Renting as a Fundraising Method

[dyoungre]

As my family is rapidly growing, I'm finding the need to be more creative about raising funds to go racing. I'm entertaining the thought of renting out my ITA car for drivers' school, maybe for a race or two to qualify a racer. I've never done it before, so thought I'd ask - what sort of experiences, good and bad, and lessons learned have people had? What is the going rate to suggest, if 'rental' includes tire use, fuel use, and crew?

[Knestis]

Speaking from almost 25 years of renting experience...

** Do the real math. You need to recapture a portion of the price of the car, annual service, PLUS all of the obvious expenses. If you don't, you'll be spending your family's money to support someone else's racing. I frankly get a little tired of having renters tell me that they can race their own car for 1/5th of what I have to charge. That simply tells me that they don't know what their racing actually costs.

** You need to assign some value to your time, if you're working on the car yourself, or the cost of whatever work you need to have done. You might discover that working a part-time job or doing some overtime puts you money ahead once you do all the math.

** Get a real deposit. I take a $2000 damage down payment. I've had more than a few drivers want me to "hold the check" or some similar deal. That tells me that they aren't actually liquid enough to pay for repairs when they bend/break something.

** Make sure all parties know the expectations. The short story with our program is, "if it breaks while you're driving it, you pay to fix it." It doesn't matter what or why.

I actually had two renters run into EACH OTHER at a club race at Portland years ago. Both drivers decided that they wanted to argue that it was the others' fault, rather than pay me. I'd taken a credit card imprint as a deposit from one of them. He got to pay for BOTH and I sent them on their way with him figuring out how to get the dough from his now-ex-"team mate."

K

[Andy Bettencourt]

Dave,

Feel free to contact me. I can give you the skinny on what we did and what we do now and why.

AB

[dyoungre]

Thanks for the feedback, gentlemen. I'll contact you, Andy.

I think that the hardest thing for me is enforcing responsibility when an issue isn't the driver's fault (although if they hadn't rented the car, the damage would not have occurred; therefore, it's their fault, right?) and what to do should there be a mechanical fault reducing their on track time.

[Andy Bettencourt]

That is the hard line Dave. As soon as they are in the car, they are responsible. It can't be any other way. If it was their car, the same would apply.

[joeg]

If you are looking to make a bit of $, you have to treat it as a business. The main problem is determining what you have for a "customer". A car breaker/wrecker should be avoided, no matter how much money they have.

You will never recoup much from the venture if you have a destroyed car or drivetrain after each event.

In my case, I don't "rent" my extra cars. I actually "sell" them for token consideration with an option to buy back at any time for $10.00. The purchaser is responsible for buying and installing all consumables (brake pads, tires, etc.) and they stay with the vehicle.

However, I only "sell" to people I know and trust and who are willing to maintain and transport the vehicle and have access to the necessary facilities therefor.

My philosophy is to get as many drivers to events that are responsible and want to run, but have (temporarily) no car for whatever reason.

No young license candidates need apply.

[Greg Amy]

Renting a race car to make money goes right along with Dave Gran's idea of buying side rental property to make money: ain't a part-time job (well, if you're actually interested in the "making money" part, anyway...)

[MMiskoe]

Just out of curiosity, what is the difference between a driver making an on track mistake that damages the car and a volunteer crew member making a mistake that results in a car damaging failure?

Crew member doesn't get the oil filter on right & your rental driver dumps the oil on track trashing the $$$ motor. Now what?

Matt

[Andy Bettencourt]

Just out of curiosity, what is the difference between a driver making an on track mistake that damages the car and a volunteer crew member making a mistake that results in a car damaging failure?

A contract.


Crew member doesn't get the oil filter on right & your rental driver dumps the oil on track trashing the $$$ motor. Now what?

Matt

If you have the ability to track the failure to that level, then your renter is not at fault. You contracts should differentiate between normal racing incidents, driver failures, driver-created car failures and car failures that were due to poor preparation by the owner.

If your driver can't stop and hits the wall because you didn't change out the brake pads, then it's on you.

There is a lot of grey because there are a million situations. Be fair to your renters and demand that they be fair to you...and you will succeed.

[Knestis]

Just out of curiosity, what is the difference between a driver making an on track mistake that damages the car and a volunteer crew member making a mistake that results in a car damaging failure?

Crew member doesn't get the oil filter on right & your rental driver dumps the oil on track trashing the $$$ motor. Now what?

Matt

Driver accepts the responsibility - unless the owner wants to let them out of it. (EDIT - I don't make the narrow distinctions that Andy describes, instead telling drivers to not rent from us if they think something like that is going to happen.)

Now, to be fair: I specifically exempt engine and transmission failures for enduros, where more than one driver has control in one event, unless there's evidence of "proximal cause."


K

[lateapex911]

Another thing to consider is competition.

You'll be "competing" against other rental companies. And they will likely have attempted to have low costs. They rent multiple cars but g et them to teh track in one transporter. They have crew, but the crew services 4 or more cars.

And they have reliable cars that are cheap to maintain.

So they can charge a rate that's profitable to them, and attractive to the renter.

A guy like us though needs to charge enough for our time, (Your family likely wants you home, so there is a "cost" there), and our expenses. My car isn't chosen strictly for it's low cost of maintenance. And we have a righ that takes ONE car to the track.

And, the car needs to be dead reliable, fresh parts, pads, discs, bearings, fuel systems, cooling systems and everything that could possibly go wrong atttneded to. That takes time and money.

Net net, I think it's not impossible for the "Single car renter" to compete, but making serious money is tricky.

[Andy Bettencourt]

Another thing to consider is competition.

You'll be "competing" against other rental companies. And they will likely have attempted to have low costs. They rent multiple cars but g et them to teh track in one transporter. They have crew, but the crew services 4 or more cars.

And they have reliable cars that are cheap to maintain.

So they can charge a rate that's profitable to them, and attractive to the renter.

A guy like us though needs to charge enough for our time, (Your family likely wants you home, so there is a "cost" there), and our expenses. My car isn't chosen strictly for it's low cost of maintenance. And we have a righ that takes ONE car to the track.

And, the car needs to be dead reliable, fresh parts, pads, discs, bearings, fuel systems, cooling systems and everything that could possibly go wrong atttneded to. That takes time and money.

Net net, I think it's not impossible for the "Single car renter" to compete, but making serious money is tricky.

I am going to offer a conuterpoint to this thought.

The larger companies Jake describes likely are doing this for profit. They also likely have a much better handle on costs. I would fully expect a single person whose goal was to raise some money to offset some costs to be willing to provide a better price than a larger outfit like mine whose goals were different.

I woud argue that we can - and do - provide way more VALUE, but it depends on what the goals of a renter are as well.

I think there are potential customers for both types of business, professional and 'personal'.

Overall, if you were going to try and roll the dice and catch some money for a short term gain, you could do it if you were lucky. For a longer term committment, you might want to attack things differently.

Call me Dave, I will tell you what we do now and why. It has really evolved over the last 5 years.

[backformore]

Every time a thread like this comes up I have the same question I don't know that I've ever seen it addressed.

What do you all do about liability? Not the car but the renter?

[Andy Bettencourt]

Every time a thread like this comes up I have the same question I don't know that I've ever seen it addressed.

What do you all do about liability? Not the car but the renter?

I am not sure what you mean...

[backformore]

Your renter is in the car. Someone who has a written contract with you providing the car. A wheel comes off and the cars wrecks. The renter is seriously injured or worse. The wife/mother/significant other sues you. Now what?

[Knestis]

If you're doing it as an actual business, you have a corporation between the risk and your personal assets. If you're doing it for fun, you choose your renters VERY carefully, taking that risk into consideration.

Either way, the short answer is "hire counsel and defend yourself."

K

[joeg]

"sell" them the car.

[Knestis]

A litigious now-single mom with kids to feed - or her lawyer - isn't going to let that fine distinction stand in the way of a suit. It might strengthen your position but it doesn't make you sue-proof.

K

[Andy Bettencourt]

Let's be clear - NOTHING MAKES YOU SUE-PROOF.

Our contract is 5 pages and it is full of legal-ease. It does make the renter acknowledge multile times that 'this is automobile racing, it is dangerous, you could get hurt or die and you accept that risk willingly'.

We do committ in our newest documents that we will provide a safe car to the best of our ability but due to the nature of what we are doing (placing abnormal stresses on parts and pieces) is inherently dangerous and they accept all responsibility for being in that racecar.

It's a sticky game, but it can be fun if you do it right and are willing to take some risk.

[backformore]

I've been away for a little while but the answers are about what I assumed. I'll admit I end up being a little chicken s#@ about taking the risk, especially with a "stranger"

I think the idea of "selling" the car is the best way to cover all of your risks, both car damage and liability. In order to cover yourself, I think you would have to really sell the car, not just "sell" the car. That means getting fair market value for the car which means your "renter" has to have a pretty good sized chunk of money. Has anyone actually done this method?

[Knestis]

If your renter doesn't have the chunk of change necessary to buy the car, you don't REALLY want them driving it.

I knew a guy in Seattle who sold the same car over and over again. He signed a contract with the buyer to take a down payment, and monthly payments to pay it off in one season. He also provided storage and at-track support with the sale (great deal, eh?)

The kicker was that the contract said that if the buyer ever missed a payment, ownership reverted back to the seller. I know he sold that car to at least two different people who ran out of money before they paid it off. And because the seller kept it at his place, he never had to repo the thing.

K

[Flyinglizard]

When I started doing the rental thing, I was one of about 5 guys renting.Now there are at least 25.
My waiver states that "the driver, or the drivers' estate can not sue for anything, ever. Racing or driving this car, may result in death. I accept that fact" "I also agree to a total crash cost of X", And a" scuff fee" of 100$ , no matter how it happened. Sign , date, bring cash or good check.
I have had the same car rolled twice, and one total in 20 years.
Yes, I rent the VW cause they go fast enough in class and they are dirt cheap to fix. Parts are at Auto Zone, etc.
I get about 400per hr, plus a transport fee of 200 per day. Average is about 1000 per regional. 1800 per school.
Mike Ogren, Protech Power

[wcmcarlos]

Hi Mike,
When I wrecked Mike's car at Sebring, he was very fair.
He had my wreck deposit check, and called to report it deposited into his account.
We had an eyeball to eyeball agreement that I would be fair, concerning tire wear and so forth, but I knew what I was doing.
If I could not afford to drop it off a cliff, I had no business driving it.
Thanks Mike,
Carlos