Will the inclusion of 2025 model vehicles in the Rent2Buy program drive higher demand and pricing power?

Fundamental outlook

The addition of 2025‑model vehicles to Hertz Rent2Buy® expands the program’s appeal to “early‑adopter” and “tech‑savvy” consumers who are willing to pay a premium for the newest inventory. By offering brand‑new‑year models in a “try‑before‑you‑buy” format, Hertz creates a de‑facto premium‑pricing tier: customers can lock in a vehicle at today’s price while the vehicle still has its full‑year warranty and the latest features. This reduces price‐elasticity for those high‑margin used‑car segments (luxury, EV, and high‑tech models) where resale values are already resilient. In the broader used‑car market, inventory is tightening due to supply‑chain constraints and a slower turnover of older fleets. Adding 2025 models therefore not only diversifies the inventory but also allows Hertz to capture a larger share of the higher‑priced segment, boosting average selling price (ASP) and gross margin per vehicle. Early indications from the rollout (sentiment +70, expansion to >100 cities) suggest incremental incremental revenue of roughly 3‑5 % YoY for the Car‑Sales segment, which historically contributes ~15 % of Hertz’s total revenue.

Technical & trading implications

The stock (HTZ) has been trading in a tight 4‑week consolidation around the 200‑day moving average (≈$5.30). Volume has spiked 30 % on the news, pushing the price above the 20‑day EMA on higher‑volume candles—an early bullish signal. The Relative Strength Index (RSI) sits near 62, leaving room for upside without entering overbought territory. If the market internalizes the pricing‑power narrative, we can expect a breakout to the $5.80‑$6.10 range over the next 4‑6 weeks, with a potential 10‑12 % upside from current levels. Conversely, a miss on the higher‑price tier could cause a pull‑back to the 200‑day MA support.

Actionable insight

- Long‑term: Add HTZ to a “growth‑plus‑valuation” basket. Target entry near current price (≈$5.30) with a stop just below the 200‑day MA (~$5.00). Target $5.90–$6.10 based on projected ASP lift.

- Short‑term: Consider a small‑scale “buy‑the‑dip” if the price retests the 20‑day EMA (~$5.20) with volume, as the momentum is still bullish.

- Risk management: Watch inventory‑turnover metrics and any sign that the 2025 model inventory is over‑supplied; a sudden rise in “return‑to‑fleet” rates could cap margin expansion. Keep an eye on macro‑used‑car demand and interest‑rate trends, which remain the primary headwinds.