Car Rental Biz?

[kgtest]

Been pondering the idea of renting out a car with Turo or other local peer to peer auto rental entities.

At first glance this seems like it could have some pro's and some cons.

Pro's are extra income and tax incentives with the extra business entity I create. I get to drive a car I might not otherwise purchase.

Con's...It's a business after all. Dealing with incidents, carrying special or specific insurance that covers peer to peer, inconvenience of extra time to drop-off and pickup the vehicle (likely at the airport ~ 40min round trip) with little kids at home.

I doubt anyone has done this sort of thing on the forum but maybe. I would mainly be doing this to reduce my cost of ownership on the car, with the inherent risk that someone could total my asset which would be really bad, or best case scenario the car is driven just as I would drive it as a daily driver.

The reality that I get enough ride's booked to cover the total cost of the vehicle is slim, but it would offer a decent tax break with the bonus depreciation and of course any expenses related to maintaining the vehicle and mileage rates.

I've gone on Turo to scout the viability and booking probabilities. It looks like you can get anywhere from a few bookings a year to a dozen or more. It also looks like the car's that get more bookings tend to be your average sedan's and minivans as well as some SUVs.

I am looking at a Camaro Convertible as the first vehicle to rent out. If it goes well, I might purchase a second vehicle like a Jeep Grand Cherokee or Chevy Suburban.

What is everyone's thoughts. Too risky?? Not enough reward? YOLO? Decent business proposal?

HAPPY NEW YEAR!

 

[Sunset]

You forgot about the possibility that people will rent it and drive it very hard, do burnouts, etc... Something that will accelerate the wear but not total the vehicle which would be covered by insurance.

What are you going to do if the brakes fail or a tire blows and the person sues you for lifetime medical expenses ?

I really don't see this making a lot of money, especially if you factor in the drop off , pick up time.

 

[njhowie]

There's a couple folks on Youtube who post what they've done and how they've done with renting out cars. It might be a good idea to check out some of their videos.

 

[braumeister]

I've rented through Turo a number of times. Started out during the pandemic when rental companies had hardly any inventory because they sold everything to stay in business.

Turo has been great for me, and the car owners I've dealt with seemed to be very happy with what they were doing. One guy had five Teslas in the program and said they were rented out most of the time.

 

[kgtest]

After further review. Bad idea for me. Lol. Was fun going down the rabbit hole watching a bunch of YT vids and reading articles about the success stories and pitfalls.

 

[kgtest]

I've rented through Turo a number of times. Started out during the pandemic when rental companies had hardly any inventory because they sold everything to stay in business.

Turo has been great for me, and the car owners I've dealt with seemed to be very happy with what they were doing. One guy had five Teslas in the program and said they were rented out most of the time.

Yeah I now have 3 Turo Rentals under my belt. All positive experiences. I like the fact that I don't need to sit in the line at the rental place waiting to sign a bunch of paperwork. I just walk out to the parking lot, find the vehicle that was left for me, hop in and drive away. Same thing at dropoff, park it at the airport and go inside.

 

[kgtest]

I learned a few things from the current Turo providers that others might be interested in.

Apparently there is a fixed cost to join that you pay per vehicle. Could be $1000-3000 not sure the specifics. So before you even book and rent your first vehicle you are at a net income deficit with Turo.

Insurance. Turo offers there own insurance and has reimbursed people for damages with mixed results. Most Turo Hosts recommend purchasing additional insurance outside of any standard or Turo specific insurance.

Utilization. Obviously the more utilized the car is, the more profits. But its not all apples to apples as 10 trips in 20 days would carry a higher operating cost than 1 20 day trip.

Economy vs Luxury. People have done experiments and apparently 5 economy cars with a total cost of 30k will earn more than 1 30k luxury car. And that includes all expenses, insurances and trip drop-offs. If you do it right apparently you can earn 2x the Luxury income with 5 economy cars over a similar period. I would argue there might be more than 2x the amount of work though, and time is worth something. One person cannot drop-off 2 cars at once, so labor costs would rise to be able to support more hosting of 5 cars vs the hosting of a single car. Unless those 5 economy cars are rented out one time for 20 days, and the single luxury car is rented out 20 times over 20 days.

Based on my initial curiosity, renting out a luxyury/sports car is likely not feasible, and I don't want to get into the value car rental biz lol.

Still talking to DW on the idea of buying a ZL1 Camaro. It's a 75k car after tax and title, so its a lot of $$$ for a car. With 3 little kids at home who will need some college savings I would feel slightly guilty and selfish buying something like that when its not totally practical, but that's kind of the idea is to buy a FUN car, not a practical one. We already own practical cars lol. It wouldn't set us back much in our ER goals, maybe half a year or a few months extra of working...unless our future earnings actually outpace our projections...then we would likely just run into a scenario the opposite where we could have potentially retired a little sooner than we anticipated. Mentally I am fine working until age 50 to 55, and I could imagine starting into age 53 I would start feeling the urge to actually quit. Maybe not. Time will tell.

For now, its just a thought. Might BTD and buy the car someday. Might regret buying it, might regret not buying it. Sort of a balance between living life the way we want vs the way we should.

 

[Sunset]

Don't you need 1 practical car, then have a fun car.

I do see an issue with having more cars than drivers, shifting cars around, not maximizing the usage of each one.

 

[jtmax]

I think if you have public transportation to and from Airport Turo business is worth it. It's very little work for making easy money and getting tax breaks and you get to use the car as well. Most of us don't use the car enough during retirement so it's a great way to get extra income during retirement where you need flexibility in where you live and schedule. You can reject people who have bad rating I assume so that can reduce the risk.