HUGE rental car fire in FL

[Pete Meisinger]

Generally speaking a car rental fleet has around 95% of its cars out on rental at any given time. The remaining 5% are on hand ready to go out.

It is almost exactly opposite this right now with thousands upon thousands cars parked and very few out.

Needless to say, this is causing problems. Where to park thousands of cars? In Florida they are parking them in any available space, malls, churches vacant land.

Recently there was an electrical fire on one car in the middle of thousands of nearly new cars. The result was that around 3,500 cars caught fire and burned.
(Google "Florida rental car fire")

The fire control was hampered by the size of the parking lot, the density of the parked cars and the intensity of the blaze.

Just another side tragedy of our times.

pete

 

[Woodland Hills]

This is great news for the rental people, not a tragedy: at least the cars are insured at full replacement value! Hertz alone has 500k cars in the US and another 200k overseas that are mostly sitting in lots like the one in the video. When all the rental companies downsize their fleets and they hit the auction houses in their millions the value of a used car will plummet. This is a big part of the car rental companies finances, resale of their cars, and now it’s gone just like their rental business. The low price of low mileage used cars is going to depress new car sales for years as well.

It’s looking like any business that takes place at an airport is doomed......

 

[slowgoesit]

One possible problem for the rental company(s) who lost the cars is that many of the large rental companies are self insured for collision, or loss. They keep liability insurance, and try to get the customers to pay for collision, etc when they rent, but for a car just sitting on the lot (or in a grassy field) waiting to be rented, there's a good chance that they weren't insured by an insurance carrier . . . . or if they WERE insured, and I was the fire inspector, I would look into the possibility that the cars were intentionally parked in tall grass . . . and that they fire started from a car being parked in the tall grass, the catalytic converter set fire to the grass, and the rest is smoke and charred wreckage . . . either by accident or design. After all, IF they were insured for comprehensive, and all those late model cars . . . for which there was no rental market . . . which still required payments to be made . . . while generating NO revenue . . . burned . . . and were insured . . . Interesting to say the least . . . But I have a suspicious mind . . .

 

[firehoser75]

Fire Investigators are suspicious as well. Most operate under the premise that the fire is arson until he/she can determine a "natural" cause. A good percentage do turn out to be arson. Proving WHO set it, is another issue.

 

[Pete Meisinger]

I didn't look at that side of the coin. I had heard Hertz was on the brink of bankruptcy anyway.

Just imagine what the interest on financing a half million cars would be. Even at the "hottest" price available on both the cars and the loan. (Or the lost interest if they paid cash and could be banking the money) Staggering.. then think of trying to stay afloat with little or no income, then figure in no market for resale. R.I.P.

pete

 

[syjos]

We had a tenant 10 years ago that operated an airport car rental business.

They borrowed money to purchase the rental cars and the lender required comprehensive insurance in addition to liability to insure against fire, hail, vandalism etc while parked.

The tenant was unable to make payments after 9/11 curtailed flying. They went out of business within a year owing us 4 months rent.

 

[Woodland Hills]

The cars were parked for a while before the fire broke out which argues against the catalytic converter theory. I would suspect that the vehicles were covered by insurance when they were not contracted to a customer as a condition of the purchase loan. Some may have been leased, either from the manufacturer directly or through a middleman, either way they will have been insured. Lease or purchase: it depends upon how the corporation has set up their business.

 

[MYTraveler]

This is great news for the rental people, not a tragedy: at least the cars are insured at full replacement value! Hertz alone has 500k cars in the US and another 200k overseas that are mostly sitting in lots like the one in the video. When all the rental companies downsize their fleets and they hit the auction houses in their millions the value of a used car will plummet. This is a big part of the car rental companies finances, resale of their cars, and now it’s gone just like their rental business. The low price of low mileage used cars is going to depress new car sales for years as well.

It’s looking like any business that takes place at an airport is doomed......

Are you sure they are fully insured? Insureds can save money by limiting the total coverage. So, for example, consider a real estate developer that may have a bunch of buildings spread across several states. Getting each insured for its full replacement cost is very common practice, but to save money it is also typical to buy coverage with an aggregate cap that is a fraction of the aggregate replacement cost. The insured figures that the chances of them all going up at once can be safely ignored, thereby reducing the premium almost proportionately. For reasons that make no sense to be, insurers don't also evaluate the risk of "full" coverage and charge an appropriate premium for the added peace of mind. As best I can tell, it has to do with reinsurance costs, where there isn't much underwriting beyond quantifying total risk and applying a reinsurance rate. I suspect the same is true for rental car companies -- why would they pay for a policy that covers thousands of cars burning up at once, when (in normal times) if your math is right, only 5% of the cars are close enough at any one time to have a correlated risk of loss?

 

[Woodland Hills]

Hertz alone has nearly 700k cars worldwide and 500k in the US. If there is an aggregate cap on payout 5 or 6 hundred cars at one Florida outlet is going to be under that amount. Given how many car rental companies operate at Florida airports I doubt that any one operator has more than a few hundred in that field. Remember that they have to be covered for massive destruction from events like hurricanes, so the aggregate must be pretty high even in just one state.

 

[BandB]

I'm surprised that they would have an overflow lot in grass. Doesn't everyone know the risks of parking cars in grass?

 

[RT Firefly]

Greetings,
Mr. BB. The risk with a car fire starting in a grassy area is due to the HOT catalytic converter igniting any grasses in contact with it. There is no danger with a "cold" car. It might be the fire was started by a new arrival.

 

[BandB]

Greetings,
Mr. BB. The risk with a car fire starting in a grassy area is due to the HOT catalytic converter igniting any grasses in contact with it. There is no danger with a "cold" car. It might be the fire was started by a new arrival.

Actually two risks. One is a hot car starting it. The other is spreading quickly however it gets started. Every car parked there was hot though, when parked. So just add one car to the lot and you have a potential problem.

 

[Art]

Burning rental cars is a small card in our "House of Cards"

The industry driven, non-stop, upwardly mobile height of the economically-propelled house of cards that humanity constructed over the last 150 years... was always and increasingly is always on the brink of collapse.

Infinitesimal coronavirus could "break the bank". If Covid-19 foists upon civilization severe enough 2nd and 3rd rounds of pandemic sickness/death; our global economic house of cards could first teter wildly and then topple into utter collapse.

I love boats! Know you all do too!!

Stay safe, Stay healthy