Model S rentals in L.A. now as low as $65 / day - are the owners insane????

[calisnow]

I rented Model S's twice for a week each before I pulled the trigger and bought my 70D. But I paid around $200 / day (still cheap in my book for this car). I just looked on Turo and there is one Model S 85 for $65 per day, and another one at $99 - and many under $200.

I used to own a luxury car rental company and to make a reasonable profit and make it worth one's time and hassle, and account for depreciation, cost of capital, and the inevitable fender benders we charged around 1% of of the car's value per day - that's $1,000 per day for a $100K car - not $200.

And the clients paid for fuel.

Unless a person is truly desperate I can't see letting their $70-$100K aluminum bodied Tesla out the door for $75 a day (approximate take-home after Turo takes their cut, if you charge $99 per day for the rental).

The risk-reward and time-value-of-money ratios are just incredibly low.

Don't believe these rates? Here's the $65 one in Redondo Beach:

Take a trip in loaded tesla

And the $79 for a P85+ with 150 miles included:

Take a trip in Ashwin's Tesla Model S P85+

 

[Edmond]

So this is an individual. His monthly payment might be $600. Rent it 10 days, and he's covered everything. No office rent.

Maybe he's not worrying about scratches or vomit because he's unemployed and otherwise can't make his payment. And maybe he's just inexperienced and doesn't know about gangs who ship cars to South America..

 

[MikeC]

Looks like the first link is $145/day and the second is $115/day?

 

[asudan]

That's nuts. I don't know this guy's situation but putting his MS on Turo for $65/day is nuts. I get $48/day for my wife's Toyota Camry Hybrid..

 

[Mike K]

I rented Model S's twice for a week each before I pulled the trigger and bought my 70D. But I paid around $200 / day (still cheap in my book for this car). I just looked on Turo and there is one Model S 85 for $65 per day, and another one at $99 - and many under $200.

I used to own a luxury car rental company and to make a reasonable profit and make it worth one's time and hassle, and account for depreciation, cost of capital, and the inevitable fender benders we charged around 1% of of the car's value per day - that's $1,000 per day for a $100K car - not $200.

And the clients paid for fuel.

Unless a person is truly desperate I can't see letting their $70-$100K aluminum bodied Tesla out the door for $75 a day (approximate take-home after Turo takes their cut, if you charge $99 per day for the rental).

The risk-reward and time-value-of-money ratios are just incredibly low.

Don't believe these rates? Here's the $65 one in Redondo Beach:

Take a trip in loaded tesla

And the $79 for a P85+ with 150 miles included:

Take a trip in Ashwin's Tesla Model S P85+

Two things of note:

1. These prices are to entice people to rent - People on Turo like to rent cars that have been rented before. Nobody wants to be the first. Nobody wants to deal with the guy that has no feedback and no booked trips. So people in the know tend to price their car well under the going market rate just to get some rides under their belt and then raise the price. From what I recall, Turo actually recommends this when you're signing up.

2. A lot of people use this as a way to drive cars they otherwise couldn't afford - You're looking at this from a money making position whereas many of these people are just trying to break even each month and then have the ability to drive a car they otherwise couldn't afford to own. Someone else alluded to it but at the average rental rate of a Model S (about $140), take away 25% for their cut and you're at $105 per day net. Put some minimum rental times on your booking, say 3 day rentals at least, and depending on your payment/ insurance, you might meet your nut in as little as 7 or 8 days per month.

A friend of a friend out here in LA owns a 6 series convertible that he rents out. On average he rents it out half the month, doubles his car payment and drives it when it's not rented. I did the same this past summer. I almost pulled the trigger on a Porsche Cayman that I would have had absolutely no justifiable reason to purchase otherwise but I saw the opportunity to be cash flow positive on a used $16,000 Cayman to the tune of $400 - $500 a month and it was a hard proposition to pass up. Ultimately I decided against the headache at the time but now I'm back looking at other desirable yet relatively inexpensive cars to buy solely to rent out.