Last month I got a job that snatched me out of Los Angeles. Of course that meant I’d have to say by to friends and family, but also left the burning question – what will I do with my car? My car, 2014 Tesla Model S I affectionatly call “Tess,” is the first car I’d purchased since my trusty Mr. Saab in high school, a used 2005 Saab 93, so of course I’m emotionally attached.
As a Los Angelino, the car is an extension of my personhood, so I initially thought it’d come with me up to San Francisco. But faced with a $300 monthly parking spot and a 5x/week commute to downtown that wouldn’t involve a car, the underwriting for car ownership became untenable.
So, do I sell the car? Its lost 30% of its value since the COVID peak (due to the crazy car market, the car appreciated after my first year of ownership and has since normalized aka depreciated like cars do). Not yet. Since the car is 10 years old, is grandfathered in for free supercharging for life, has a sunroof (a luxury absent on current Tesla models), and holds some meaning to me (likely due to the endowment effect), I am planning to hold onto it. Faced with the options of relocating, storing, selling, or renting my Tesla on Turo, I’ve opted to have a fleet manager co-host my listing on Turo. This (hopefully) generates some income while I retain ownership and optionality – I can decide to sell it in a few months (I plan on seeing out the Tesla experiment and living carless in SF for at least 6 months) if the carying cost is too high (~30 months left on the autoloan).
turo: earning with ease
For the uninitiatied, Turo started back in 2009 as a peer-to-peer car-sharing platform, where regular folks could rent out their personal vehicles to make some extra cash aka Airbnb for cars.
At first, Turo was all about helping people make a bit of money by renting out their own cars when they weren’t using them. But recently, it’s evolved. Professional fleet managers have joined the platform, and these folks run multiple cars as mini-businesses. They manage multiple listings, handle maintenance, and ensure that rentals go smoothly—essentailly car rental companies without the large overhead.
Turo addresses the issue Elon Musk highlighted during his Tesla robotaxi reveal—that most people only use their cars 10% of the time. By renting out these underutilized assets, which are often one of the biggest expenses after housing, owners can generate extra income.
Turo is shifting toward more automated pricing and professional fleet ownership, offering customers more consistent, reliable experiences. Renting from full-time professionals ensures a smoother process, compared to casual car owners. This model also benefits owners by reducing the hassle of regular maintenance, like car washes and early drop-offs, making it less disruptive to daily life.
So, I decided to find a fleet manager to manage my car. This approach allows me to generate income flexibly, without committing to long-term arrangements where I wouldn’t have access to the car. I don’t have to worry much mileage or depreciation, since the car has over 70,000 miles. I see it as an experiment, especially after hearing a friend’s experience with Turo, where he covered his lease but didn’t find the associated management work and early morning wakeups for delivery worthwhile.
Tess needs a bit of TLC before he’s listed, so it won’t be up for another week, but I’m hopeful it will at least cover the lease and insurance. Plus, it’s a fun, low-effort project. While I have a couple investment properties that require more work than expected, at the very least, this will be a learning experience as I’ve wanted to list on Turo for some time now as I’ve enjoyed being a customer (especially while renting the Polaris Slingshot one weekend). The downside seems minimal—if it doesn’t work out, I’ll sell the car in a few months.
A home run scenario would be generating consistent, annuity-like income, allowing me to keep the car long-term while it earns money. The main goal is for it to cover the auto loan and insurance, which is about $200 less than my previous plan, thanks to Turo’s coverage while it’s rented, depending on the plan I select. In the worst case, I wouldn’t have to pay out of pocket. Fingers crossed, Tess’ appeal with its black rims, Midnight Silver Metallic paint, and yellow calipers will draw interest.
management logistics
The management fee covers everything, and my manager handles all aspects of the rental, so I don’t think I have to worry about anything. Privacy hasn’t been an issue; Tesla settings are tied to my profile, and they perform a soft reset between renters. My manager creates a Turo guest account for each renter, and interestingly, this fleet manager says 50% of renters are already Tesla owners looking to drive another one while theirs is in the shop or when they are in the area for a business trip.
I signed a management agreement where I remain the host, and he’s the co-host. The fee is $100/month with a 70/30 earnings split. No out-of-pocket costs except for storage, and payouts are handled via ACH direct deposit. Coming soon, Uber renters will be able rent cars through Turo, which will hopefully provide some increased rental interest due to greater market demand.
my underwriting process
I always love an excuse to make a spreadsheet, so here are my underwriting assumptions across three scenarios (blue = hardcoded numers):
Daily Earnings and utilization drive the gross income on Turo. Based on my conversation with the fleet manager, it seems this likely range is $50 to $65, with utilization rates (how often the car is rented) ranging between 70% to 85%. Typically, you’d only adjust one variable at a time since one might ask if it is likely you’d get the car utilized more with a higher price. But, I wanted to explore a broader range of outcomes based more on the macro rental market (in a good market the car will likely get rented out at a higher price).
Turo takes a 15% cut of earnings (this can be up to 40% depending on the insurance plan) and my manager receives a 30% fee on earnings plus a $100 base fee for handling everything from car cleaning, storage, and marketing the car on Turo. These fees won’t change.
For operating expenses I assume $80 for a pared down insurance that covers the car while it’s not being rented, a $20 monthly contingency, and $500 in paint touch ups. The monthly operating expenses are consistent at $144 in each scenario.
Clearly, if I owned the car outrite, the auto yield return (AYR), a fun acryonym I made up similar to a real estate cap rate, makes this a really attractive proposition (although the absolute dollar amounts aren’t very large). However, with my current car payment (for the next 30 months), we see that scenario 2 is roughly the breakeven point. Then, assuming my Turo manager is still going strong, after 30 months this turns into a nice annuity (though you’d likely assume average daily earnings would decrease quite a bit).
Anyways, the car should go live this week, so lets see how these hypotehses and underwriting assumptions play out. Unfortunately, no matter how you toggle the assumptions, I won’t be able to afford the new McLaren W1, which upon its recent release, appeared atop my Hannukah wishlist.
unpublished alpha 