I have a family member who looks at several cars available every morning and thinks that means they just sit around gathering dust and no one is interested in renting them. Has anyone every experienced that? I have not read one single experience of one person who lists a car and can’t rent it, assuming the price is reasonable or competitive. I’d really like to start this business but the one obstacle I keep running into is this fear that the car will sit there and not rent. Anyone ever experience that?
It really depends on the car and price, but of course a car will sit some days and not rent out everyday. I’d imagine it’s maybe a 50/50 split.
Do it under an LLC otherwise your personal liability is essentially unlimited
3 Likes
I have realized that if your car is less than $400 a month, you will make good money on Turo. By the time you list a car that is leased over $400, you will be worried about too many miles on the car, wear and tear. I learned with my Lexus. I rented it out at least 10 times at $125 a day but my monthly was stupid high. I was too worried about going over miles, someone hitting the car or whatever.
Did you have permission from the leasing company to rent it back out? Based on my research nobody permits this - although BMW launched a program last year I think where they would permit it for an extra fee.
Hacking a deal here and then renting it 4 days a month to make your money back seems like a no-brainer if you’ve got extra miles (or can rent it for enough to pay for the miles). But it’s generally not permitted.
It’s only a no-brainer if you’re in denial about how much liability you have, considering your personal insurance will probably deny any liability for an accident and Turo’s $1M policy is just way too low for a serious accident
1 Like
Ignoring being responsible for a totaled lease car (if that’s the direction one goes) being personally liable on all damages over one million dollars seems to be something no one wants to talk about. Wouldn’t even take that serious an accident to get to a million dollars in damage. Medical bills get expensive real quick, especially when the insurance company is seeking indemnification instead of arguing them down.
I wonder if there are public stories about accidents in turo cars that lead to liability for the driver.
2 Likes
Car was sitting around since we got the Volvo s90 and lexus was basically paid off. I did contact Turo about it prior to listing, they said as long it’s not in contract, they can’t say anything. I’m sure NOW every manufacture has the clause in their lease but in 2015 I didn’t see it
1 Like
I’m not an insurance expert nor a lawyer, but how could you be liable as the owner of the car if someone else uses it, while under contract assuming responsibility for that use, to cause that damage?
I agree that getting to $1m+ in damages in a car accident is easy to do, but if your car is used by someone through Turo you’d be liable behind the driver and then behind Turo. Yeah they could try to sue you but I don’t see how you could carry any responsibility. And $1m insurance will cover a lot of court costs…
From my understanding it comes down to whose vehicle is it from a legal perspective, and who let the person have the keys. If you’re leasing/financing that effectively means you. That’s normally how it works when it comes to parents taking legal responsibility for their children getting into trouble, or owners taking responsibility for things they’ve leant to other people.
Given the size of Turo now it’s only a matter of time before there’s a major accident (unfortunately) and the whole thing gets tested in court. The biggest accident I could find was this: https://jalopnik.com/here-s-what-happens-when-someone-on-turo-crashes-your-a-1792048817 but would still be way off the $1m limit.
Turo’s agreement with owner and renter is able to limit their potential liability. They essentially are a intermediary. The law allows this.
Then as ajgraham said, it’s like if your kid gets in an accident driving your car. You aren’t allowed to say it wasn’t me, not my problem. You are right that the driver is going to be primarily responsible. But asssume that driver doesn’t have insurance or has minimum insurance and has killed someone. The damages are going to be far greater than the drivers insurance/assets. Then the injured parties are coming after you.
To make it worse, the concept of joint and several liability comes into play (link below). So if you have more assets then the driver, the injured party or parties are going to sue you, force you to defend the suit and then force you to sue the driver to seek indemnification.
1 Like
All of this depends on the state. In California, owners of vehicles are limited to $15k of liability per person and $30k across all people + $5k for property damage, unless the driver is an employee of the owner. More info here. Across the US, the Graves Amendment also limits a Turo owner’s liability. Turo verifies all drivers and checks their license and before every rental the owner checks the renter’s license, which seems like a fairly tight process. You can get sued for negligence above that, but as this doc shows, that appears to be relatively hard to prove; here’s an excerpt from a case:
Blockquote [T]he tort requires demonstration of actual knowledge of facts showing or
suggesting the driver’s incompetence—not merely his lack of a license. . . . For
liability to exist, knowledge must be shown of the user’s incompetence or
inability safely to use the [vehicle].
All that said, settlements of over $1mm are very uncommon. This article suggests that only 2% of bodily injury claims settle for over $300,000. Jury verdicts are higher but few cases go to trial and many verdicts are then negotiated down.
I’m not a lawyer and of course this is all fairly complex. In New York it seems like a particular problem. But my interpretation (right or wrong) is that this may not be as big a risk as some are worried about.
This is why lawyers have to be licensed in the state they practice. You are right about California. Seems like you have very little risk exposure there.
As for the Graves Amendment, I would guess that doesn’t apply to individual who rent cars and are not incorporated. That law states there is no liability if “The owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and…”. Someone who occasionally rents their personal car out on the side, in their own name, probably isn’t engaged in the business. That is just a guess though since it doesn’t seem like any cases have made it up to the Federal Circuit courts concerning car sharing liability.
If you were incorporated as a car renting LLC, it would almost certainly protect you.
1 Like
That seems like a good question and you’re right about state by state.
As someone who rents their cars Turo I will say the other thing is that people will never treat your car as well as you do. If you’re okay with that I think it can be a great option. It’s especially fun if you buy a used near-exotic and rent it out most of the time and keep it the rest (e.g., a 911 S can pay for itself). If you’re renting out your daily driver you should be a fairly tolerant person.
So just scored my Giulia Ti Sport a few months ago and have quickly become a huge Alfa fan.
Anyways - we are going to be having a little stay-cation in the next month or so and thought for some added fun, maybe “rent” a car through turo for the weekend. There are two Alfa 4C that I’m considering and both are two days minimum, which is fine with me 
Is there anything I have to be careful with … insurance, scams, etc?
The review for both “sellers” are positive.
Thanks
Search the forum
I used Turo to rent a BMW 335GT when I was in Kauai a couple years ago. Experience was great. Last year we were flying into Portland to head to the Oregon coast and I reserved a RR Sport. As i was boarding a flight I received notification that the owner cancelled. Had to scramble to get a last minute rental. Turo was no help.