Fox Business's Madison Alworth explains how car rental companies have the opportunity to benefit financially from the automotive industry tariffs imposed by the Trump administration.
President Donald Trump's recently announced car rates could benefit rental car companies.
Hertz jumped over 20% on Thursday with another car rental company Avis posted a double-digit increase on the same day.
The jump that these car rental companies experienced on Thursday came the day after the president revealed in early April that he was imposing a new 25% car import duties.
President Donald Trump announces new car rates
“Some drivers may choose to go on the car rental route rather than buying a new, expensive vehicle,” reported Madison Alworth, a business correspondent at Fox. “Another reason that's very persuasive is that if a company like Hertz or Avis used cars as a rental car, they'll sell them in the second-hand car market.”
Hertz Corporation logo (Pavlo Gonchar/SOPA Images/Lightrocket bygetty Images/Getty Images)
The new tariffs apply to passenger cars, mild trucks, and some auto parts shipped to the US from other countries.
The White House said vehicle importers under the US-Mexico-Canada agreement will be given the opportunity to prove that US content and systems will be implemented so that a 25% tariff applies only to the value of non-US content.”
Trump's 25% car import duties: These are the most affected manufacturers
According to Alworth, the tariff does not apply to rental cars sold in the used car market by rental companies such as Hertz and Avis.
“So they're more valuable today than before this tariff was announced,” she said.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| HTZ | Hertz Global | 4.13 | -0.10 |
-2.36% |
| car | Avis Budget Group Inc. | 73.08 | -1.08 |
-1.46% |
Citing JP Morgan analysts, Alworth said he recognizes that if a driver decides to maintain an existing car for longer, he will have more opportunities for repairs and parts, along with the company of the US automotive company.
“When your car is in the store, what do you do in the meantime? You head to a rental company like Hertz,” she added. “It's helping those stocks.”
The new car rates are expected to go into effect on April 2nd.
President Donald Trump will speak at the White House Oval Office in Washington, DC on March 26, 2025 (Francis Chung/Politico/Bloomberg via Getty Images)
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Matt Blunt, chairman of the American Automotive Policy Council, said in a statement Wednesday that tariffs are “important” in a way that avoids consumer prices hikes and keeps the integrated North American automotive sector competitive, with the key success of the president's USMCA contract.
Trump claims that car tariffs will encourage car companies to build more factories and hire more workers in the US
