As a Branch Manager at Enterprise Rent-a-Car, I can assure you that luxury cars do not yield the highest rate of return. Believe it or not, compact, full-size sedans and pick-up trucks are cash cows.
literally what I was thinking. The moment he said luxury & exotic I knew exactly why it failed. No matter the deliberation on yall business plan or anyone involved experience, common sense would've saved them from this😂. I have a friend making 10k a month with basic cars on Turo. Its really common sense. Even rich people drive hondas so idk why they would even think that was a good idea. They was better off starting an exotic rental company.
Seems like a duh on this point, I feel for the guy but you have to know that people are not renting sports cars for multi-day rentals typically its going to be a one and done for someone that cant afford to buy one to show off. Most people on business are not going to justify expensing a fancy car to the company.
I disagree when you say there is nothing you can do. When Turo denies your claim, rent another Turo car and crash it into your car. Now they can do a full payout.
I don't recommend renting exotic cars on turo (think that's what happened here), functional cars rent well on turo, Suvs, compact cars that are worth less than 30k with high residual values that are normally not sold in fleets to rental car companies(Subarus, Hondas, Jeep Wrangler, Toyota etc), needs to be suited for the slightly above average income earners who travel that don't want to wait in rental car lines when they land. He had two good points take a lot of pictures and you need to work or live close to a major airport, everything else take with a grain of salt. Also financing all cars involved doesn't work. You need a fleet and to own at least 30-40% of the cars or have that much equity in each. If you are thinking about it start small, buy a couple 8-12k cars and go from there once you start building.
My thoughts exactly. You nailed it. Cause he they were really a business and really did the research. They would’ve known the airports were where the money was. That’s basic research. And who starts out with exotic cars😳. I live between DC and Bmore. Two major international airports and I know how people trash cars when they rent them. That’s common sense. They sounded green as hell. Not smart business men. 😂😂
I think the high end luxury cars was the downfall to begin with. I am using nice decent gas saving cars that cost under 15k and im making the payment plus almost double actually
He just dumb asf that's ppl but I'm just watching his stupid face saying no to turo being one of the most lucrative business if you buy economy cars that won't hurt you.
Great video Dan. Love hearing the business side of Turo. You just saved alot of people from alot of headaches. I could never rent out any of my cars...Hell, I don't even like the dealer changing my wiper blades. Nobody touches my cars 'cept me! So the thought of someone not opening the door properly on my C7 so not to get fingerprints all of the place makes my skin crawl.
This is probably the best video I have seen covering experience with creating a rental business through Turo. Thanks for the video and thanks for being comprehensive, honest, and to the point.
Brother - That was some thorough and informative evaluations on how to run a business. People pay lots of money and a ton of time for that kind of insight. All for free. Thanks for the time and business insight. It would take years to gain all that knowledge on ur own. 👍
Thank you Sir! I literally spent a week trying to come up with a financial model of how to make a business out of Turo. Finally gave up thinking i wasn't smart enough. You answered every question i had and confirmed my suspicion. It ain't possible. Done. Moving on from Turo.
I disagree with the whole video. One point you missed is the type of location. If you are in the best location where people has to fly into your town and your town is a world class tourist town, then that's hitting a gold mine. A friend of mine has over 30 cars now on turo in this type of location and 2 mechanics and one front desk girl and an office. He's going 2 years in turo now and has accumulated impressive assets in short period of time.
I live 3 miles from SFO, with 3 Teslas and one Porshe, I can tell you that is not working. Already sold one Tesla and planning on selling more. Everything this guys is saying is 100% what I’m going through.
@@juliuss1489 that’s good. Know someone with 35 cars and she is making good profits, and rolls those profits to over found her LIFE insurance and is building her own bank so she can borrow money at low interest using her own terms. for other business investments. For examples like crypto and real estate.
@@normalguysupercar Dude are you seriously saying that you cant rent out your car 2-3x a month?? that's all it takes to break even when doing most exotic cars... a 96 month loans with 10-20% down is less then $1k/month per $100k car and any $100k car (gallardo f430 amg gtr g63 etc etc) will all go for at least $350-$600+/ day on turo, ie less then 2-3 days to break even in which you are still making that $1000/month off that loan because only about 85-90% is principal with 96 month loans and of course you dont ever by depretiating/new cars. Also i do somewhat agree turo is not a good form of a business its simply best used to pay off your car, turo also pays for all of the damage done to the cars of course the only issue with that is the car has to be down while getting repaired none the less like any business and financial endeavour plan ahead and have the money saved.
@Lil Blockchain First off you never buy any car that is depretiating and second off this is the best most profitable way to lease a car when you are a financially literate business man... look at the numbers its is common sense even for someone not financially educated... It is only $100/month per $10k car so a $100k car is a measily $1000/month instead of it being double that with a 60 month and still about 10% of the payment goes to interest ($200/month interest for a $2000 payment) compared to the 15% with a 90 month ($150/month interest for only $1000 payment) therefor not only is it cheaper in every way, but that $1000/month extra is a opportunity cost of at least 10% so that's another $100/month lost when you account opportunity costs by themselves most people get around 10% ROI, ie opportunity cost, and i can personally get 25%-75% with real estate and 100%-1000%+++ with crypto currency so it is dramatic opportunity costs but then again im sure you know nothing about what im talking about because your part of the 90% of the world that is financially illiterate and unmotivated slaves made by our school system to help us rich people get rich and keep you poor people poor and our slaves :). My $300/month bentely with $200 insurance is loosing nothing i make money with it in multiple ways and is a tax write off as i am a real estate agent and investor and multiple other things and i have multiple other cars that i might as well just be putting the money in the bank its no different loss wise but instead i have a insane collection of my dream cars. So ya im not loosing anything other then the insurance fking kills but its the way she goes when your a car guy. Please get financially educated, god bless
Im also only 27 so its not like im old at all its purely from being financially educated and determined to fulfill what ive learned, I also found myself a very good successful mentor from the starting of my career.
Dream4Pro lol you are so full of yourself. No wealthy real estate agent / investor or whatever you are claiming to be would upload videos of himself playing video games on his RU-vid. Quit making stories up on RU-vid to make yourself feel better and get outside and actually do something productive bud.
After having my own 3 cars on Turo I came here knowing what he was going to say. Well he said everything I would and he is right. I was there for 2 years with 3 cars and broke even. The amount of work you put in is crazy.
You had a staggering 3 cars and it doesn't work for you. Make sure you specify "for you". Just some food for thought. Did you know a medium size grocery store can cost 3-5 million dollars to get started and doesn't expect to make a cent in profit for the first five years?
@@facetiouslyinsolent8313 that would not surprise me being the grocery stores make one of the lowest margins in any business. I'm well aware of all of that as I have run several businesses. I'm just saying like many out there it's not worth dealing with turo's crap. you may be able to have a larger fleet of cars and do very well but for the average person out there I do not think it's worth the headache myself.
I greatly appreciate you taking the time to share this info! I was looking into starting something very similar to what you were doing but now I will definitely be rethinking my strategy.
Interesting topic on this, well. First of all, I think Turo make profit and as a host we need to create a niche to make space to create opportunities in order to make profit on it. So everything go by which car in your fleet. Funny thing here, I got 458 /two G63/ RangeRover from “CNC Motors” but I can’t list my 458 on the Turo because value and some restriction. Unless you have commercial insurance or corporation to list it. But honestly I will said, if you want to list car on the rental business. However, I do list I8 spider, X5, A5 convertible, R8, c300 and C63s. Overall, I make good profit on those car. There is couple important info, you need to use Turo as your marketing platform to gain your loyal customer and once you build those clients, they keep coming back to rent it from you without Turo. I think that’s how I make my business profit just FYI
8:15 pretty much sums it up in my eyes. I never viewed Turo as a platform for someone who wants to run a rental car business. I thought it was for people who don’t drive their cars every day and want them making supplemental income for them instead of sitting in the garage.
I sure hope what you mean by "learn" is the fact that he went in blind and when he failed blamed the platform and took no responsibility for his own failure.
@Mykel Hardin Anyone can see that's dumb. Those cars are expensive, require expensive insurance, are unreliable as fuck costing a ton in repairs, and heavily depreciate, so they're worth nothing in a few years (or less if you rack the miles up).
THANK YOU FOR THE HONESTY AND TRANSPARENCY IN THIS VIDEO!!! TOO MANY PEOPLE ON RU-vid/ INSTAGRAM THAT ONLY TELL YOU THE GOOD SIDE ABOUT THE CAR RENTAL BUSINESS!!! THANK YOU!
I agree don't get emotional attached to your cars. We have five on the platform and our 2020 Grand Cherokee was in a accident causing $6k damage. We were reimbursed within a week. I am in Las Vegas and business has been good even through pandemic. I am staying in the $40k to $50k car range . Don't want to deal with the high end cars headache. Enjoyed your video.
Lol dont listen to the clown. He didn’t know what he was doing. Put your cars on Turo, its free passive income. I just started my business here in Houston and its doing well with 1 car so far and I’m looking to add another
What a great value add. Thank you. Video idea: you said there are many other ways to make more money with cars. Do an overview of those ideas in one video and then dive deep on each for subsequent videos
Interesting update Dan. As I always suspected , if renting cars was that profitable Turo would buy and then rent out a fleet of their own , but instead they get the guaranteed revenue ( albeit with movable goalposts in their favour ! . 😉 ) from the car owners themselves, with none of the hassle , drawbacks or stress of everything you mentioned .
Marco FedEx has the same business model for Home and Ground. All those drivers work for subcontractors with their own trucks. It is very profitable with a route costing $100K and netting the same yearly.
Honestly best value for an up and coming you tuber seems to all in on the “hot cars” I’ve seen some channels go from low numbers to 100k plus from Supra gt500 c8 content.
Definitely appreciate your experiences with Turo... After your feedback and others its definitely not an option for me. Always get at least a little out of your content..thanks!
Very good advice, you did the work and you saved me from moving forward. I had already guessed at this, but you made it very clear. Thank you, thank you.
We really appreciate your total honesty. Investing your time and money on a depreciable asset is not a good idea. I always thought it would be risky to hand over a $50K asset to a total stranger where you can't see what they can do to that car. I mean they can mess around with your engine and you have no way to prove that!!
Airbnb is a far wiser idea, real estate gains value while cars are guaranteed to go down in value. And turo is just a hassle if you have multiple cars and are thinking scaling
As a fellow entrepreneur, I can attest to the validity of the circumstances faced regarding trying to run a business renting cars on Turo. Initially, we wanted to buy cars we wanted to own personally and offset the cost of ownership at a minimum but ideally be profitable. My partner and I have done the math many times and played out pickup/drop off scenarios/alternate locations, etc. In all cases we failed to launch due to the market rental rates of similar car we planned to place on Turo minus projected expenses. Normal Supercar Guy (Dan) has even beaten us by using AI to determine the best ROI of cars on the Turo market and had a dealer as a partner to access all the cars at the best deals (Brilliant)... 👍🏾 I loved the video and appreciate the detailed recap on how you started this business, and why it failed. Thanks for sharing not just successes, but the failures as you have saved many people thousands in their own attempts. I personally cannot think of a better plan than what you executed. I predict that if there is ever a shortage of people umable to do math, then Turo will eventually go under unless their business model drastically changes.
@@normalguysupercar Turo might last if the volume of naive hosts in a market is large enough. As long as there are enough people who take long enough to figure out that they aren't making enough money, Turo could continue to provide the renter with below-sustainability priced cars. As long as hosts continue to list cars and people continue to rent from them, Turo makes money, even if the individual hosts do not and eventually quit. I wonder if there is any way that things could be structured to minimize the "race to the bottom" issue? Maybe Turo could set a minimum rental price for every host's first ten or twenty rentals? That way completely new hosts would not undercut the market until after they have a bit of experience, but experienced people could set their own price. Or set a minimum rental price based on the average rental price (or a fraction thereof) of similar cars in the market that have a high enough rating with a minimum number of rentals. Something like that might create too much of a barrier to new hosts which is bad from Turo's point of view, but it also might increase the number of long-term experienced hosts which would seem to be good for Turo.
Very helpful video. I was considering starting up a little side gig with renting out luxury and sport vehicles. This video hit a few keypoints that I did not really factor in, and after watching this video I can definitely say I have been dissuaded in a good way from making a horrible mistake.
Henry why would it be them? They had a computer program tell them “pick this car and you win!” But choose to buy exotics or cars they like with loans that came with interest on them... They had a car dealer guy with them that bought the cars from the auction but still lost...they had all the tools but still lost...that doesn’t sound very smart Someone at some point had to have seen the fuckery and must have been to pussy to say anything about it
You guys should have formed an LLC, bought 8 houses for $60,000 each, 25% down, rented them $1000 a month. Your net would be 60% or $600 (Mgmt fee included) ea x 8 = $4800\ $57000 annually. Hours per month invested per month = 1-2 hrs.
Had thought about doing Turo after you guys started, was going to do some lame car to start, thought I'd give it a year or so. Sucks for you guys, you nailed it with the Turo looks after Turo, a lot of companies are doing this when they need you and your assets to make them money. Looking forward to you having 400k subscribers by 2021. Happy New Year Dan.
If you HAD to do it again, how would you approach it differently? What were some lessons that were self inflicted? Would you have started at smaller scale? Would you have ran the business with cars that weren't financed?
I feel that any business can succeed its just the matter of marketing your product well outside of Turo and ensuring that your money is going into the car you are renting out on Turo. If that happens you have a strong chance to paying off your car and making 100% profit on the first one which then you can rack up your fleet.
I would be curious about your stats on how long your rentals are, etc.. cause it seems like these more exotic cars would be used for a couple days at a time if that... and then you have more days sitting, more frequent claims, pictures, etc... Seems like if you do more mid-range or fuel-efficient options, like business or family cars people would be more likely to rent for week-long trips.. instead of getting $150-200 x 2-3 days, you could get $80 x 4-7 days. Around the same money but less work involved, also those cars don't depreciate nearly as hard as luxury/sports cars will.
I've been listing ars on turo for about 3 years now. I put up 10year old cars and make just a few hundred $$/ month. It doen't make much money for the amount of work you put in. But the mileage really helps out on taxes if you're doing this as a side hustle and work a normal W-2 Job.
I once let my close friend borrow my car. Next day that car got hydro locked because friend drove into stream. This happened when I lent it to a *friend!* Can't imagine lending it to total strangers..
I've been doing Turo for 1.5 years now and these are all FACTS!!! I sold off most of my fleet and I'm primarily focusing on offsetting a few car payments now.
This video was perfect for me to view. I am about to purchase a high end car and was thinking of offsetting some of the monthly costs. Was thinking just 2-3 days a month, $170 turo per day rate, I am very close to airport and only 10 minutes from downtown. In my case still a bad idea?
I've been in my own business for almost 25 years and my spider senses said it was total bullshit but you're thorough analysis was spot-on.Whenever you start a new business you ideally need to have no price competition. In a perverse way the company was acting as arbiters of your price due to them moving the goalposts constantly. in the old days you'd start a business where there was tons of profit and overtime got whittled down. By then you had some sort of market share and more efficient enough to continue operating. Seems like the turo idea was half-baked to begin with.
Eh, it was a reasonable thing to try given we knew we weren't going to get rich... It was more of a "hey, let's see if we can get cool cars for free by renting them out..."
i feel like it would be easy to just have a fleet of prius' , and cut out the middle man. can charge $180-220 a week. provide their own insurance or you provide it..
The longer i watch this video. I see the real reason why he made this video comes out. Renter damaged his car and he didn’t get compensated for it for whatever reason
@@1keykneedeep look at enterprise, hertz, etc. They are very successful and it's not because they are renting corvettes and jaguars. You need cars with low depreciation, easy rentals to maximize profits. The cars he chose are a select and being in Texas, where people aren't really car nuts, his cars were a wrong choice. He would've done better renting lifted trucks and trailers.
you messed up when you went higher end lol you messed up again when you got cars you needed payments on to win that game get cars the regular worker would drive and charge prices regular people can pay you weren't in this for the business though, you were in it to get some cars you wanted paid for by others
Right I checked the turo market where I live and regular chevy's and jeeps get the most trips. Plus it matches and is below the normal rental car market.
Great information. However, another thing he failed to mention that everyone thinking of financing a car and then renting(Ridesharing ) it should know is this: Due to the accelerated depreciation of these cars from all the miles. Most banks do not allow ridesharing or rental of the cars. So If you are caught they can call the note or repo the car and still charge you because you are in default of your contract agreement. So ask the dealer to confirm whether our not your contract is in jeopardy if you use it for this type of business. The contract usually has the disclaimer in the language. So read it carefully!!!!
Keep making scare videos like this, it'll weed out those who don't know how to run a business. I know someone with a fleet of 13-17 cars at any time and they have been making 200K+ a year for the last 3 years. Gotta know the secrets
You do make some valid points here and all of what you are saying are definitely significant risks and expense centers that every host should take into consideration. I do wonder though if you and your partners have analyzed how large hosts with higher-end cars (maybe even hosts in your city) who have made significant profits from Turo run their businesses and what makes their processes profitable and your's not. Based on your description of what you guys researched before jumping in, it seems like you guys mainly performed your analysis and business planning based on what you guys assumed are the key points to consider, and not what is actually profitable for others and what successful hosts hone in on. Most of the time obvious metrics that anyone can analyze and derive doesn't result in success. Even if a company can guarantee 100% turnover on their inventory in 3 months, 3 months of stored inventory might cost twice as much as gross profits and make a successful product fail. To solve this you wouldn't be able to sell more, and would instead need to control other aspects of your operations and find solutions there. For example, while utilization is a key revenue driver for a car rental business, high utilization also results in higher usage and a higher probability for accidents. Given this, have you guys tried to set up dynamic pricing and mileage usage limits that provide distance flexibility at a higher price point for short term rentals while restricting mileage significantly for longer bookings at a significant daily rate discount? Also, to account for the Turo fees, have you tried to switch to the basic plan and request proof of insurance from your renters so that any damages from a rental period will be taken up directly with your renter's insurance and skip Turo altogether, and thereby saving you the $3k in deductible per incident and an additional 15% in gross revenue per booking after fees? Sorry for the long message, but I think that while you guys went into this with good analysis and a clear initial plan of action, it doesn't seem like you guys then adapted your strategy iteratively to how Turo actually works in reality and the creative workarounds, and how to make actually make profits in the long term when competition picks up. It seems like you guys kept to your guns and tried to fit a square peg in a round hole. Sure, profits are easy when something is new and it's not the standard. If you are lucky and ride the right wave anyone can be rich (see Bitcoin). However, just like every regular industry, competition picks up and you have to adapt to the new ways of making money instead of automatically assuming it's a race to the bottom. Amazon didn't try to beat Walmart by being the cheapest retailer out there and race to the bottom in an industry where the profit margin on sales is less than 0.5%. Instead, they figured out what they can offer and what Walmart didn't and end up creating enough competitive advantage to have a permanent headstart on all future endeavors. Just my 2 cents. Thank you for the great content and thought I would also spend some time to respond intelligently.
@@normalguysupercar lol no problem. I know its long but your points definitely got my wheel turning and my consulting background took hold of my keyboard xD
If you drive right cars, you can make pretty good money on Uber. Problem is people don't drive right cars for Uber. Small hatchback or Hybrid that is 5 to 6ears old is best option.
@@normalguysupercar Brother I love the content and appreciate the upload but chai guy has a point, The only benefit I see to using "someone else's money" is if you're guaranteeing a higher return rate with your own money elsewhere, Or else it'll just be fees + interest on top of liability
Jesus Ortiz right or if your gonna flip it fast and essentially just pay it right back and keep your cut, move on to the next flip quick Real Stupid money move You can’t walk away without paying it back or doing fraud or something illegal to get out of the loan or do a real dick move like filing for bankruptcy as an llc but you have an exotic cars...so you can’t be broke...
Normal Guy Supercar No. You have not quantified risk. You cannot simply walk away. Banks, like casinos, always win. And the assumption that one can “flip” a financed item was tested in 2008. Failed.
Thank You for confirming what went through my head a few years ago when I looked for a car rental and I ran into Truro. At first, I was intrigued, but I thought about it and all the things you brought up came to mind, including the fact that the customer can be accused of abusing the car when in fact they didn't. I never took the plunge, and I liken it to the Uber guys without support and all the expense.
I love all the comments of people with all the right answers! If this is you, please add a link to your channel that shows your killin it with everything you do!
