CAPE TOWN -
Car rental companies may soon be flooding the second-hand car dealership business as the car rental business plummets.
In an interview on Cape Talk, Independent motoring journalist Lance Branquinho said the car rental business was "toast".
This is due to people not being able to travel extensively for business or pleasure.
Branquinho referenced the oldest car rental company in America, Hertz, which was now filing for bankruptcy.
He said in South Africa, particularly, the lockdown imposed to limit the spread of Covid-19 pandemic, had crushed the car rental industry.
"There is a huge incentive for these companies not to hold on to cars for too long… potentially flood the second-hand car market at the time where the demand is weak… a glut on the supply side," said Blanquinho.
Car rental companies get most of their business from airport locations. They also get business from insurance companies, who provide courtesy cars to clients who have had their vehicles involved in crashes.
Meanwhile, buyers of second-hand vehicles are in a positive position as they are spoiled for choice.
"We've reached 'peak car'. Production will have to be reduced… global supply must come down," said Blanquinho.
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