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!
Making money on Turo (2018 Equinox LT)
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
- 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!