Is Turo a Scam? – Let’s Take a Look…

The sharing economy is disrupting the business world in a big way.

The advent of the internet and big data has enabled people to connect with each other in brand new ways; one of the most important is the sharing of resources. 

Instead of paying for the inefficiencies associated with big business, consumers can deal directly with other consumers and save money.  

Now, hotels are forced to compete with homeowners renting their place out on AirBnb. Banks must keep an eye on interest rates offered by peer-to-peer lenders like Lendingtree. And car rental agencies have to compete with something more than the well-known rideshare services: It’s called Turo

What exactly is Turo?

Simply put, Turo is Airbnb for cars.

If you own a car, you can rent it out for a fee. Instead of renting a car from an agency, a vacationer might simply pay to drive your Prius around town. Someone who wants to impress a client can rent your Mercedes for a night and pay far less than high-end rental fees. 

If you’re looking to rent a car, you can cut out the middleman and rent directly from a car owner. Typically, you’ll pay 35% less than the cost of a traditional car rental agency. 

Should You Be Concerned?

When electric elevators started showing up in public buildings, many people flatly refused to use them. The reason? When a brand new idea comes around, people need to be reassured that it’s safe before they start participating. They want to feel confident.

You may have heard that Turo–a new idea in the sharing economy–is a scam or isn’t safe. This simply isn’t true.

We’re going to take a look at the most common concerns associated with Turo and discover why Turo is completely safe to use.

what if something happens when renting with Turo?

Concern #1: What If Someone Wrecks My Car?

This is an obvious one. It doesn’t matter if it’s a Fiesta or a 911 Turbo; nobody wants their car to get wrecked by a stranger.

The truth is that anytime a car is on the road, it could be involved in an accident. So what happens if someone decides to check their Twitter feed on the road and smashes your baby into a light pole?

You’re covered. Turo offers $1 million in liability insurance through their partner, Liberty Mutual. They also insure against damage to your vehicle in two levels of protection:

Basic. Turo will cover 20% of the first $3,750 in repair costs to your vehicle, and 100% of additional costs up to $125k.
Standard & Premium. In both of these plans, 100% of damage-related costs are covered–up to $125k.

If someone wrecks your car, you can choose to work out the repairs with the guest’s insurance company–just like you would in a typical scenario. Or, you can choose to have Turo conduct an appraisal and handle the repair process.

Either way, your car is protected.

Concern #2: What if Someone Makes a Mess In My Car?

There’s always the chance that your renter could be a slob. What happens if you get your precious car back and find mustard smashed into the seats or sugary spills coated on your cupholders?

Simple. The guest pays for any and all cleanup costs.

Before you toss the keys to the guest, take a few pictures of the interior and exterior of the car. Once the car is returned, take photos of anything that’s out of place.

As long as you submit those pictures within 24 hours, you’ll be reimbursed for cleanup costs.

Reimbursement comes in several levels:

  • Moderate Cleaning: $50. Dirt on the car’s exterior, food or dirt that needs vacuuming, light or sticky stains, ect.
  • Heavy Cleaning: $100. Large stains on hard-to-clean surfaces, like cloth.
  • Severe Cleaning: $150. Anything that requires a steam cleaning or full-blown detail.
  • Pet-Hair: $150. No dogs allowed. No cats, either.
  • Smoking: $50-150. Scent removal, physical debris cleanup (ash, cigarette butts, ect.)
  • Maximum: $250. Anything beyond the previous conditions, or multiple issues combined.

Concern #3: Can This Affect My Car Insurance?

In short, no. Your auto insurance probably has an exception for renting out your car–you can’t count on your insurance agency to cover damages done while the vehicle is rented out.

The good news is that Turo’s insurance policies make your own policy irrelevant during rentals.

Any damage inflicted by the renter is covered by Turo’s liability insurance, and your own vehicle’s condition is guaranteed by Turo’s reimbursement of necessary damage repairs.

Concern #4: What If the Owner Claims I Damaged the Car?

Let’s say you rent a car through Turo. You’re a reasonable human being who would never try to get away with damaging someone else’s car, and so you return it clean and whole.

But what happens if the owner falsely claims that you scraped the bumper on a guard rail or shoved a cheeseburger between the seats?

If you’re accused of anything, Turo steps in and mediates the situation using photo evidence. This is why its key for you to take pictures of the vehicle when you return in; as long as you do this, Turo will never force you to pay for something that you didn’t do.

Concern #5: What If the Owner Bails at the Last Minute?

One of the positive qualities of a car insurance agency is dependability. If you rent a car through a major agency, you don’t have to worry about the car being there for you.

Even if you were overbooked or if the agency made a mistake, chances are there will be something available from the massive fleet of rental cars.

Some people are concerned that services like Turo don’t offer the same peace of mind, but those fears are unfounded. Here are a few steps you can take to make sure your rental is secure.

Choose a host with good reviews. Just like any other peer-to-peer service, Turo has a review system that allows you to choose vetted and reliable hosts. 

Communicate with the host prior to the rental. Some people have the bright idea to list their extra car on Turo, and then they forget about it. Avoid this painful situation by sending messages to the host and ensuring that they’re attentive and aware of the upcoming rental. 

Remember that cancellations cost hosts money. If a host chooses to cancel a reservation less than 24 hours before your trip, they will incur a $50 fee. This discourages hosts from bailing on their guests at the last minute–it’s bad for business.

Conclusion

Most of the accusations against Turo are the result of users not following the policies, getting angry, and labeling the company a “scam” because they didn’t like the results.

For example: if you don’t take any pictures of your car and then claim that someone ruined your upholstery, Turo has no way of knowing whether the car was already in that condition or if the guest inflicted the damage.

As long as you follow the rules, you will not have a bad experience with Turo. It most certainly is not a scam.

Turo represents a great leap forward in the car-rental space: the ability to cut out agencies (and their hefty fees) is just the latest example of the sharing economy opening up new opportunities for consumers.

If you’d like to learn even more, check out my in-depth Turo review.

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