After difficult years in 2025, publicly traded rental car companies Hertz Global Holdings and Avis Budget Group are betting that smaller fleets and customer-service enhancements will lead to improved results in 2026.
Hertz Corp., owner of the Hertz, Dollar and Thrifty brands, recorded revenue of $8.5 billion last year, down from $9.05 billion in 2024. The company had a net loss of $747 million in 2025, a substantial improvement from 2024, when it lost $2.86 billion.
Avis Budget Group recorded revenue of $11.65 billion, down from $11.79 billion in 2024. Its net loss was $995 million, improving from a net loss of $1.82 billion in 2024.
Combined, the two companies account for approximately 39% of the U.S. rental car market, trailing privately owned behemoth Enterprise Mobility, whose Enterprise, Alamo and National brands account for 55% of the market, according to the trade publication Auto Rental News. Enterprise does not publicly disclose financial results, though it's believed to be profitable, said Auto Rental News managing editor Martin Romjue.
For Hertz, at least, there was improving news in the fourth quarter. Year-over-year revenue was down just 1%, its best result since the first quarter of 2024.
Avis, conversely, took a net loss of $856 million in the fourth quarter, which comprised the lion's share of its total losses for the year.
On a Feb. 19 earnings call, Avis CEO Brian Choi attributed the dismal fourth quarter to the federal government shutdown, which slowed travel, leading to a 11% drop in November rental days. With business down, Avis was forced into the unusual step of downsizing its fleet at a time of year when used-vehicle prices tend to be low while dealers focus on clearing inventory of new cars from that model year.
The previous two years of difficulty for Hertz and Avis were in part due to decisions to right-size their electric vehicle fleets in the face of depreciating EV values. Hertz did most of its EV fleet adjustment in late 2023 and 2024. But Avis moved slower. In the fourth quarter, the company took a $500 million write-down to its balance sheet to account for EV depreciation.
Both companies are expecting improved performance in 2026, in part due to the fleet adjustments they've now made. Hertz reduced its fleet by 3% last year as it works to increase its fleet-utilization rate. The avearge vehicle age in its fleet is now less than 10 months, which is the youngest it's been in almost a decade, CFO Scott Haralson said during a Feb. 26 earnings call.
Hertz is forecasting a year-over-year revenue increase of mid-single digits for the first quarter.
Avis reduced its fleet by 2% last year and expects to bring down its average fleet age to less than a year by the end of March for the first time since before the pandemic.
The companies expect younger fleets to bolster customer satisfaction in conjunction with new or expanded customer-facing initiatives. Avis, notably, plans to expand its Avis First concierge service into commercial accounts this year following its leisure rollout last year. Customers who use the service pick up and drop off their vehicle curbside at airport arrival and departure lanes.
Meanwhile, Hertz has cut the requirement for reaching Five-Star status, the first status level within the Gold Plus Rewards program, to three rentals in a year or $1,000 in spending, down from 10 rentals or $2,000 in spending.
Still, said Romjue, the U.S. rental car business faces the same uncertainty this year as the overall travel industry due to weakened inbound international demand, especially from Canada.
"Whether that will be a big factor this year remains to be seen," he said.