Owning A Car to Rent

[Mike K]

I'm always trying to think of ways to make a buck and simultaneously get what I want. I've been trolling car share sites like Relayrides.com for different higher end models to see what they rent for and how often they're rented out and it seems like you could pretty easily pay for a car with your proceeds and use it when it's not being rented.

A used Tesla Model S would cost me ~$60,000 with about 30k miles. They rent for about $200 a day and most of the ones I saw were rented out for about 12 - 14 days a month. That's a total of $2800 a month. If put nothing down it would cost about $900 a month on a 60 month loan with nearly no interest. Insurance adds about $120 a month. I'm going to estimate $200 a month for maintenance.

Total monthly expenses: $1220

Now let's say I lower my price to $160 a day to take into account future price drops. At 14 days rented a month I'm still at $2240, a full $1000 over my expenses.

Potential Upside:

- Make a profit
- Minimal risk (If it doesn't pan out I simply sell the car and I'm out the cost of depreciation which for a Model S isn't very much right now).
- Use of the vehicle when it's not being rented
- Free parking at LAX when we go to Chicago as relay rides will just rent the vehicle out of the airport.

Potential Downsides:

- Vehicle isn't rented enough to pay for itself (though there's a lot of wiggle room in the numbers and it would have to be rented nearly never to not pay for itself).
- Miles are being stacked on the vehicle
- Damage from renters
- Newer models force daily rental price to a point where it's no longer feasible for the car to pay for itself.

What say you guys? Anyone considered it? Relay rides will let me park at LAX and while I'm out of town they'll rent out the car, give me free parking, the proceeds from the rental, etc. And when I'm in town I simply meet the renters myself.

My worst case scenario seems to be the car only pays for itself and if I got use of it the other 50% of the time I'd even be fine with that. If it makes money than it's potentially something I could do with higher end cars. For instance, a lot of the exotic rental places out here don't own their cars. They're renting privately owned cars.

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[Turbocharged400sbc]

renting an electric car would be a great way to swap broken parts over to your car and fix theirs.

im pretty sure it hasn't changed but i know rentals were always a good source for expensive parts to swap out.

make sure you put an identifying mark on the battery pack and check after every rental. someone with a high mile one might rent yours for a few days so they can get a low mile pack.

 

[Gone_2022]

200 dollars a day for a tesla model s? Try more like mid 400s. Also 60k done over 60 months with Zero interest is 1000 a month. More like 1200-1400 after interest

 

[OffshoreDrilling]

You seem to be in a solid financial situation and the payment on the car in the first place really isn't much of a concern. You want the car, buy it. If the rental thing pans out, great. If it doesn't, and you decided to sell the car again, big deal. You got the toy you wanted and it took owning it for a bit to get the bug out of your system.

My personal concerns would be wear and tear on the car, and having it available when I actually want to use it.

 

[Gone_2022]

http://hertzdreamcars.com/vehicles/tesla-model-s

 

[Gone_2022]

I wouldn't do it for 2 reasons. Well actually 3

1. The people that could rent the car may not be used to an all electric high end car. (Run out of battery, break something expensive etc)
I also feel like insurance on a vehicle used as a rental to consumers would be more than 120 per month.

2. It has a giant awesome screen in it. Going back to number 1. A good way for someone who will probably never own that car to get into an accident while pressing crap on the screen.

3. I'm super selfish and I would want to drive it everyday all day lol

 

[cacicgtp7]

Just doesn't seem worth the hassle or headache. In theory great idea - not sure if it would fully pan that way. People treat rentals....like rentals.

I'd lose sleep over the 50 door/bumper/paint dings that would occur in the first month.

 

[BrianG]

You've been doing business for a long time, so I assume you have the ability to take credit cards, but have you looked into what technical and legal hurdles there are for securing a large amount of money on a renter's credit card if they bring it back with significant or expensive damage? I too, feel like full coverage on a car like that being rented will far surpass $120/mo. That sounds more like what I'd expect to pay for personal use.

 

[Yaj Yak]

doesn't relay rides, or whatever service you use to rent the vehicle out, have a blanket insurance coverage situation...

 

[sickmint79]

i have never seriously looked into this option like you have. although i am aware of it. ideally i'd want to talk to multiple car owners before i tried my hand at it. i think you are particularly vulnerable with an all electric given how the new technology will devalue the old, then again musk has guaranteed some resale value personally iirc.

 

[Gone_2022]

Also something to consider. This is a high end vehicle. Customers are not going to want to rent a vehicle with 60 or 70k miles or above and pay you top dollar for it. Enterprise rent a car changes out their fleet usually in the mid 30s range.

 

[Yaj Yak]

Also something to consider. This is a high end vehicle. Customers are not going to want to rent a vehicle with 60 or 70k miles or above and pay you top dollar for it. Enterprise rent a car changes out their fleet usually in the mid 30s range.

or way, way way way way sooner than that.

 

[Gone_2022]

i have never seriously looked into this option like you have. although i am aware of it. ideally i'd want to talk to multiple car owners before i tried my hand at it. i think you are particularly vulnerable with an all electric given how the new technology will devalue the old, then again musk has guaranteed some resale value personally iirc.

To get that resale value you have to finance with their lenders. Also it must be new and it must be financed for at least 36 months. Excessive mileage of 15k or more per year will reduce the value significantly. It also has to have inspections every year.

 

[snakebyte]

I actually know 2 people who do this quite often who live in Laguna. 1 has a 2004 or so Boxster with mileage in the low 100's and is still able to rent it out for like 100 bucks. The husband has a HSE Rover, unsure of mileage and is able to rent it for around 120 or so. Most people will rent the car for a day or so to go on a date etc, which brings it back to WHO is renting it. The girl with the Boxster states its usually younger kids in their teens or low 20s trying to impress their gf on a date. You also need to find out what % the company your going through will take. I think the one she uses takes something like 25% of each sale.

 

[EmersonHart13]

Would












Not

 

[Mike K]

renting an electric car would be a great way to swap broken parts over to your car and fix theirs.

im pretty sure it hasn't changed but i know rentals were always a good source for expensive parts to swap out.

make sure you put an identifying mark on the battery pack and check after every rental. someone with a high mile one might rent yours for a few days so they can get a low mile pack.

I think most people renting a Model S wouldn't also have a Model S and most owners of Model S's probably aren't too knowledgable about swapping parts. That concern alone wouldn't deter me from doing this.

200 dollars a day for a tesla model s? Try more like mid 400s.

I'm not sure I understand what you're saying. It's not mid-400's out here. It's about $200 - $295 a day. As far as zero interest

Also 60k done over 60 months with Zero interest is 1000 a month. More like 1200-1400 after interest

Absolutely no idea what this statement means.

You seem to be in a solid financial situation and the payment on the car in the first place really isn't much of a concern. You want the car, buy it. If the rental thing pans out, great. If it doesn't, and you decided to sell the car again, big deal. You got the toy you wanted and it took owning it for a bit to get the bug out of your system.

My personal concerns would be wear and tear on the car, and having it available when I actually want to use it.

I don't want it enough to own it but the potential to expand into another money making venture is enticing and the Model S would be an interesting car to do it with. I can plug any other car in that equation though. I also considered newer Caymen S's. As far as being available when I want it, no F's given there. It would be an attempt to come out cash flow positive and if I get the use of the car 50% of the time, awesome. If I get the use of the car 10% of the time that's great too because it means I'm renting it out more.

Just doesn't seem worth the hassle or headache. In theory great idea - not sure if it would fully pan that way. People treat rentals....like rentals.

I'd lose sleep over the 50 door/bumper/paint dings that would occur in the first month.

From what I've read people have pretty good experiences with peer to peer rental services and it makes sense. When I rent a car from Enterprise it's a corporate owned car. They factor the cost of maintenance into it, they don't really look it over that much when they get it back and if I put a few scratches on it they won't notice and if they do notice they won't really care. If it's another person's car though I know that and others know that and you tend to care more about another individual's personal property than one of Alamo's 1000's of Camrys.

ou've been doing business for a long time, so I assume you have the ability to take credit cards, but have you looked into what technical and legal hurdles there are for securing a large amount of money on a renter's credit card if they bring it back with significant or expensive damage? I too, feel like full coverage on a car like that being rented will far surpass $120/mo. That sounds more like what I'd expect to pay for personal use.

You're renting through services who insure the car. So in this case relay rides offers a million dollar policy on the rental. I'm only required to have standard coverage on the car. They handle all the financials.

Also something to consider. This is a high end vehicle. Customers are not going to want to rent a vehicle with 60 or 70k miles or above and pay you top dollar for it. Enterprise rent a car changes out their fleet usually in the mid 30s range.

It wouldn't be a 60 - 70 mile car and I think people care less than you think. Maybe when you're renting Camry or a Sonata you care but I think by and large people just want to rent a clean car in good operating condition. I rent a lot of cars and never look at mileage as a plus or minus on a rental car. And really think about it, if you're going to rent an R8 tomorrow do you care if it has 10,000 miles or 50,000 miles on it? I wouldn't. In my research I've never seen mileage as a consideration and if you look on Relayrides there's cars of all different mileages up there. The determination for whether your car rents or not? Price.

And keep in mind, I'm not married to the Tesla. In fact, the more I think of it the more I think the Caymen might be a better fit. It's cheaper, dead reliable, smaller, doesn't have the electric vehicle problems that come with renting an electric vehicle to someone that doesn't have the means to charge it, etc. The idea isn't reliant on the Tesla though. I would want something desirable though.

 

[Yaj Yak]

i saw you answered my statement there.

if i were you [MENTION=396]Mike K[/MENTION], and trust me, we of course know i wish i was, i'd do this in a heartbeat.

do it.

and cuz im excited about your renter stories to come.

 

[EmersonHart13]

Good point, do it because good reading material for me. Disregard my earlier statement.

 

[Gone_2022]

Quote:
Also 60k done over 60 months with Zero interest is 1000 a month. More like 1200-1400 after interest

Absolutely no idea what this statement means.



I was referencing your first post. You said a 60,000 dollar car with little interest would be 900 a month. I was using simple math to show you it actually would be more.

60,000 dollar car plus taxes and title fees would be around 65,000. I assumed 8% sales tax So lets just assume you put 5k down for easy math purposes.

So 60,000 dollar loan. X 60 months is 1000 dollars a month at zero interst which of course you wont get on a used vehicle. Most likely 1.9 at best.

So I was saying with your loan and interest a more realistic 60k loan monthly payment was around 1100 a month or more depending on interest

 

[Gone_2022]

Also I am sure you are aware but check out teslas Pre owned site
Pre-Owned Model*S | Tesla Motors

Sometimes they actually have really good deals. Cars with a good amount of options are dipping into the mid 60s here at the chicago location.


Much better prices than some of the autotrader ads I have seen from dealers. Normal Car dealers are screwing themselves on these cars. There is a used 2013 Tesla 60kw for sale here in chicago with little options for 67 grand and 32k miles. Its been for sale for a year now They will never ever sell the car for that especially with the 70D that just came out. I would offer them no more than 54k for that car.

 

[EmersonHart13]

Where does Tesla store the used cars? They don't exactly have lots like a typical dealer.

 

[Gone_2022]

Where does Tesla store the used cars? They don't exactly have lots like a typical dealer.

They have lots at some of their service facilities. I believe the Highland park location stores the cars. A few youtube tesla people I follow have drove through it and its just rows of traded in Teslas.

From there you go to a store and they can bring the car there for you to see. Or they can ship it cross country for you

 

[EmersonHart13]

So sorta like CarMax then, makes sense.

 

[Yaj Yak]

200 dollars a day for a tesla model s? Try more like mid 400s. Also 60k done over 60 months with Zero interest is 1000 a month. More like 1200-1400 after interest

yeah this doesn't entirely make sense.

1049.40 at 1.9% across 60 months.

1075.45 at 2.9% across 60 months...

to pay 1200-1400, you'd have a loan of between 7.5-14.5% interest....

 

[Gone_2022]

Yea sorry I was a little off. Getting insurance on these things is all over the board as well. Freakin Geico wants nearly 180 per month for just the Tesla Alone for me. Not including the trans am or the cruze if we sold the elantra for it. Meanwhile Esurance only wants 150 per month for all 3 vehicles.

Seems to be the norm on the Tesla forum as well. Many people stating insurance quotes are all over the damn place.

So I guess with insurance and interest $1250 would be a safe estimate?