BMW to Let Car Owners Rent Out Vehicles Like `Airbnb on Wheels'
- Thread starter nyccsi
- Start date
That's really interesting. I was chatting with a neighbor who happens to be an executive at one of Audi's US affiliates about the growing number of people in the US who don't want to drive and the growing number of young people here in the US don't want to own cars.
We are both finance guys, and the issue that immediately came to mind is how to determine an amount of rent when cannot predict the residual. There are no usage models or other predictive data to allow reasonable estimates as to usage, useful life, wear and tear, etc., so this would be a huge problem for a company trying to do this on a large scale.
The system BMW is proposing does away with this problem (or more specifically disperses the problem and shifts the financial risk to the person who owns the rental car).
One huge issue with doing this in the US is that the rental fees, no matter how small, are taxable. I predict we will soon see an information reporting requirement for any such payments so that the IRS can track them.
We are both finance guys, and the issue that immediately came to mind is how to determine an amount of rent when cannot predict the residual. There are no usage models or other predictive data to allow reasonable estimates as to usage, useful life, wear and tear, etc., so this would be a huge problem for a company trying to do this on a large scale.
The system BMW is proposing does away with this problem (or more specifically disperses the problem and shifts the financial risk to the person who owns the rental car).
One huge issue with doing this in the US is that the rental fees, no matter how small, are taxable. I predict we will soon see an information reporting requirement for any such payments so that the IRS can track them.
While it is just the Mini brand renters will have the pleasure of driving one of the most unreliable cars on the road without having to take a 30% depreciation hit driving it off the dealer lot. What a deal.
I am not a finance guy but my gut feeling states this:
No matter what you charge on a classic....it will not outweigh the wear & tear of the time rented...ie there is no market.
However BMW probably got this idea from their press cars and is trying to justify it.
I guess it's like adding water to shampoo...it sort of works....
Not trying to be rude, just my .02 cents
-Mo
No matter what you charge on a classic....it will not outweigh the wear & tear of the time rented...ie there is no market.
However BMW probably got this idea from their press cars and is trying to justify it.
I guess it's like adding water to shampoo...it sort of works....
Not trying to be rude, just my .02 cents
-Mo
When I pushed the "no car ownership need" to my boss many years ago he called me communist...
He probably wished he could have voted for Sen. Joe McCarthy.