Rental Car Company Woes Point to Used Car Values Falling

Over the last year, many people have written about a possible "bubble" in used car prices. They pointed to increased incentives from new car manufacturers and an increase in supply from leased vehicles being returned.

We're starting to see the evidence of lowering used car values. The latest symptom is seen in rental car profit reports. Both Avis Budget Group Inc. and Hertz Global Holding Inc. reported bigger loses than expected, and both pointed to "higher fleet costs." 

These "higher fleet costs" come from increased depreciation. Both rental car companies are being hit harder when they bring their vehicles to auctions.