Can You Make Money Renting Your Tesla Model S To Strangers? My Experience Doing It

7 months ago by Dan Zorrilla 42

Thinking of renting out your Tesla Model S?

A few months after buying my Certified Pre-Owned 2013 Model S from Tesla in January 2016, a friend told me that people were renting their Teslas out and covering their car payment with their rental income.

At first, I thought they were crazy to rent out their brand new $75k+ cars to total strangers. Then, in November 2016, I came across an article indicating that Model S owners were averaging $923 per month renting out their Teslas on Turo by renting them just seven days per month. After Elon Musk himself re-tweeted the article, curiosity got the better of me, and I decided to investigate further.

Tesla Model S rental tweet

If you are unfamiliar with Turo, it is basically Air BNB for cars. It is a peer-to-peer car rental app that rents anything from a Honda Fit to an Audi R8 and everything in between.

I began looking at rental prices for Model S and saw that people were charging between $100 and $400 per day in most markets. I decided that I would give it a try for just one rental to see what all the hype was about and to determine if you could actually make money off of this idea.

Listing your car on Turo is pretty quick and painless. You just input your vehicle year, make, model, select your car features, create a description, and upload a few pictures.

You then select the days and times that your vehicle is available, the allowable miles, and whether you are willing to drop the car of. As far as pricing, you can let Turo price your car at the market rate for your vehicle, or you can input your own rate. Additionally, if your car has a market value of over $55,000, Turo allows you to set the rental age limit at 30 years old. I opted for this because I was worried that  younger renters might just be interested in taking a fast car out for a joy ride.

Turo insures the vehicle at three different levels based on your risk tolerance. Turo keeps a corresponding share of the rental price based on the coverage level. I went with the ‘Turo Standard’ coverage that allowed me to earn 75% of the rental price.

Some rental details

After a couple months, I received my first request from Nick.

Once you get a rental request from Turo, you have to either accept or deny the offer. Nick had never rented through Turo before. This immediately made me nervous, but after investigating Nick, it seemed that Turo did some basic background check on him before allowing him to rent.

After asking Nick a few questions about his intent and plan for charging the car, I accepted his offer.

It seems like you need to have one rental accepted before your vehicle becomes more visible to renters in the Turo app because almost immediately, I started receiving requests more frequently. I really wanted to complete one rental before accepting additional requests, but I also didn’t want my Turo rating to suffer by declining all of the offers coming in. So, I accepted all of the offers that came in thinking that I could always cancel them, if the first rental turned out to be a disaster.  

A few weeks later, I had a rental offer from Frank, who would turned out to be my actual first rental.

Another message

I accepted his offer, but immediately began regretting my decision. I started worrying about what could happen to my car letting a total stranger borrow it for the weekend. I looked into increasing the insurance coverage to the ‘Turo Premium’ coverage level to have any nick or scrape covered, but Turo does not let you modify coverage for existing rentals.

I had the car fully detailed and took all of the pictures that Turo prompted me to take of the car prior to the rental, presumably to establish the state of the car if there was an accident. I met Frank and his wife at Tampa International Airport for their vehicle pick up and was so nervous that I forgot to check Frank’s driver’s license or record the current mileage on the car. However, once I saw that Frank was wearing a Tesla shirt, I knew I didn’t have much to worry about. As a Tesla enthusiast, I knew he was not renting the car for a joy ride, but just wanted to experience it.

I don’t know how nervous I looked, but Frank completely put me at ease and said that he would treat my car like his own. It further relaxed me that I could check on the location and state of charge of my car with the Tesla app at any time. The rental was thankfully pretty uneventful and I met Frank and his wife back at the airport a couple days later for their flight back home.

My next renter, David, rented the car as a present to his wife, Sandi. Sandi was even more of a Tesla enthusiast than Frank. She was downright giddy about Tesla and made sure that I took note that she was also wearing a Tesla shirt when I told her that my first renter had worn one. Sandi was so thankful for the experience, that she gave me a gift when she dropped the car off, a replica Tesla Supercharger:

Replica Tesla Supercharger

Although I was nervous about renting my Model S out at first, I am now comfortable with it. For the most part, all of the renters have been a Tesla enthusiast that either have a deposit on a Model 3, or were interested in purchasing a Model S, but wanted to try it out for longer than a test drive. After six rentals, I have had no issues with any of the renters.

The downside of renting is getting the car cleaned prior to a rental and coordinating transportation to and from the drop off location. If you work full time like I do, it sometimes means leaving work to meet renters. Then you have to coordinate someone to pick you up, take an Uber, or rent a car. All of these things obviously cost money and eat into your revenue. So, if you don’t have a flexible schedule, an extra car, and someone to pick you up, renting your car could get pretty costly. I haven’t calculated what my actual expenses were in January, but I do know that I made $1,400 in revenue in January by renting out my three year old Model S. That is definitely not bad, and is more than enough to cover my car payment, insurance, cleaning costs, and transportation costs. If I had known this was a possibility when buying my car, I may have opted for more options, gotten a newer model, or maybe even have purchased a new Model S.

I recently noticed that there are only two Model X’s for rental in Florida, and both are a few hours away from me in Miami. One has a rental price of $350 and the fully loaded one is $450. I’d have to get my wife’s approval, but it might be time to expand the rental fleet!

Shameless plug: If you are ever in the Tampa Bay area and want to drive a Tesla, feel free to rent my Model S: https://turo.com/rentals/cars/fl/largo/tesla-model-s/156845


Update (02/28): After reading this article, Dan’s first renter, Frank, informed Dan that he had cancelled his Model 3 deposit and instead ordered a Model S based on his rental experience. This shows that renting EV’s not only helps supplement owners’ income, but also helps spread and accelerate EV adoption. An excerpt from Frank’s email to Dan:
“…I’ve been meaning to contact you.  I couldn’t wait for a Model 3 so on 2/3/17 I ordered a brand new MS 60D.  I’m super excited and expect to take delivery before March 12th….You gave me my first Tesla experience and I am very thankful for you allowing me to share your special car. I now soon will be part of the club!…

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42 responses to "Can You Make Money Renting Your Tesla Model S To Strangers? My Experience Doing It"

  1. (⌐■_■) Trollnonymous says:

    No thanks.
    I don’t want vomit on my car when it comes back.

    1. ¯\_(ツ)_/¯ sven says:

      In addition to vomit, Uber & Lyft drivers also
      have problems with people peeing in their cars.

  2. MTN Ranger says:

    I checked out some of the rentals in my area and they have a Model S and a Leaf. Interesting, buy a used Leaf for $6k or so and rent it out 7-14 days a month and break even would probably be around 2-3 years. Low maintenance costs for a BEV would definitely be an advantage.

  3. MDEV says:

    I guess renting a car void the warranty?

    1. (⌐■_■) Trollnonymous says:

      Not sure what the insurance company thinks about it either.
      😛

    2. Devin Serpa says:

      No?

    3. Dan says:

      It doesn’t void the warranty. Why would Musk Tweet about it, if Tesla didn’t want you to do it?

  4. no comment says:

    if this is what you have to do to buy a model S, then you can’t afford the car.

    1. Michael Will says:

      Except maybe that is a good way to spread the love of electric cars and afford a higher trim model than you would without. I have only been on the renter side so far, and it was crucial for me in convincing my wife that replacing our Honda Odyssey will actually work for the family. I spent about $2000 renting Model S’s until I was allowed to buy our own Model X 🙂

  5. Devin Serpa says:

    I’ve rented from Turo three Model S’s, and i3 EV, and a Cadellac ELR.

    Fun times.

    1. ijonjack says:

      Fun times at the race track Just running the Living Sh*t out of it… lol

  6. Somebody says:

    Anyone who has to do this to make their Tesla car payments is “faux rich” and should have bought a cheaper vehicle.

    1. Michael Will says:

      Disagree categorically. Why would you force somebody to stay with legacy gas cars if this works for them… once you are used to driving teslas you really don’t want to go back to a shuddering, stinking, mediocre performance gas car that makes you go to gas stations all the time.

    2. DJ says:

      Do you feel the same about people with investment properties or vacation homes? Rich people generally aren’t stupid and if I can get someone else to pay for something that I can use well then awesome!!

      Owing a vacation home that you rent out in Hawaii is awesome. Gotta fly over there for a week or two for repairs periodically with the family. Even better when Uncle Sam gives you a break on it 🙂

  7. ModernMarvelFan says:

    This is no different than renting from the Prestige class vehicles from companies such as Hertz, except you have more choices and flexibilities.

    But the interesting point is that if the rental car break down on the side of the road or it has a problem, who is responsible for it? Turo or owner?

    1. Michael Will says:

      Does Hertz Prestige class have Teslas by now? The main reason why I used turo before was because they were the only game in town to get a proper electric car.

      1. Tim F. says:

        I received an email from Hertz last week featuring the Model S, so apparently they have some. Not sure which or how many locations have them though.

    2. Dan says:

      “If you select a vehicle that is covered under one of Turo’s protection plans, you can be connected (free of charge) with a dispatcher who will be able to send out a service provider if there is an incident with your rental vehicle 24 hours a day, seven days a week.”

  8. time says:

    $1 million liability cost is not enough. What happens if you person runs over a group of people severly crippling them?? YOU will be responsible because it is YOUR vehicle and you will be sued for your pants. Also, parking tickets, red light tickets, will go to you since the renter can just throw it away. Screwed.

    1. Dan says:

      Why would you be responsible? You did not kill the people, the car did not kill the people, the driver did. They can sue you, but ultimately, you didn’t kill the people. $1M should be more than enough to cover your defense costs, or cover your proportional share of the liability, which couldn’t be that much.
      Tickets come to you, you submit to Turo, they charge the renter. Just like Avis would do.

      1. fotomoto says:

        “Why would you be responsible? You did not kill the people, the car did not kill the people, the driver did. They can sue you, but ultimately, you didn’t kill the people.”

        Naive assumption. Spend a full day sitting in the galleries of your local courthouse. Folks get sued for ANYTHING. You still have to pay a lawyer tod (hopefully) get you out of the mess and a good lawyer for the other side can get enough doubt in a dumb jury that you’re at least 1% responsible for the accident. 1% of a multi-million judgement isn’t chump change.

    2. Pushmi-Pullyu says:

      “time” wrote:

      “What happens if you person runs over a group of people severly crippling them?? YOU will be responsible because it is YOUR vehicle and you will be sued for your pants.”

      Now, is this just Tesla-bashing FUD, or do you really think that in a motor vehicle accident, it’s the vehicle owner who is responsible for accidents, and not the driver?

      If this is what you actually think, then you have a lot to learn about both responsibility and the law as they apply to operating a motor vehicle.

      1. ¯\_(ツ)_/¯ sven says:

        Nope, wrong again Pu-Pu. You’re the one who has a lot to learn about both responsibility and the law as they apply to operating a motor vehicle. If a car owner gives someone permission to drive their car, and then the person who borrowed the car causes an accident, then both the driver and car owner are liable for damages. However, if someone steals a car or borrows a car without permission, then only the driver is liable for damages from a accident that he causes. One caveat, if the owner left the keys in the ignition and the car is stolen, then in most states the owner is deemed to have given the thief implied permission to use the car, and would be liable along with the thief for an accident caused by the thief.

        Most states have joint and several liability, which means that a plaintiff may recover all the damages from any of the defendants found liable regardless of their individual share of the liability. The defendant who pays must then pursue the defendants found liable for a contribution to their share of the liability. This means a defendant that is only 1% liable can be made to the entire judgement. That’s why lawyers sue everyone and then look for who has the deep pockets. If every potential defendant is judgement proof (has no money, assets, or insurance) then there is no point in suing and no lawyer will take the case.

        https://en.wikipedia.org/wiki/Joint_and_several_liability

    3. time says:

      if the driver does not have sufficient insurance, they will come after YOU to supplement.

  9. Wade says:

    If anyone wants to try a Signature P85 in the Bay Area, feel free to contact me. $25 off if this is your first Turo rental

    https://turo.com/rentals/cars/ca/san-carlos/tesla-model-s/160433

  10. Pushmi-Pullyu says:

    @Dan Zorilla:

    Hey, thanks for sharing!

    Well, if it’s a setup like Air B-n-B, where there is a lot of contact before the rental between renter and rentee, then I suppose that would be a positive experience, with the car owner unlikely to discover vomit in the carpet, or stains and/or cuts in the seat covers.

    This is very far indeed from previous descriptions of using your car to generate revenue, which made it sound like an automated taxi service, where your car would be available to rent at all times you weren’t using it, and where you’d never see or talk to the people who rented the car.

    * * * * *

    Despite the positive story here, I remain very skeptical this sort of thing will ever become commonplace, just like it’s not commonplace for people to rent our their home’s guest rooms on Air B-n-B isn’t commonplace. Even Dan mentions the hassle with having to take time off work to drop off or pick up the car, as well as the problem of how to get from the dropoff point back to your home when you’ve just loaned your car to someone else.

    I understand that Air B-n-B is quite popular these days. But if you consider the percentage of home owners who are renting out rooms on that service, I’d guess that percentage is quite low. The idea that in the near future, enough people will rent out fully autonomous vehicles that this will result in a significant drop in the percentage of people owning cars… well, as I said, I remain very skeptical.

    Air B-n-B hasn’t made a noticeable dent in either people buying homes or in the number of motels, and similarly I don’t see people renting out their cars to strangers putting a dent in personal car ownership.

  11. cab says:

    I have to admit, given that I work from home and my car Tesla sits there day after day like the giant, massively depreciating asset that it is…this does have some appeal. As pushmi points out though, the “hassle” factor (given that I am on conf calls working every waking moment) would make this difficult to pull off. I do live close to the airport though…hmmm.

    1. Roberto says:

      Do it!

  12. John Adkison says:

    I used to rent my vehicles out via RelayRides (before it became “Turo”), until one of my vehicles was in an accident and they wouldn’t cover the diminished market value. I even won a judgement in court, but they still did not pay. Just be aware that you *are* taking risks by renting out your car that they will *not* protect you from.

    1. Michael says:

      This guy speaks the truth. There is a reason Relay Rides rebranded.

    2. ¯\_(ツ)_/¯ sven says:

      You got off easy compared to some dude in my area that rented out his house for the weekend on Airbnb and got totally screwed. His house was actually a houseboat that he rented out for $1,250 a night.

      In the Airbnb listing, the houseboat owner wrote: “If you are not CLEAN…Super clean and very responsible please do not even consider staying on this boat! THIS IS NOT A PARTY BOAT.” Later on, he writes, “You are an adult and should know how to respect other people’s property. Don’t f*ck this up for those people who don’t even need to be told ANY of this.”

      The renters promised him, no parties. But low and behold, the owner came back Sunday night and found that the renters sank his houseboat. And apparently, the houseboat owner didn’t have insurance to cover the loss.

      http://gothamist.com/attachments/nyc_ntempey/160718BenSargentHouseboatSinkAirbnb.jpeg

      http://gothamist.com/2016/07/19/airbnb_sink_houseboat_rockaway.php

  13. Tom says:

    Couple additional points.

    1. Sounds like a great way to get heavily fined by a city or state for operating an unlicensed rental car business.
    2. Sounds like a great way to get heavily fined by a city or state for not collecting all the special rental taxes.

    1. Dan says:

      Turo’s website says it is legal in all states, except New York. Is this just your gut feeling, or do you have some support for these points?
      https://support.turo.com/hc/en-us/articles/203991850-Is-it-legal-for-me-to-rent-my-car-out-Is-it-okay-with-my-personal-insurer-

  14. Michael says:

    I rented out my BMW on Turo for over a year. Good and bad to it. People never fully return it clean and if it is dirty Turo asks for pictures. But I took my car off after my car was involved in a crash, insurance scam, flat tire, denied claim and this was only one rental!! The sad part is Turo who used to be called Relay rides, denied my claim against the renter and deactivated my account. In order to win the case, I needed security proof from my garage security company, Metro Mile GPS data to prove I wasnt driving!! Took over a week before Relay Rides reactivated my account and had my front bumper repainted and a new run flat tire.

  15. Scott B. says:

    I’ve rented my 2013 MS out twice. Both went perfectly, and one rental was for nearly 2 weeks. With about 14 days without my car, I was able to more than cover 2 months of my car payment. Oh, and BTW, I CAN afford my car payment, but honestly, who would refuse the extra income? If you compare the purchase price vs. rental rate (especially on older MS’s), teslas are very favorable compared to most other vehicles.

  16. moneymaka says:

    Dudes think of all the loot you could find in your CAR!!! free wallets, phones, ipads, macbooks, handbags, briefcases, rings, gold chains… you will be filthy rich fast.
    easy money

  17. silversod says:

    Good heavens NO, I cant imagine the increase in insurance premiums to cater for that as well as the taxman taking a great chunk also.

    I don’t think I’d want the “boy racer” renter comparing it’s 0-60 mph at every chance.
    absolutely no way would I entertain a cockamamie idea like that at any price.

  18. I’m renting out my Model X in the Bay Area right now. So far, it’s been a great experience and renters are respectful.

    I have the car parked in a 24/7 valet garage so I don’t need to physically meet each renter. As a full time attorney, this is a huge efficiency gain. I’m looking at around 1600 in revenue in my first three weeks. Parking in San Francisco is expensive AF though…

  19. Ken says:

    You want to make sure that your insurance company is ok with renting the vehicle out. Many policies in CA void the insurance if the vehicle is used “commercially” and I suspect renting it out falls under that clause.

  20. Bacardi says:

    Why even publish this story with a line like this? “I haven’t calculated what my actual expenses were in January, but I do know that I made $1,400 in revenue in January”

    After direct expenses like cleaning, initial fuel, getting a ride from and to the airport, cleaning, insurance and Uncle Sam’s cut, you have to look at wear parts like tires and depreciation…

  21. GSD Rides says:

    We at GSD Rides use Turo as an alternative rental platform for our Model S & X P90DL’s. We even have our BMW I8 there. Turo is a better alternative for renters then conventional car rental companies. Plus can’t beat the choice of normal daily driver or an exotic super car at your finger tips to book.

    If any interest in the Boston / New England or Maui area. Feel free to contact us.
    http://www.gsdrides.com

  22. well i have my bmw i3 on turo … people are very respectful and no problem at alll …. i have 6 other booking for the next month …. love it

    https://turo.com/rentals/cars/fl/hallandale-beach/bmw-i3/156397