Car subscription services have been a thing for years now, including Hertz’s, which is $599 per month at its cheapest. Hertz launched its program in 2019, before all that bankruptcy stuff. Hertz said this week that it’s going national with the program.
The subscription program, called Hertz My Car, has only been available in Austin, Texas, and Atlanta since it launched last year but now you can get it at any corporate Hertz location.
Like other car subscription services, Hertz says theirs is all-inclusive, meaning it includes liability insurance, roadside assistance and insurance to cover vehicle damage, though the vehicle damage insurance is extra for the cheapest tier. Here are those tiers:
According to AAA, the average annual cost for a new car — inclusive of insurance rates, license and registration fees, gas, maintenance, depreciation, and interest charges on loans — is $9,282 per year, or $773 per month, which suggests that Hertz’s first tier might be a bit of a deal. Except that AAA also says that the average annual cost for a new small sedan — what Hertz is offering in that tier — is actually more like $7,114 per year, or a little over $592 per month, slightly less than what Hertz is offering.
And Hertz does not cover gas like AAA’s average does. Further, AAA’s estimate is an average, meaning that you can find things for cheaper than that, and likely much cheaper.
The differences get starker when you compare the other tiers. For example, AAA says that a new small SUV costs an average of $8,394 per year or $699.50 per month, while Hertz is offering the same car for $999 per month. For pickups, meanwhile, AAA says a new pickup costs an average of $10,839 per year, or $903.25 per month, or almost $400 less per month than the $1,399 a month you’d pay Hertz.
What’s surprising to me about all of these numbers is that buying a new car is usually not the brightest idea to begin with, given how much new cars depreciate as soon as you drive them off the lot. But according to AAA’s numbers, Hertz’s subscription program is an even worse deal financially.
One feature of Hertz’s program that could still be a selling point: Hertz My Car customers can exchange vehicles twice a month, meaning that you could — in tiers 2 and 3 — get a truck if you needed it before returning it for something else. You can also do this at different Hertz locations, giving more flexibility, though how much of a benefit that really is I’m a little dubious of.
I’m not convinced that car subscription services won’t be a thing in the future but none of them so far have really been convincing on the point of whether they should exist. For Hertz, this seems mostly like another attempt to save its business; it also offers “multi-month” car rentals, seemingly trying anything it can to get you into its cars. Because of an uptick in demand in both the rental and used markets, it seems Hertz will likely survive for now; long-term is anyone’s guess.