The “Airbnb” of cars is here and it’s been here but right now it’s having its moment.
What Is Turo?
Turo has been called the “Airbnb” of car rentals, and while I hate to say that it’s the “x” of “industry group” it’s the fastest way to explain it. Turo allows vehicle owners (“hosts”) to rent out their own vehicles on the Turo website at a rate of their choosing. Turo collects a commission for hosting the listing, taking payment, and arranging insurance with vehicle owners collecting 15-40% for their services and access to the car-sharing marketplace.
Turo makes it easy to see how much your car could be worth on a monthly basis with its “carculator.” Below is an example of an entry-level 2018 BMW 328 xDrive in Denver, CO.
I looked at what the current payment on the example car would be. At 5% interest on a 60-month term with a $28,000 acquisition price, an owner can certainly earn extra money renting out their own car. I have a friend in Hawaii that built his business first with Turo and then expanded into his own Jeep rental company so it can definitely grow into a standalone business.
This vibrant community allows hosts to rent out their vehicle while they are out of town or if they have an excess car, truck or SUV.
When Is Turo Most Valuable?
When I was traveling for work every other week, Turo would have made a lot of sense. The monthly cost of my own vehicle was already part of my expenses, turning revenue from that for half the month would have been more or less, free money. For car owners that have an extra vehicle, this could also be a good source of extra cash every month.
For renters, Turo is perfect for a few key situations.
For example, let’s say that you’re taking a road trip but need a specific car; traditional car rental companies allow renters to choose from a selection of cars. An Intermediate car may be a Hyundai Sonata or similar but what you find when you arrive might be very different. The trunk space in a “full size” Ford Fusion is far smaller than a Chevrolet Impala so if that’s why you are renting that size car, you may be disappointed when you arrive at the rental counter. Turo is a specific car and you’ll know exactly what it is before you rent it.
Another reason renters find Turo valuable is when demand increases dramatically for a particular area and elevates prices. Turo owners set their own pricing and the savviest ones will shop the market to ensure they are in line with the cost to book cars in their area. But an owner would have to frequently check rates to stay on top of changing prices and decide how much they want to rent their car based on the daily rate they set. Renters usually have the advantage in this situation.
Why Is Turo Having Its Moment?
The San Francisco company has been around for several years but right now, Turo is having its moment. Car rental companies throughout the United States (and even in Canada and the UK) faced a unique problem with the pandemic. They couldn’t buy as many new cars (due to both demand and a chip shortage) but with domestic travel at elevated levels (because of border closures) this has put a pinch on available assets which has created sky-high rental car rates for renters.
As travelers begin to look for other options to avoid unbelievably high rates, Turo is a great option. The supply of cars is expanding and it’s increasing its unique selection of vehicles. For reasons of cost, availability, and certainty, Turo is increasingly becoming a viable option for renters and car owners alike.
In terms of service, Turo offers a varied reliability factor because each host operates differently. That said, when comparing rates for an upcoming trip, I was able to find the perfect car for my needs for less than half my favorite rental car company. I’ll pay a little more than the market rate for access 24 hours a day, loyalty points, and comfortability.
However, as a partner in a travel agency, I’ve even advised my own clients to book with Turo for specific vehicles given current rates and included liability insurance.
What do you think? Have you rented with Turo? Are you a vehicle owner that’s considered Turo?