Turo - Why it did not work for me - Insurance - Liability
Updated: Oct 12, 2022
Turo - What is Turo? Easiest way to think of Turo, it is just like Airbnb, but for cars instead of houses. Yes, that is correct. You can go to Turo.com or download the Turo app, browse different cars in your area, and rent a vehicle from some one in your area. As someone who loves cars, and new business adventures, Turo caught my attention for years. It is now super hot in a lot of areas, and I tried to get in on the action too. Turo markets their app and their concept as a App and a bridge between people who want rent a vehicle, and people who want to rent their car out and make a little extra money, or even a whole rental company via the app. Sounds simple enough right?
Unfortunately it is not. I am going to cut to the chase and tell you this. If you are trying to run Turo as a side hustle like I was planning, don't even bother. Not only does it take a lot of time to pick up and drop off your vehicles, you need to wash and maintain your vehicles after every rental to make sure that your vehicle is up to par. But more important than time, I found out a little late about all the liability issues that come along with renting your vehicle out to some one.
Turo does provide up to $750,000 in coverage to the host. $750,000 is a lot of money when it comes to most accidents. Unfortunately, major accidents that involve major injuries, fatalities, major property damage, etc can easily result in claims in the millions. Generally speaking if your renter causes one of these catastrophic accidents, and does not have any insurance, nor does the renter have any assets, guess what - the other parties insurance and attorney is going to come after your insurance (Who is going to deny any claims because you are not supposed rent your car out in the first place) and then they are going to try their best to put you at fault and come after you.....possibly garnish your wages (Which happens quite often). After that your insurance company is going to drop you. I have even seen car dealers ban people from buying any more cars once they have been flagged as putting their vehicles on Turo.
Does that mean Turo does not work? No of course not! Turo can and does work for a ton of people out there. However, you have to do it the right way. Open a LLC, have your vehicles in your Business name (That's correct, not your personal vehicles), have hardwired GPS and kill switches, and have commercial insurance on your vehicles. Possibly even Umbrella insurance. Make sure you are protected before you put yourself out there like that. I still believe Turo is a great concept, however I do think that some more laws have to be put in place before you hand your keys over to a total stranger (Like we went through did with Airbnb, Uber, etc. Turo is still a pretty new concept to a lot of people). I joined a Turo Facebook group and oh boy, there are people who rent your car to commit crimes, total your car and leave it in the middle of no where, or recently I even heard about people who rent your vehicle, drive to where they needed to go, and then contact Turo and tell them the vehicle feels unsafe. What happens then? The customer is automatically refunded, and the host is responsible for towing the car back. (This is another reason I say Turo is not a good option for a side hustle, especially if you have a full time job).
There are a lot of people who are running Turo without any of the above mentioned precautions, and are still doing well, however don't forget once your personal insurance finds out you will get dropped by them. If your vehicle is paid off your are ok, but if you vehicle is financed, your contract states your are not allowed to rent your vehicle out. I have heard of Ally bank actually sending out warning letters and even repossessing vehicles that are on Turo financed by them. Again, I am not trying to stop people from hosting on Turo, I actually want to host on Turo in the future still. I just want people to get all of their information before jumping in to something this major.
What about Turo for Guests? Turo is awesome for guests!
For picky people like me, I love the fact that I can take my sweet time and browse through the app before picking the vehicle that I want to rent. When you go to a standard Rent a Car place like Hertz or Avis, it's more of a I want a sports car, or van, or truck, very generalized. However on Turo, you can book the exact make model color style that you want and see exactly how much it is going to cost you before doing it. One bad thing about Turo though, your personal insurance and/or your credit card insurance coverage does not consider Turo a real rental agency and will not cover your vehicle.
As you can see in the picture above, instead of renting an exotic, or a European car like I prefer, I decided to go with a V8 5.0 Mustang GT. It has been years since I have driven a 5.0 so I knew this was going to be fun. Once we chose the car and paid for the rental, we made arrangements with our host to pickup the vehicle at a local casino parking lot. Once I got to the vehicle, the host asked me to send him a picture of myself, in front of the vehicle, holding my drivers license. Once I was verified, the host gave me the code to the lock box, and off we were!
Before we actually started driving the vehicle, we took about 30 or so pictures of all the dings and small dents on the outside of the vehicle. There were so many blemishes on this car that is only 2 years old it was ridiculous. I really wish people (Guests) would take better care of their rentals. Like the picture above, how and why did you even break the AC vents?
You can tell this vehicle has been rented out quite a bit. 2 year old car already had more than 70,000 miles? Once I started the vehicle, the roar of the 5.0 Mustang rattled the whole parking garage. Once I pulled out on to the street, I was actually impressed. There was a little bit of jerking, but other than that, the vehicle actually ran well for a car that had 70,000 miles. Of course there were other minor issues that we found along the way like minor rattles and fan noises, but again for a rental with 70,000 miles, was not bad at all. We really enjoyed driving something different around Las Vegas for the day. Once we were done with the Rental, we filled up the car with Gas, uploaded a picture of the receipt showing that we put Premium 91 Octane gas, and then took back the exact same spot where we originally picked it up. We put the key back in the lock box, texted the host, and that was it! Of course we took like 30 more pictures of the car to show that it is in the exact same condition as when we rented the vehicle.
Once again, I love the concept of Turo. It was such a good experience renting on Turo as a guest. And I really hope some day soon, more rules, regulations, and laws are set in to place that protect hosts (and guests) a little more so that more people like myself can get on the platform and not have to worry about liabilities. I emailed Turo a few times asking what happens to cases that exceed the $750,000 limit, and the only response I was able to get was "That is case by case". After consulting with a few Lawyers and people who are in the injury field, I have come to the conclusion that even with all my research and preparation, it would not be a good idea to become a Turo Host. Especially with a full time job.