Carvana has teamed up with national car rental company Hertz to help it market and sell disused rentals directly to consumers.
Officially announced this week, the deal would allow Hertz to avoid discounts that it accepts through its normal car-selling process.
For Carvana, the deal would add vehicles to its retail site at a time of historically low inventory. It also helps juice up a longstanding but little discussed Carvana experiment in which the company lets other car sellers use Carvana as a third-party marketplace.
The AIM Group gave an update on Carvana’s marketplace trial, which started more than a year ago, in its recent overview of the U.S. automotive sites. The article is part of the AIM Group’s 2021 Automotive Marketplaces Annual.
In brief, Carvana’s marketplace operation hasn’t produced significant revenue yet, but Carvana founder and CEO Ernie Garcia III has stated the company will disclose more details about it when and if it does. The deal with Hertz, which sold about 200,000 vehicles in 2020, could be a tipping point.
Hertz’s and Carvana’s nationwide tie-up follows a pilot in September that lets Hertz utilize Carvana’s online transaction technology and logistics network to sell older rental cars.
Historically, Hertz has sold vehicles through auctions, direct-to-dealer programs and its retail network of 68 Hertz Car Sales locations.
The deal gives Hertz “a more efficient direct-to-consumer sales channel,” the announcement states.
It’s good timing for Hertz, which just emerged from bankruptcy this year thanks to the rebound of the travel industry and investments from new owners.
“Our new partnership with Carvana will help Hertz provide a tech-enabled and scalable channel through the lifecycle of our fleet,” Hertz interim CEO Mark Fields wrote in the announcement. “This is another step toward the new Hertz – combining our brand strength and global fleet expertise with new technology and innovations to chart a dynamic, new course for the future of travel, mobility and the auto industry.”
Garcia stated, “Carvana’s technology and infrastructure enable this partnership to bring online car buying experiences to more customers. Our nationwide first-party logistics network allows Hertz to expand its retail reach beyond its physical stores and into over 300 markets across the country.”
