Man Buys Tesla, Rents It Out to Cover Monthly Payments

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Hey there, what's up? Welcome back. This is a brand new week on Side Hustle School. I am your host, Chris Guillebeau, episode 513 with you here, and I could not be more excited to bring it to you than I am right now. Got some great stuff coming up this week.

I'm so glad you're joining me for it. Now, let's begin with the principle, like right off the top of the bat for the week here. The principle is there's usually more than one way to get what you want. All right, once more, there's usually more than one way to get what you want. I think this is true in all kinds of areas of life, but of course, today we're gonna illustrate that lesson through a story.

Now, this is a great story. I really enjoyed this. When I first heard about this, I was like, "Why do more people not do this?" Okay, so perhaps it's gonna give somebody an idea out there. Also, today's story represents the kind of creative thinking that I like to highlight on the show, which is a major reason why I started this whole thing 513 days ago, approximately. It's not just about making money.

I mean, it is about making money, right? Like every day we're talking about making money, but that's not all. Like if you can learn to think creatively and ask what's another way to do this? How can I accomplish my goal some other way? Like whatever your goal is, you can accomplish so much in life by asking yourself that question and pursuing different answers, going down different paths.

Like this is a new reality you can construct for yourself. So get excited. What do you want? What's the traditional way of getting it? And what's another way of getting it?

But now for today's story, have you ever wanted to drive a Tesla, like a Tesla automobile, but don't have a spare $130,000 to buy one? Well, that was the situation one Ontario couple found themselves in about a year and a half ago. And they decided to go ahead and get the car anyway, then rent it out on the pure sharing service, Truro to help cover their payments. Okay, so that's the short version. They buy a car and then rent it out to cover their payments.

But I'll tell you a bit more about how they did it and all the details, all that fun stuff in just a moment. So let's say thanks to today's sponsor. They bring the show to you, allow it to be completely free. And then yeah, on with the story. [Music]

When Tesla announced the Model 3 sedan in 2016, Mike Greiner and his wife, Rachel, eagerly made a reservation.

Living in Canada near Toronto, both of them were extremely excited and couldn't wait to get their hands on that car. However, they realized that with another child on the way, they would need a larger family-sized vehicle. While they could afford the price of the Model 3, about $35,000, the larger Tesla X would cost almost five times that amount at $165,000. Since that was way outside their price range, it seemed that their dream of owning a Tesla vehicle would have to be stashed away in the metaphysical garage. But all of that changed when Mike took a business trip to California.

While he was there, he needed a vehicle and he chanced upon a car rental platform known as Truro. Now, Truro, if you're not familiar, is essentially peer-to-peer car rental. So it's kind of like the Airbnb for cars. That weekend in California, not only did Mike get to experience the thrill of driving a Tesla for the first time, he also noticed that the experience of renting Truro was remarkably convenient, with prices much lower than those offered by the traditional car rental agencies. That's when he wondered if this could be a creative way to finance the purchase of a Tesla X.

Having always been entrepreneurial herself, Rachel didn't take much convincing. She was quick to come on board with the idea. When Mike was back in Canada, they placed an order and received their car two months later. Before the end of 2016, they had successfully listed their Tesla on Truro. During the first few weeks, the grinders weren't able to get any rentals and they wondered if they'd made a big mistake.

However, things quickly picked up as spring rolled around. The first request they received was from a renter in Niagara Falls, which was about 80 kilometers away from where they lived. Although they had said in the listing that the maximum distance they'd be willing to travel to deliver the vehicle was only 40 kilometers, they decided they'd make an exception for their first renter. Over the next few months, demand increased as the warmer weather made driving more appealing. Since the Tesla X was such a premium vehicle, they could receive up to $200 every day that someone rented it.

That's in Canadian dollars, which is approximately $25 U.S. Just kidding, that joke was only for our Canadian listeners. The real conversion is $156 U.S. So with that strong demand, they were able to rent it out for 15 to 20 days a month, which significantly helped with the monthly payment for the car. This made up for the colder days of the year where there were a lot fewer renters who were interested in driving it.

All right, before we go on, let's talk about some complications and challenges. I wanna make sure you always have all the information. You know what's good about something as well as what might be difficult. So for this project, it's seemingly pretty simple, but they still ran into some obstacles. First thing to notice was that the signup process for Truro was straightforward, but they noticed in the fine print that the insurance provided was capped at $75,000.

That could potentially be a huge problem since the Tesla cost much more than that. Thankfully, this issue was resolved when Mike contacted Truro, which gave assurances in writing that they would make exceptions for their Tesla and cover its full value. The other difficulty Mike and Rachel have had is with the actual leasing of the car. 50% of their rentals are pickups, which means that the renter would just drop by their place in Burlington, Ontario, about 40 kilometers from downtown Toronto, and pick up the car. That's awesome.

However, the other half the time, Rachel and Mike would have to travel to deliver the car to the renter. This meant that each of them would have to drive to the agreed upon location with one person driving the Tesla and the other the family car to make the delivery and still have a way to get back home. In the event that one of them was unavailable, they would be forced to either take a taxi or take public transit. In that case, taxis were expensive. They would cut significantly into their profits while public transit would take an awfully long time.

So just a quick little side note, if you were doing this and you lived in a major city or a major metropolitan area where there was demand for these cars or for whatever vehicle you chose, then that might not be as much of a problem, but of course, still a good thing to be aware of. When they decided to buy the car, they asked themselves what the worst case scenario would be. And they realized that the worst case scenario was that it just wouldn't work that well. And perhaps they didn't even have to sell the car and take a loss on it. Not the desired scenario for sure, but also not the end of the world.

And thankfully, it didn't come to that. Mike and Rachel are now on track to accomplish a goal of paying off the car years earlier than they'd planned. Also, before we wrap it up, let's just do a quick little back of napkin math calculation. So this tricked out Tesla X cost $165,000. You're probably thinking, "Man, this idea is way out of reach for me." Well, that's what Rachel and Mike thought too, but then they figured out a way to lower the cost and mitigate their risk.

So they made a $10,000 down payment and then opted for the longest allowable financing terms, which put their monthly payments at around $1,800. At the time they purchased, there was a $3,000 incentive from the government for purchasing an electric vehicle. So that helped a bit, but it's really the side hustle that made this whole thing possible. The Truro rentals are generating at least $1,250 a month, which then covers at least 2/3 of their monthly payment. They've made purchasing a dream car possible for a middle-class family who thought it was completely out of reach.

So let's go back to where we started. What about you? How can you get what you really want? Are you building a new future for yourself? Every day I'm bringing you a new idea, project, or story, and my hope is that it will give you an idea, or it might support a project you're already working on, or it might just get you thinking, which is good too.

But in conclusion, if you're not sure whether your idea will work, you just might need to take it on a test drive. [Music]

All right, before I sign off for the day, I've got a couple of tips from Mike about Truro specifically. Mike says if you want to succeed on Truro or any similar platforms, there are a couple of other companies doing this, you have to figure out a way to stand out a bit. And for them, in their case, their unique selling proposition was like, we've got a Tesla X. Like you drive this car on the street, everyone notices it.

And it also helps that there are people who are drawn to the appeal of an electric car. Now, as I worked on this story, I was reminded of another Truro success story, a pretty crazy one from the side hustle book. If you've got that book, day five had to forecast your profit on the back of a napkin, told the story of Taseer Assan in Los Angeles. And he figured out the system and turned it into a very active side hustle, actually going out to lease a fleet of 13 cars. That's right, leasing 13 cars, that he then rented out to people all across the LA area.

So just to make the obvious comment, you don't actually have to go out and lease 13 cars. The point is to start with what you already have and start where you are, which is exactly what Taseer did. He had begun leasing his own car and it was going well. He thought maybe I'll just, you know, do some more. And instead of just getting one or two more, he decided to go all out and get 13.

But point is, there's usually more than one way to get what you want. So we'll talk about that some more as we go on with the rest of the show. But for now, I'm going to sign off and say thank you so much for joining me for this episode. Inspiration is good, but inspiration with action is so much better. If you want to see the show notes for today's episode, including links and resources for everything I mentioned, just come to sidehustleschool.com/513.

That is 513. More great stuff is coming up. Stay tuned. My name is Chris Guillebeau for Side Hustle School.