Hertz is installing AI inspection portals at its biggest U.S. airports this year. Atlanta was the first, but they expect to hit 100 airports before 2025 is over.
Now they scan cars as they’re being returned – vehicles drive through a camera‑and‑sensor tunnel and get an ‘MRI for vehicles’ to log damage in a way that rental staff never did before. It also finds hard to spot damage such as under the vehicle, uneven tire wear, hairline cracks in the windshield.
We’re seeing one inch scuffs on a rear wheel billed out at $440 ($250 repair cost, $125 “processing” and $65 “administrative fee”).
- That’s the kind of thing that would never have been noticed before.
- And it’s probably not actually even getting repaired.
They ask for payment right away or else you pay more, and if you challenge them it takes longer than the discount window to get a response. They go after you for more money if you question the charges.
- This isn’t about accuracy
- And it isn’t about convenience
- It’s a new way to squeeze customers who don’t expect it.
Hertz’s new system lets them go after 5 times as many customers as before. The rate at which they’re sending out bills is skyrocketing. Here’s the math:
For big U.S. airport car rental locations, between 0.3% and 1% of rentals close out with actual damage charged to the customer. Roughly one renter in every 100‑300 gets a bill for damage. The midpoint most estimate, then, is about 0.6% (or 6 claims per 1,000 rentals).
- About 10% of rental returns may have some fresh dents, scrapes, or glass chips. Most of these, historically, never turned into a customer bill. At high turnover airports the focus is on taking back the car, cleaning it and getting it to the next customer.
- Fewer than 1% of rentals historically have turned into damage claims, Meanwhile, 30% – 50% of those claims are ultimately written off.
In contrast, according to Hertz, “fewer than 3 percent of vehicles scanned by the A.I. system show any billable damage.” (Emphasis mine.)
That means Hertz’s new system is billing out damage at about 5 times the previous rate. And this destroys the value proposition of renting from them (assuming of course that there was one to start with).
Historically renting from Hertz (or Avis or National) at an airport location meant on-airport convenience and going straight to your car rather than standing in long lines, and that they didn’t nickel and dime you over minor nicks and scrapes.
You pay a ton of extra fees for airport rentals, and frequently higher rates than off-airport discounters, but you weren’t stressed or hassled. These businesses are high volume and high revenue and they didn’t hassle over minor damage the customer probably didn’t do to the vehicle themselves.
It’s always been advisable to take photos and videos of vehicles prior to renting, it usually didn’t matter when renting from major car rental companies at major airports. That’s clearly changing at Hertz and others will likely follow.
The implication, though, is that these companies will no longer be worth their premium. There was an implicit loss damage waiver being purchased even by customers not paying for extra coverage. By stripping that feature out, but charging the same price, the customer gets less and becomes incentived to book elsewere – the Fox, Payless or Advantages of the world.
This isn’t double billing. It’s 100x billing.
They could charge the same $400 5-7x a week, never get caught for fraud. And never fix the scratch.
When does the law step in?
As for me, I will Uber more and rent cars less because of how this inspection is being handled. I expect that all high volume locations will have scanners soon. Such systems may not be cost effective at lower volume locations. One strategy would be to rent at an airport and return to a lower volume city location that doesn’t have a scanner, paying the one way fee. I wonder how effective the scanners are if you bring back the vehicle with dust or dirt on it, like what you could pick up driving in road slush.
@jns — On the ‘trashy companies’ comment, I’m convinced it’s a form of Stockholm syndrome.
First Hertz system was hacked and my dl#, credit card information and personal information was stolen and they give me a basic 2 year monitoring WITHOUT dark web monitoring- now this?? Bye bye Hertz.
An amazingly devious strategy, I must say. Charge $400 for a scratch. Never fix that scratch. Let’s assume the properly never charge a subsequent renter for that original scratch. But, every few rentals, a new ding, scratch, etc. pops up. Bang, another $400. By the time you sell the car, there are a dozen scatches/dings that netted them $5,000. Now spend a small portion to buff out the scratches or just sell as is. Bang, you’ve monetized scratches that you used to just eat.
BTW, I assume that if they compare in and out scans, the only way to flag uneven tire wear is from renters who think drifting and doughnuts are why you rent cars.
This also looks like a money grab. They could feasibly make as much off this hustle as they do rentals. Hertz has been filth for quite some time. CEO is trash, employees are parasitic garbage. They throw people in jail for stolen cars that were long ago returned you name it they do it.
Its no wonder they went bankrupt they cant even run a company properly. Hang it up Hertz outside of ISPs your in the top ten of hated.
Uber or Avis, here I come. Note to Avis, etc.: Don’t follow the leader, or you’re out too.
Travel is already too filled with ripoff-uncertainty. Not going to play this game with Hertz. Sorry, Mr. Ackman…..
A discount rental company tried to charge me for a nail in a tire simply because I pointed it out to them. It could have been there for weeks. I stood my ground and they backed down as it was getting loud and there were other customers around.
Had I known it would take two bus rides to get to the rental location I’d have probably used a big name company. This was Las Vegas