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Hertz takes aim at automakers with new car subscription service

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Car rental giant Hertz has joined the growing list of automakers and tech companies offering a monthly subscription service as an alternative to buying or leasing. The firm launched a program named Hertz My Car in Austin, Texas and Atlanta, Georgia to fend off competition coming from all sides of the industry.

Still at the pilot stage, Hertz My Car gives motorists access to a wide range of vehicles, but it only lets them swap twice a month. The program is split up into two tiers. Priced at $999 per month plus tax, the first tier lets users select full-size sedans like the Honda Accord, small trucks such as the Toyota Tacoma, plus small SUVs and crossovers like the Honda CR-V. Those who step up to the second tier will need to pay $1,399 per month plus tax. In exchange, they’ll gain access to bigger SUVs like the Jeep Grand Cherokee (pictured), full-size trucks like Chevrolet’s Silverado, and luxury sedans like the Lincoln Continental. They can also reserve any of the cars from the first tier.

The aforementioned prices include the cost of using a car for a full month, insurance, maintenance, wear-and-tear items like windshield wipers, plus roadside assistance. Hertz also adds a subscription to SiriusXM satellite radio. Hertz My Car users only need to pay for fuel. Whether the program is a good alternative to a traditional lease largely depends on how much a person pays for insurance.

There are strings attached. To be eligible, motorists need to pay a one-time $250 enrollment fee. They must be Hertz Gold Plus Rewards members, they need to be at least 25 years old, and they need to have a good credit rating. There is a 2,000-mile monthly limit, and users aren’t allowed to drive out of the country, though they can go anywhere in the United States.

The ongoing shift in how consumers acquire and use cars has thrust rental car companies and car companies into a tussle. Automakers like Volvo, Lexus, Mercedes-Benz, and Porsche offer subscription services that give motorists access either to a specific car or to a pool of cars for a flat monthly fee. Subscribing to an S60 through Care By Volvo costs $750 a month, for example, and that price includes insurance, maintenance, plus wear-and-tear items like tires. Hertz isn’t the first to fire back; rival Enterprise announced its own subscription service earlier in 2019.

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