Update: RelayRides has rebranded as Turo and the site only lists a handful of vehicles in Bozeman

What may seem like a good deal on a car rental could spell financial disaster, and huge inconvenience, for renter.

Last night a group of MBA students from Illinois tried to outsmart the system and get a car rental at the Bozeman airport from Relay Rides, and rent their camping gear through Phasmid.  Relay Rides is a national web portal that promotes ‘Car Sharing’, similar to Air BNB, but for cars. The group of students were on a budget and thought by renting Timothy’s 2008 Audi A4 they could get a better rental car for less money than using an actual car rental agency.

I appreciate the spirit of RelayRides to change to car rental business. Shoot, I have been doing that for years. However, this concept fails tremendously in a couple of key components- that could spell high financial risk to both the owner of vehicles, and much more to the renter. I never thought I would promote the car rental system, but it certainly exists for a number of reasons.

The Problems with RelayRides:

SAFETY AND RELIABILITY:

The car rented by the students (displayed below) is a 2008 Audi A4, with an APR Stage 1 kit, a non-factory replacement computer chip that boosts performance. What this says to me is the Owner drives this car FAST. Further, a 6-year old car with a performance chip, aftermarket wheels, and extra tinted windows generally means it is owned by someone on a budget. Usually, this ‘type’ of vehicle owner will spend more on making it look cool and go fast versus be safe and reliable. As a car rental company, there are numerous reasons to keep EVERYTHING maintained to exact factory specifications, but the primary reason is safety and reliability. You mess with factory settings, you compromise everything. Plain and simple. And there are not a lot of service stations, or cell phone reception, in Montana if something goes wrong. RelayRides does not seem to required any standard safety/ reliability checks for offered vehicles.

“ABOUT THE CAR
Fun turbocharged Audi with APR stage 1 kit! Leather interior, heated seats, sunroof, all wheel drive, seats 5 comfortably with tons of cargo space! Great gas mileage (easily 32 or better on the highway, high 20’a around town), tons of power to climb hills!”

INSURANCE

The students were (very falsely) under the impression that their Platinum American Express would cover them in case of accident. Here is a direct quote:

FROM THE RELAY RIDES WEBSITE: “Many people incorrectly believe that they have full coverage through a personal insurance policy or credit card offering that will cover this exposure. Please carefully check the terms and conditions of those policies and consult with your credit card company before assuming that you are covered and selecting the “Decline Coverage” option — it is highly unlikely that you would be covered by any credit card insurance when you rent cars through theRelayRides marketplace.”

“While we cannot provide advice on the specific terms of any coverage that may or may not be available through your credit card, it is highly doubtful that your credit card company provides coverage for damage to a car rented through the RelayRides marketplace, and it is even less likely that it provides liability coverage for injuries or damage you may cause to other people or their property.

 

Many credit card companies may not consider RelayRides a “rental car company”, and so may provide no coverage for a rental through the RelayRides marketplace.”

They were also under the impression that RelayRides insurance would cover them in case of an accident. However, they personally did not have an auto insurance policy (exchange students, not that it matters as listed in above statement), and as stated below (also a direct quote):

“The Premium and Basic packages are “supplemental” or “secondary” to any existing coverage the renter may have available through other sources (whether through a credit card, personal automobile, or other policy). In practice, this means that the renter is primarily liable, but can satisfy their obligations through these other sources, such that RelayRides will first collect the relevant deductible directly from the renter, and then will seek reimbursement (“subrogation” in insurance terms) from the renter’s other sources for the total amount of liability.” ALSO FROM RELAY RIDES WEBSITE. 

 

What this means in plain speak is that the students would likely have ZERO insurance coverage (except for liability state minimums as carried by policy holder- although this seems questionable as well) and be financially responsible for all damage to the vehicle up to the actual cash value. American Express would do nothing, RelayRides would do nothing, and all of a sudden they may owe Timothy the price of a used 2008 Audi. Having read all of RelayRides insurance policy jargon, I could not find a way that the students would have any insurance coverage if they hit a deer, which is generally about $3,000 worth of damage. I couldn’t even imagine the consequences financially if they hit a kid.

CLEANLINESS/ QUALITY

The inside of the car was filthy. It still had on winter tires that looked like they had far less than 40% life left in them. Certainly not sure if everything worked. Rental car companies have presentation of vehicle down, this was incomparable.

SOCIAL RESPONSIBILITY

Nobody likes paying tax, however, here in Montana we do not have a sales tax so the money for infrastructure has to come from somewhere. In Montana we are required to charge a 4% Rental Vehicle Tax (RVT) that goes into the general fund. Without having taxes like the Rental Vehicle Tax or Lodging Facilities Tax (7%), taxes that target tourists versus locals, the state will need to raise taxes somewhere else. This is important to people that live here, and to visitors that use our roads (they cost money, too). Further, by picking up guests at the Bozeman Airport, RelayRides is operating illegally on airport property.

PRICE

The price to rent Timothy’s 2008 Audi is $50/ day. The price (at the same time of rental period) at Phasmid Rentals to rent a 100% safe, new, Subaru Outback: $65/ day. The price to rent an Economy Car at the airport $30/ day. The price to rent a Standard SUV, $75/ day. All are new, safe, reliable, and clean.

CONCLUSION

RelayRides in Bozeman is a huge risk. Yes, Phasmid wants your business, but even if you choose not to do business with Phasmid- please protect yourself and rent a safe and reliable car from a reputable source! It is not worth getting stranded somewhere in Montana, where you are guaranteed not to have cell phone reception. It is definitely not worth renting a car where there are no safety standards. And it is certainly not worth renting a car that can have ANY questionable insurance coverage.

If you are coming to Bozeman and considering RelayRides versus a traditional rental car experience, please BE CAREFUL!!! Educate yourself on the intricacies of car rental insurance, because rest assured, if there is any way an insurance company can get out of paying, they will.

By the way, we ended up giving the students one of our rental cars at a discount so they could safely and comfortably explore Montana with third party insurance reducing their total possible exposure to $250.