Rental car companies are poised to benefit financially from auto industry tariffs recently announced by President Donald Trump. On the day the tariffs were announced, Hertz experienced a surge in its stock price of over 20%, while another rental car company, Avis, also saw a double-digit increase.
These increases occurred shortly after the administration’s decision to impose a new 25% import tariff on vehicles was made public. The tariff, set to come into effect on April 2, applies to passenger vehicles, light trucks, and certain auto parts imported into the United States.
Fox Business correspondent Madison Alworth explained that drivers might choose to rent vehicles instead of purchasing new ones due to the increased costs associated with the tariffs. Rental companies such as Hertz and Avis can ultimately sell former rental cars on the used car market, making these vehicles more valuable post-tariff announcement.
The White House indicated that importers under the United States-Mexico-Canada Agreement would have the chance to certify their U.S. content, ensuring that the 25% tariff applies only to the non-U.S. content value. This exemption does not apply to used rental cars sold post-rental use, enhancing their attractiveness in the market.
Apart from rental car businesses, U.S. auto parts makers could also see opportunities for growth as some consumers may opt to maintain and repair their existing vehicles longer. This situation could further stimulate demand for rental cars as a temporary replacement while vehicles undergo repairs.
According to Matt Blunt, President of the American Automotive Policy Council, it is essential that these tariffs are applied in a manner that avoids increased consumer prices and sustains the competitiveness of the North American automotive market, a vital component of the USMCA agreement.
President Trump maintains that the auto tariffs will encourage automobile companies to increase domestic manufacturing and expand their workforce within the United States.
