Car Rentals

Comparing peer-to-peer and commercial car rentals

car rentalsI rarely rent cars, but recently had a need for a rental so I did a lot of research comparing options to find the cheapest one. Part of this investigation included a deep dive into the cost of peer-to-peer rentals, including extra drivers, insurance, and delivery fees. These companies facilitate people listing their idle vehicles for rent, allowing the owners to earn some extra cash, and adding another competitor with commercial auto rental companies like Hertz, Budget and Enterprise.

In this case peer-to-peer rentals lost out on price. Although I will check prices on sharing economy auto rental sites in the future, based on this experience I don’t expect these to be significantly cheaper than commercial rental companies, but there are a few specific cases where peer-to-peer rentals are likely to win.

My auto rental requirements: I have a long weekend trip to Las Vegas coming up, and the home exchange is a little distance from the strip so I need to rent a car to get around the city. There will be four of us sharing the car. One of the people on the trip suggested we use Turo, a peer to peer car rental service. Initially it looked like a really good deal. There are cars for $30/day, or even less if you book a few months in advance. And in August the going rate at the commercial rental car companies for the cheapest cars is over $40/day before all the taxes and fees. On Turo the fee for a 4 day rental on a $30/day car is only $12. That adds up to a rate for four days of just $132. These cars come with a fixed number of base miles per day, but for a car we just want to use around town that’s no problem.turo

However, it’s not quite as cheap as it looks on Turo. First, most owners charge a fee to meet you at the airport for car drop off and pick up. On many of the cars I looked at, this fee was $80, though I did find a few cars that had no fee. If you don’t want to pay that fee you can meet the owner at the location of their choosing, but you won’t know where that is in advance so you have to assume there’s some not insignificant cost to getting yourself to your car.

In addition, peer to peer rentals don’t include insurance. If you have your own car you don’t need to worry about liability insurance. But damage to the car is not covered by your insurance, and with peer-to-peer rentals it also would not be covered by any of the credit cards that offer auto rental insurance. Turo will sell you insurance, but you can’t purchase collision and damage insurance separate from liability. Turo offers only two options (if you don’t decline coverage):

  • Premium package: covers everything with a $500 deductible
  • Basic package: covers everything with a $3000 deductible

For the rental I was considering, the premium insurance package was $85. Even without a pickup/drop off fee, this brought the cost of the Turo rental up to or greater than rates I was finding from the big commercial car rental companies at the airport.

On the positive side, Turo allows anyone who is a registered member to drive the cars. So we could have all four people as drivers with no extra expense. And we didn’t even need all of us to show up for the car pickup to register as drivers, a requirement of the commercial car rental companies that is often very inconvenient.

In the end we found a car to rent that was $60 cheaper than we could get through Turo (we were fortunate to have a corporate rate that got us additional drivers for free). And we will be able to use credit card collision/damage insurance. In my one experience, in a serious accident with a rental car I was driving where the car was totaled, it was very easy to get the credit card insurance to pay for the entire cost. So I feel good about declining coverage with commercial rental agencies.

There are a few cases where I think Turo will win for better price over commercial auto rental companies. The ability to add extra drivers for free with Turo could make them significantly cheaper than commercial rentals if you’re traveling with other people. And if you don’t have a car with liability insurance, or a credit card that covers collision/damage insurance, I think the Turo total insurance package is going to be cheaper than the commercial rental rate.

If you want to use Turo, you can get $25 off your first rental if you use my referral link:  (I also get $25 off my next rental)

1 Comment

  • Only a total dunce could not see the negative possibilities here. What if the car was abused, wrecked or stolen? Would your loss be covered by insurance, would you even be able be able to get rental insurance? What recourse would you have if the car was left someplace and you did not get paid? Do you get a deposit or payment in advance? How much documentation would need to verify the renters identity? This is just the short list. The scammers are ready and willing to take advantage of the slow thinkers among us! This concept makes their work pitifully easy.