Trump's auto tariffs lead to surge in Hertz and Avis stocks

From Yahoo Finance: 2025-03-27 13:00:00

Stocks of car rental companies Hertz and Avis surged over 20% on Thursday, with Hertz trading at $4.15 and Avis at $74. Investors welcomed the gains as both stocks had declined significantly in the past year.

The unexpected rise in car rental stocks may be linked to President Trump’s announcement of a 25% tariff on imported vehicles and parts. This could lead to higher car prices, making used vehicles more attractive and potentially increasing demand for rental fleet vehicles.

Companies like Hertz and Avis, with large fleets of vehicles already in the country, could benefit from the tariff exemption. As new cars become more expensive, the demand for used vehicles may rise, benefiting rental companies with vehicles ready for sale.

The tariff plan could also impact auto parts retailers positively, with shares of AutoZone, O’Reilly Automotive, and Advance Auto Parts all seeing gains. Advance Auto Parts, in particular, announced expansion plans this week, contributing to its over 8% increase in share price.

Read more: Hertz, Avis stocks surge as Trump auto tariffs could make used rental car fleets look shinier