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