number of bondholders, is far harder to restructure than bank debt.

Chapter 11, of course, is NOT ‘receivership’ in the UK sense.  Chapter 11 is effectively a standstill arrangement, which gives Hertz breathing space to restructure its affairs without the risk of its assets being seized by creditors.

It is difficult to imagine any scenario in which the Hertz brand will disappear.  At the end of the day, the brand is the ONLY real asset that the company has.  It does not own any of its cars outright and the only ‘assets’ it has are its customer list and leases on prime airport pick-up locations.

The lenders should recover most of their money if the Hertz fleet of 560,000 vehicles did have to be liquidated, although it is beneficial for the entire car industry to keep the company alive.

CNN reported that car rental companies buy 10% of all new cars in the US – 1.7 million vehicles last year.   One plan, apparently, is for Hertz to begin selling down its fleet at the rate of 30,000 cars per month to raise funds.

It is bad news for Hertz shareholders, of course, although they had already lost over 80% of their value this year.  In truth, the car rental industry in the United States has been in trouble ever since the launch of Uber and Lyft.  Many travellers now find it more convenient to use a rideshare service during their travels rather than deal with the hassles of hiring a car.

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How to get FREE car rental status and other benefits via UK credit cards (April 2025)

If you hire a car in the UK, you can get special benefits (discounts, upgrades, free additional drivers etc) if you have elite status with a car rental programme. You can get elite status for free via certain American Express cards.

The Platinum Card and American Express Business Platinum

The Platinum Card from American Express and American Express Business Platinum come with two free car hire status cards. Your supplementary Platinum cardholder can also receive status in their own right.

From Avis, you receive President’s Club status in Avis Preferred. This gets you up to 25% off standard rates, a free additional driver and a guaranteed one class upgrade. For weekend rentals you will receive a two class upgrade, subject to availability.

From Hertz, you receive ‘Five Star’ status in Hertz Gold Plus Rewards. This gets you up to 15% off standard rates, a free additional driver and a one class upgrade, subject to availability.

Hertz also offers Platinum cardholders a 4 hour grace period on rentals. Your final day is treated as 28 hours, so a 1pm pick up with a 5pm return the following day is only charged as one day, not two days. We wrote about the Hertz / Platinum 4 hour grace period here.

The Platinum Card also comes with full car hire insurance with no obligation to pay for the rental via American Express. You can refuse any attempts to sell you additional insurance at pick up. This benefit has substantial value if you rent on a regular basis.

You can find more details on the two Platinum cards, and apply, in our full reviews linked below. You can apply here for the personal card and here for the business card.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on American Express Platinum is increased from 50,000 Membership Rewards points to a huge 80,000 points. Points convert 1:1 into Avios (80,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

The Platinum Card from American Express

80,000 bonus points and great travel benefits – for a large fee Read our full review

American Express Business Platinum

50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review

American Express Preferred Rewards Gold

American Express Preferred Rewards Gold is an excellent card in its own right. You receive 20,000 Membership Rewards points for signing up (convert to 20,000 Avios amongst other things), four airport lounge passes and £120 of Deliveroo credit. Even better, your first year is free.

There are two car rental benefits:

• you receive Preferred Plus status in Avis Preferred

• you receive a special package with Hertz – 10% off best available rates at participating locations, a one class upgrade for rentals of 5 days or more, subject to availability, and no additional driver fees

Find out more about the benefits of American Express Preferred Rewards Gold in our review. You can apply here.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & four airport lounge passes Read our full review