Hertz entered the pandemic with $17B in debt — and went bankrupt in three months

Hertz, one of the world's largest car rental companies, entered 2020 with approximately $17 billion in debt, much of it tied to its vehicle fleet through asset-backed financing. The business model depended on continuous travel demand and the ability to refinance fleet debt as vehicles depreciated.

When the pandemic collapsed global travel in March 2020, Hertz's revenue dropped by over 70% almost overnight. The company could not make its fleet financing payments, and lenders demanded repayment. Unlike airlines, which received government bailouts, car rental companies were largely excluded from relief programs.

Hertz filed for Chapter 11 bankruptcy in May 2020. The company emerged in 2021 after a restructuring that reduced its debt and fleet. Ironically, the used car market boomed during the pandemic, and Hertz's remaining fleet became more valuable. The case illustrated the fragility of a business model built on high leverage and continuous demand.