Turo Hawaii grew so fast that not long ago, it shook the entire Hawaii car rental market. But the tide is shifting quickly as Turo owners and renters face many new issues. You may say it was inevitable. After all, buying and financing fleets of cars to create home-grown car rental businesses was always very risky and based on certain premises.
1) Turo owners trusted that car rental agency prices would stay so high that a Turo car owner would handily make money on rentals.
While that was true for many months, the cost of car rentals and Turo rentals has dropped precipitously. Not long ago, we paid between $120 then $200 per day for Turo rentals we needed during car repairs. We checked today for Turo prices, and using Maui Airport as an example, with dates of September 14-21, we found a plethora of Turo cars starting at $42 per day. There were 20 choices under $50 a day and dozens more for under $60. The sheer volume of cars available leaves us wondering whether Turo owners can rent their vehicles to the degree they had planned.
But more importantly, we found a new Hertz Ford Focus (compact) for $47 per day, including all taxes and fees on Kayak.
2) Turo owners believed supply vs. demand would keep cars on the road nearly all the time.
That was true for most of last year when it was hard to find a Hawaii Turo car or any Hawaii car rental on many dates. Heck, we were just grateful to find any car at all. But now, this has pivoted close to 180 degrees and there is absolutely no shortage of car rentals, except perhaps on traditionally sold-out dates, such as the end of year holidays.
3) Turo owners expected to make enough money to both be profitable in their business and to pay off the vehicle creditors.
Turo Hawaii cottage industry.
What we’re talking about is something entirely different than someone who has one car, or maybe even two cars that they rent out when they aren’t using them. This became a significant albeit risky cottage industry spawned here in Hawaii and elsewhere.
Turo renters should exercise caution.
One of the biggest problems a renter may face is that the car owner can cancel a Turo rental at any point in time before picking up the car. If that were to happen to you, you might find yourself without a rental and in need of finding a car rental at the last minute.
Turo repossessions: two issues arise.
Problem 1: Upside down on car loans.
When the market was riding high, there was no problem. Now, however, it is a different story as Hawaii Turo owners’ monthly income falls, and rental rates drop by more than 50% and continue to decline.
It was easy to buy cars during Covid, and there was also stimulus, forbearance, unemployment, and other benefits that helped create the money used in part for the acquisition of Turo cars, even as car prices were escalating rapidly. But that has all ended. Some Turo drivers will be forced to either sell cars or will risk them being repossessed. Last month, Ford Motor Company’s CFO said that they see delinquencies on auto loans increase. Others are even more pessimistic.
Edmunds data showed that a whopping 13% of new car buyers are now facing payments of $1,000+ monthly.
Problem 2: Lenders may repossess vehicles when financing terms don’t permit commercial use (Turo).
The second issue is that Turo car owners who have financed their vehicles personally may breach agreements that do not permit commercial use. It seems that when financing or leasing a car, it is a violation of the terms of many contracts to rent the vehicle as a business. On Facebook, we found multiple reports of Turo cars being repossessed by lenders for specifically that reason.
Cars that are owned in full by the owners, or are financed commercially, are the safer rental bet. But, how is a Turo renter to determine whether the car owner wholly owns their vehicle or has financed it as a business?
Turo and Hawaii remain in conflict.
You may recall that a few months ago, Turo owners received citations when attempting to use Hawaii airport facilities to drop off cars for their renters. And they face being towed when parking Turo cars in airport lots. This may eventually get worked out, but it hasn’t thus far.
What recourse does a Turo renter have should issues arise.
If a Turo owner reneges on their agreement, the host will be subject to a $50 fee if they cancel a trip less than 24 hours before the start of the journey.
But what about the renter? Turo will reimburse the amount paid by the renter. But will they get another car? There is no such provision that we can find.
Are you still using Turo Hawaii rentals, or has that changed?
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Here on Kauai I hear people are waiting up to 3 hours standing in line to rent a car. My friend has a Turo business and is doing great. September was supposed to be a slow month for him and he’s getting last minute bookings every other day. The car rental companies are finally being washed up with their high prices and overcharging for a car.
When Uber came out years back it put the Taxis in check for overcharging and high cost. Same now with Turo. Let’s them eat cake 🍰
The renters cancelling is a bigger risk. We want the rentals. Seems like this article is biased towards the rental car companies
Is there anyone out there that rented thru Turo, who got into an accident, that their insurance did not cover?
Yes it was in Home Depot parking lot while I was shopping. Minor damage I gave Turo owner cash to cover the repair, claim would have been close to my deductable so didn’t claim.
If you pay for a Turo rental with a Chase Sapphire Reserve does their primary rental insurance cover you?
Car rental agencies have been known to cancel on folks or not have vehicles when the customer arrives even when pre-paid.
Thankfully, I haven’t had issues with car rentals or Turo. Hoping folks can still get a piece of the car pie.
I have regularly used Turo on Oahu for over 3 years. I have never needed to pay more than $40 per day and prior to COVID it was less than $20.
Aloha! I am a Turo host as well as a parking business owner on Kauai. Thank you for your insight. Many of what you said is factual, for some of the islands. For Kauai, we just had a meeing with Turo execs. (youtu.be/gliFMNDyfuw ) They’re initiating some “improvements” to the parking issue. Right now, the Turo rental parking issue is the biggest situation we face here. In a close second, would be potentially pricing. It would be unfair to bundle all the Hawaiian islands into one Hawaii Turo basket. Being born and raised here, you know that each island has their own unique qualities. This is also true in business. What works on Oahu, may not necessarily work on Maui or Hawaii Island.
Turo has a tool they call the Carculator (car calculator) which estimates the ROI (return on investment) for a given car in a given market. Thye look at the finance cost per year and the revenue (in a given market) and tell you, the potential Turo operator, what kind of ROI to expect. The estimate is based on 7 rental days/month. Not the 15+ days this article implies.
Yes, there are risks for both the renter and the Turo car owner, but this still looks like another hit job by Beat of Hawaii against Turo.
Another hazard of using Turo is that your auto insurance will not cover you in the event you have an accident or the car is somehow damaged. Found that out the hard way when we used Turo on Kaua’i. You must buy the insurance offered through Turo which adds another $30-$40/day to your rate. Insurance companies won’t cover personal autos used in a retail capacity. We have GEICO, so very reputable. Please check with your company before you engage Turo. Best bet: stick with established rental companies.
yes 1st whats a Turo?
Won’t be renting from Turo as our neighbor has 5 vehicles he rents out. They are frequently parked on our street leaving no where for the other neighbors to park. I’ve already called and written letters to city and county government about it. Locals already can’t find homes to rent due to AirBnB, soon we won’t have our own streets to park on. Limit number of cars they can lease at a minimum!
Put a vehicle on Turo and earn some extra cash
Turo hosts should know better than to take up parking that others need just so that they can park there cars when but rented, it definitely could be an issue. In what area do you live that someone would do that? I know it’s been a problem I’ve seen it on the news. Some people are just trying to make it, I know turo host are making a bunch if $ in fact I know some who barely make their payments . Did you try talking to the person before trying to get them towed or something?
Just reading the comments on this subject seems most posters have had a positive experience with Turo rentals. It’s probably no different than individuals who have a positive experience with Uber they no how to use it and it works for them.
If you’re concerned about a Turo rental than double book a rental car using Costco Travel. There’s no up front payment with Costco and there isn’t a no show fee.
One more thing I’ve been in the car business for 50 years I’ve never seen a bank repo a private party vehicle do to it being used for commercial use.
Hi Richard.
Do a search for Turo repossessions and you’ll start to see what is being reported.
Aloha.
So I did the research saw the video from Ally Bank, by the way Ally bank used to be GMAC financing, but have not seen or read many posts about this happening in any volume. Most of what I read had to do with lack of payment not commercial use of the vehicle.
In California during the pandemic there’s been a moratorium on repossession of vehicles which has recently been lifted. It lasted for 2 plus years, so you’d believe there would be an uptick in vehicle repossessions.
Do to the paper work and large fees associated with repossessing vehicles if your payment is current the likely hood that your car is going to be repossessed for not honoring terms of the contract is slim at best, but we’ll see we are living in the spicy times.
Hi Richard.
Thanks. We’re referring any such future issues too you. Appreciate your nearly 300 comments.
Aloha.
only reason a bank will repo a car, is for nonpayment. If someone doesn’t carry insurance, they’ll notify you then force place insurance which only protects the bank, the car is owned by the bank until its paid off. However if you rent from a rental car agency and don’t buy their insurance, you are not covered under your own policy should the car be wrecked and out of service for any amount of time. My insurance agent said to purchase that type of insurance online for loss of use. who knew!
| Are you still using Turo Hawaii rentals, or has that changed?
More relevant question: Are we still “using” Hawai‘i?
Answer: No.
But locals have made it clear that they’re happier that way, so all is good.
I just recently went on a trip to Oahu from Kauai. I rented a Turo vehicle. He dropped off the vehicle at the airport just outside of baggage claim. Was the best experience I’ve ever had. All the way till the drop off 7 days later.
Meanwhile my stepdad works part time at a car rental agency in Lihue. People are waiting from 1-2.5 hours to get their car. Big companies don’t care about there wait. I also know that when a battery dies or a tire goes flat with a rental company vehicle, good luck getting another car! Maybe 5 hours later. Doesn’t happen with Turo. I suggest just renting a Turo from a A+ rated person with all star reviews. I’ll never rent from a car company again.
FYI: While in-between flights on our way to Maui I found out that my auto insurance would not cover me when renting from Turo. Although Turo is an established app for finding rentals I was actually renting from an unlicensed private source. I was glad my host tipped me off to this and gladly paid for the Turo insurance. Look into it before you decline the Turo insurance option.
You didn’t even touch on one of the most important points!! The fact is that these Turo owners crowd our suburban streets with their rental cars and we don’t have the street space for our own guests!! They are essentially using the city streets that we pay for with our taxes as their business space!! Why isn’t the government tackeling this? The car rental companies are paying a lot to lease the lots where their cars are stored. This is not fair.
I can only atest to my dealings with Turo and those that I dealt with. In February 2022 we rented through a Turo participant. The vehicle was 3 years old and in Great Condition. It was Everything that we were expecting and found the Owner very easy to work with. We rented the vehicle for 18 days without any problems and paid $32.00 per day, 3500 miles for free. With an Island the size of Oahu that was more miles than we would use and we do plenty of driving exploring. Pickup and Drop Off were easy and prearranged for our convenience and flight arrival and departure. BOH, Your Warnings and Cautions are appreciated, possibly our good fortune was due to dealing directly with the Owner of the vehicle and not vehicles that are financed. Be wary!
Hi Ernie.
Thanks for sharing your Turo experience on Oahu. We too haven’t encountered any issues when we rented last year. Things are changing quickly, as we honestly thought would be the case at some point.
Aloha.
Beat of Hawaii, I thought this article was well researched and written in a time where it’s difficult to get good, insightful local news. mahalo nui
Hi Kea.
Thank you. We’re glad that it was useful.
Aloha.
I just completed an 8-day car rental from Enterprise on Oahu. I was going to rent from Turo and found a suitable car at about $60 per day without insurance. By the time I added the insurance costs and an additional $75 cost for pickup and delivery to my family home I was better off using Enterprise and got a newer and bigger car.
My personal auto insurance policy would Not cover a car rental through Turo nor did my credit card car rental coverage.
We just got back from Honolulu and rented a range rover and had no problems whatsoever and it was a lot less expensive than a compact car at a car rental company and no standing in line or problems dropping it off or picking it up I would rent again
Yes, rental car company lines are ridiculous. My stepdad e we irks part time at one in Lihue, Kauai and people are waiting 1-2.5 hours.
I just rented a Tesla Y on Turo for two weeks in Honolulu Hawaii and it was an amazing experience. Easy to book and the owner was friendly and helpful. Reasonable as well. My second time using Turo and won’t be my last.
After being charged and paying $300 to Hertz for a rental car for 22 hours, I will Never rent a car from a rental car company again.
We recently rented through Turo on Kauai because there were no regular rentals available. $100 per day including delivery and resort pick-up. No problems, good choice.
Excellent reporting guys. I have a car on Kauai and am looking for a car on Maui and your article just made me feel a lot better about finding one.
Hi Greg.
Thanks. Good luck with that. It is getting better albeit slowly.
Aloha.
As with anything in life – If it’s too good to be true, it probably isn’t true!
Aloha,
Thank you for all of your posts, I always enjoy reading them.
I feel this time you have only covered part of the story.
While everything you are describing is true, it’s only true for some Turo hosts. The majority of cars available on Turo in Hawaii are offered by hosts that manage fleets of cars, have legitimate business insurance and business financing in place.
Every time a Turo host cancels a reservation, that information will be added to the host’s reviews. Renters just need to do their due diligence by checking the reviews.
Renting from a Turo host with stellar reviews is still much more reliable and convenient than renting from a rental agency. If a rental agency runs out of cars, a reservation is worthless.
Hi Tim.
Thanks. We appreciate your input re Turo.
Aloha.
I experienced the exact same problem with Turo earlier this year. I booked a very nice VW Tiguan for about $55 a day before car rental prices skyrocketed. A few weeks before my trip the owner canceled the contract without explanation. I later saw the same car on Turo with an asking price double what I would have paid. Feeling alienated I booked with a corporate rental car company.
Aloha friends – one thing to be cautious of with Turo is if you have a problem while renting (mechanical or worse – like an accident) your Turo owner isn’t likely to have another vehicle they can quickly swap you into and get you back on the road.
I’m heading out on a NoCal road trip from SoCal & really thought long and hard about that. If I’m 600 miles from my pick up location I’m pretty much out of luck if something happens.
Then the call to my insurance company sealed the deal, even with my full coverage they will not cover a Turo rental.
I know many have a good experience…I just want the “comfort” of the name behind the rental.