Today I will give you an example of one of the cars I use to make money on Turo!
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Here’s how you make money on Turo
A lot of people will be curious, how much can you actually make from Turo? Here’s a small snippet of what you can expect with only 4 cars! This was a recent revenue screenshot when I only had 4 vehicles. I will tell you the step by step process on how I run my business and how you can do the same. I am currently in the Greater LA market, if anybody wants to chat about the business I’m happy to assist. I’m currently a Power Host ($9000 earnings in past 3 months, 50 reviewed trips, 90%+ 5 star ratings). As the income from my fleet increases I will provide up to date earnings. The best part about this is that either you can be a hands on host or do it remotely. Each has its benefits, but the overall idea is that this can be profitable. It’s certainly not a get rich quick scheme, but if you are able to provide consistently quality customer service you can establish a customer base that will sustain utilization rate during slow months. This article will help you learn how to make money on Turo. Further articles will elaborate on the details, this is just a taste!
If you want to see my fleet, click here!
2018 Earnings
Making money on Turo (2018 Equinox LT)
Pricing:
This part of the business is extremely important in determining if you are going to make money on Turo. If you overpay for your car, that will eat up most of the revenue that you generate. You don’t want that do you? Here’s a recent example of vehicle I purchased for my fleet that I got at an absurdly good price. It takes timing and patience but deal likes this exist. Make sure you can take advantage of it when the time arises.
1 Pay lease (this will bring the money factor aka interest rate down): $3,200 at LA county tax
Using the skills that I learned being an auto broker in LA I am able to find deals that result in high profitability. A misconception that a lot of people have are that new cars are very expensive due to high depreciation and thus cannot be rented out at a profit. I want you to get rid of this mentality. New cars CAN be expensive and cheap. It all depends on the price that you negotiate and factory incentives for the month. I’ve had many scenarios where I purchased a new car at a cheaper price than year old used models. This part of the equation is extremely important in running a profitable enterprise (make money on Turo). Every dollar you save when you buy the car is a dollar that is added to your bottom line.
Remember, this is a leased vehicle – this means that the entire cost of our lease will be applied towards our revenues (there is no equity at the end of the lease). The mileage cap is not a concern as the car will generate enough revenue before you run out of miles. Based on my 2018 Accord Sport the car will undergo 7,000 miles for every 6 months of operation. This yield a working life of 17 months. You can return the car early to the lessor since the balance of the amount is owed. They might even be happy that they get to sell the vehicle early ;).
How do you find pricing like this?
- Use TrueCar.com to get a baseline price to aim for
- Check Autobytel for incentives
- For Chevrolet each dealership has Flex cash they can put on an old unit. This can be very significant when the total cost of the lease is under $10,000
- Make sure the money factor is not marked up, you can check for up to date money factors at Edmunds forum
- Use an Auto Broker
Expenses:
- Monthly Lease payment ($3200 spread out over 24 months): $133
- Comprehensive Insurance (if you plan on driving it as well): $80
- Car Wash (6 turnover): $60
Total Monthly Expense: $273
Revenue ($45 daily rate NOT including delivery fees):
Since Turo takes a 25% cut from the daily rate, you effectively have a $33.75 daily rental rate. Using the data I have over 6 months of renting on Turo average utilization rate is nearly 80%. Being conservative, we estimate our revenue based on a utilization rate of 70%. This will yield us a monthly revenue of $708.75 (30 days * .7 *33.75).
Our monthly profit on this one vehicle is $435.75! That means it would only take us a little over 7 months to reach profitability. Any income generated after our investment has been recouped will go entirely to our goal of make money on Turo! After 7 months if all else is constant we will net $568.75 per month until we either reach our 20,000 miles or the 24 months on the lease have elapsed.
You are probably wondering how much time is involved in managing this car for the month. Let me tell you: not nearly as much as you would expect. Let’s consider that we will deliver/wash ourselves for each turnover. Washing and vacuuming the car itself will take 30 minutes if you do so by hand. After you finish washing the car you will drive to the customer location (if you live super far away this obviously would not work and you would need to only accept pickups). Assuming it takes you 30 minutes each way to get to the customer’s location or airport our total amount of time spent per car will be 2.5 hours. Since we have 6 turnovers the WORST case scenario is 15 hours spent for the month on this one particular car. From my experience I estimate customers choose to pick up the vehicle 50%+ of the time to save the delivery charge. This will result in even less amount of time required. $435.75/15 = $30/hr before even considering deliver fees/tips that you receive from the customer.
Ways to minimize expenses:
- Use a coin operated car wash for maximum cleanliness and speed.
- Don’t drive the car for personal use. This will eliminate the need for comprehensive insurance (you are technically paying for insurance twice when Turo takes 25%)
- Purchase certain cleaning tools. I purchased this vacuum and it is amazing. It’s a great tool to get between all the nooks and crannies of your car. It’ll pay itself off after 50 trips.
- I purchased car washing supplies and they save nearly $4 per turnover. Here’s a link to the brand I like to use – you can purchase gallons and it’ll cost under a dollar each wash if you are starting from scratch you can purchase this kit: Chemical Guys Package
Ways to increase revenue:
- Dynamic pricing during high volume seasons
- Maximize utilization rates through discounts on unbooked days
- Offer alternative services (1 way trip, prepaid gas, child car seat)
Follow this guide and you can make money on Turo. If you have any questions do not hesitate to comment below or contact me directly. Good luck!
What is your advice for someone looking to get started renting their car out on Turo? Can you rent your car out if you only have state minimum insurance coverage? Will the Turo plan cover everything while renting? How did you create a large Turo fleet?
Hi Joe!
Thank you for reading my article. My advice is just try with your personal car- if your market has demand you should be able to get a taste of how often your cars could be rented out. If you only use the car for rentals on Turo you actually don’t need any insurance. When you deliver the vehicle to a Turo customer you will be covered by Turo’s coverage. While this is a way to lower your expenses, I keep comprehensive coverage on all my vehicles. The peace of mind that you gain from having extra coverage makes it worth it in my eyes. I just started with a few cars and expanded using my credit. I am in the process of creating an LLC and will be expanding my fleet using the business name in the future.
Hey really interested in trying this out with a leased car, I don’t know whether to start with a SUV, Minivan, Mustang, Jeep Wrangler in Hawaii
I have a motorcycle to get around and I don’t really drive, i’d use it on the days it would not be rented if needed or just let it sit.
I would love to connect and learn more, in addition to using any codes and helping you out in any possible way.
Sure! When I get my affiliate link from Turo I’ll provide it to you. I’ll help you from set up to you expanding your fleet if you use that link. You can always contact me here! I’ll write more articles soon regarding the topic.
What are some challenges that you’ve had with Turo?
For example if I start I know I can have place to clean cars using their power washer, and vacuum.
However, if I want to expand I won’t know where to store the cars.
Also heard there might be an issue with leasing?
What are your thoughts on buying, then selling around 24k miles like car rental companies?
Do people call you at different times of the days, like when you’re sleeping?
Any struggles while scaling? I see some people have 20 cars while others have 4.
Thanks! and just let me know when I can use your affiliate link, I’ll be waiting.
I’ll post an article in the next few days outlining storage, daily operation, and scaling. As for the affiliate link I am waiting to be approved.
Hi Jerry,
thanks for your article. I would be curious to know where do you park your fleet and how much you pay for the parking. As well as other logistical aspects of the operations: do you deliver and pick up the cars yourself or hire someone, how much time does it takes; how do you deliver and take the cars to/from the airport, etc. Looking forward to your future articles!
-Victor
Hi,
I park my cars in my apartment complex. Since the cars are rented out so often I haven’t had more than 2 or 3 cars at a time. On the occasions where there are more unrented cars, I will either use guest parking or pay for parking elsewhere. Check with your city to see if you can park cars on the curb overnight!
I currently manage all of the cars on my own. I averaged around 40 hours spent per month for 8 cars. For delivery, I will drive it to the customer and take an Uber pool back – if pool ride isn’t available in your area it might be very expensive to deliver but you can adjust your delivery charge to compensate. If you have a friend that can give you a ride back that would work well too!
On the expenses , you mentioned LEASE payment , insurance and car wash? How about maintenance? And making less than $600 per month / car? Is this really worth doing or TURO will just take advantage on other people”s resources? Please help out. Thanks
Hi Rey,
Thank you for your comment. For most leased vehicles they have manufacturer service plans included. Any major repair would fall under the comprehensive 36month warranty most cars come with.
You can also prepay for scheduled maintenance for around $20/month.
The profitability will depend on your market as well as the cars you choose. I currently have a fleet of 13 cars and turn a profit. If you’re able to find organic renters you will make significantly more but Turo makes renting cars easy.
Hi,
Thank you for the great info. I want to know do you need to pay for any damages when you return your leased cars? ( Turo: anything < 6 inch damage is normal wear and tear, but car deal is only < 1/2 inch counts as normal waer and tear)
Do you offer any weekly or monthly discount on Turo? and what if people put a lot of miles on your leased car do you still make any profit?
I also have 3 cars on Turo and sometimes my cars get 2000+ miles just 20 days.
I really wonder if leased cars make any profit.
Thank you,
Thank you!!!
Hi Jerry,
Thank you for your article. It is very useful. I listed my personal car on Turo for almost two month but it has not had any booking. One more question, should I switch my insurance to rental insurance because the company said they will not cover my car if I use it for Lyft, Uber or Turo. Please help me out. I would like to connect to you and learn more. Thanks
Hi Jerry
I am about to start with Turo. The issue is that I have a lease which I am overpaying for based off credit and no down payment. I have a 2016 Hyundai Azera Limited. It has all the bells and whistles like any top end car. I am currently paying $660 per month plus $100 for insurance. Do you think I can make a profit on it or make it pay for itself?
Hi Kevin,
Ouch, that’s a pretty high payment. Depending on your market you should be able to recoup most of the cost. I would say renting it out on Turo would help with the payments. If you’re under your mileage allotment it may be a good way to help with the payment.
You do leases? Is that legal? Does it say in your contract that its for personal not business use? Or do you asked that at the time of lease? I imagine you wouldnt want to tell them that and increase you cap cost.
Hi Jerry great article! I am thinking about putting a car on Turo, but I have a full-time management position that I love so I don’t have the time to put in to deliver/wash the vehicle. I am looking at a service such as Hassle-free car that manages all the day to day renting, cleaning and servicing of my vehicle for a monthly fee. I realize my profit is less, but I am ok with that as the vehicle I would be leasing for this would be used exclusively and thus the availability would be higher. My problem is that Hassle-free car is located in Denver, CO and I am in Anaheim, CA. They do accept cars from other states, but I was wondering if you know of a service or maybe any TURO hosts that offers a similar service for people who want to add a vehicle to an existing fleet?
I have a friend in Los Angeles that could potentially help with that. Email me at jerry@sharingeconomysecrets.com for his number. I manage cars for others in Las Vegas so if you ever want to come out here let me know! Sport cars do exceptionally well here.
Jerry – Great comments – way to go!
I have been hosting on Turo for 5 months and have a single rental. Here are my observations for successful renting.
– Research the All-Star Hosts and see what cars they have. I decided on a Mini and it’s been golden!
– Buy a car that is 5-7 model years old. Let someone else take the majority of the depreciation hit. Look for private sellers. Don’t buy a car with more than 10K annualized miles/year. Typically try and pay no more than $10 – $12K. Remember you need to sell this car on the back end.
– Holding period. Plan on holding the car for 24 – 30 months. Ideally your low mileage car will be in line with similar car’s mileage for your model year at retirement of the car. Build a budget as a bench mark so you can see how you are doing compared to actual results. You should be able to get a return on investment of 1.50 to 2.00 times the initial purchase (including repairs, taxes and registration fees).
– Maintenance Jerry is right, buy a shop vac with hose extension and wash your car at home. Use a local car wash if necessary and use quarters to avoid plastic card convenience fees. Do your own oil changes. Surprisingly Wal-Mart has super cheap brand name synthetic oil for $4-$6/qt vs. auto parts stores $10/qt. Remember your renters are going to put 1K – 2K miles per month, so expect more frequent oil changes.
– Clean the car interior after each use. Use disposable wipes or 409 and micro fiber cloth and wipe down steering wheel and gear shift especially plus door panel controls and armrests. Use foam window cleaner and get all glass panels clean inside and out, especially exterior wiper halo. Treat the interior of the car as if it were a hotel room. Guests want a fresh clean car. Also get a liquid air freshner and run it on recirculate for vent air, heat and air conditioning modes until the car it fresh for each mode. Renters are not always the most hygienic.
– Maintenance/Incidentals Track ALL your costs. These include the little items, like cleaning, fuel top off, delivery costs (Uber, lightrail, etc.) Budget $50 – $100/month, depending on your car. Be sure to charge enough for these extras in your pricing and add-ons. Use a spreadsheet or Quicken/Quickbooks and run this car as a small business.
– GPS Tracking 99% of people are honest. The 1% though can hurt you. Had one renter who used my car as a load transportation vehicle for drug sales. They abandoned the car and it took 1 1/2 days to find the car. Get a GPS device that is concealable and not an OBDII plug in. $10/month service fee is worth it.
This may seem like a stupid question, If I deliver a vehicle, how do I travel back home in a city without good public transportion
1) Hire Uber for $50.
2) call a friend (not practical)
3) call my wife (impractical)
That cuts into my profit margin.
Or do the renters come to a place to pick the car. Airport is far away from my home.
Do you think getting a 2018 c300 with 47k miles will be a good idea? I would get an extended warranty to 100k miles and my
Monthly payment would sit at around $550.
Could I make money on Turo with that car and that kind of payment.