Our Car Rental Business Wrecked Our Finances 

Which one of the biggest went bankrupt not that long ago

If you can pay cash for the cars and not have debt it 'might' be a viable gig... Right now, I do uber on the side with a fully paid off car and put a lot of miles on my car and it is worth it when it is busy (holidays, summer tourist season). In 2020 I made like 20k in two months of doing Uber full time in the area I live. The country was closed due to COVID but in northwest Florida we were open and a lot of people were coming here to vacation. It's all about the timing and watching the market for when it's a good time to do the job. These folks didn't do that... Rental companies has caught up with demand and used car prices finally went back down somewhat.

Worked well for Uber. I rarely see taxi cabs anymore except downtown and the airports

turo is best for people not wanting to put a deposit down or get hassled with a bunch of additional services from a big box company

@@bangladeshirealtor Do you mean customers flying under the radar?

you can put anything on RU-vid for views and not be held accountable when idiots follow it. Crazy!

@@ChrisMFlorida the Donald Trump playbook!

​@@ChrisMFloridawhy is that crazy? It's nothing new. People also need to be accountable for their own actions.

@@cutehumor What a stupid comment

no , they just have to learn how to file a claim properly with Turo . they will pay off the loan for a wrecked vehicle .

And it sounds like they didn't understand how the insurance works. If you have a personal auto policy (which it sounds like she did) your insurance won't cover you for renting out your vehicle for someone else to use because that is in the policy terms. You have to hope the renter has insurance or buys the damage coverage from El Turo.

So what you're saying is Uber drivers are not employed? 🤯

@@kratostomatoes8587 nope, they’re independent contractors.

Exactly, Toro owns the business, you're just lending them a car. 😆🤦

@@kratostomatoes8587 ...self employed...that's just owning a job...quite different from an independently functional business entity...

He's a bum if everyone followed his rules then no businesses would grow

Exactly… I use Turo and my cars are paid off. Loans are risky and can get people into bankruptcy real quick.

This issue is apparent...they said they were doing great at first, but then one little hiccup and they are putting everything on credit cards...it sounds like the spent all the money they were making to YOLO, instead of putting it back into reserves...

It’s rough to take the AirBnB business model to a depreciating asset. At least real estate goes up

@@drtij_dzienzliability. There’s nothing about cars that make them assets unless they’re highly collectible.

@@myyt3824 my car is over 10 years old, it’s still worth about $9k. That’s less than what I paid for it. But an asset is anything you can sell for money. This one just gets less valuable over time, i.e. bad investment

this is why i stay away from credit cards

Like an alcoholic or addict relapsing

For people with a paid off car, house & stable. So net worth millionaires, yes.

I love using Turo but my cars are paid off.

Reason Uber doesn’t own a single car, minimizing their risks attached to depreciating asset

Ah ha, commented after her story before John confronted her on it.

as it does in these get rich easy schemes. ????? In 2009, $250K homes in my neighborhood were sold for ~$50-$80K, people bought in bundles of 5, They are now selling for $400K+.

@@aolvaar8792 14 years later

This is classic psychology. It’s called distancing

She can’t breathe

🤣

Me too! Lol😂

LOL

I did too!!!

Love you, Vicki! Great comment

I was wondering something similar. I heard that they have three Turo cars that are financed, and two personal vehicles that are paid for ? It seems they could sell the two personal cars and pay off a Turo car. Then sell the paid off Turo car and keep going until all are paid off....this should be fairly simple/quick unless I'm missing something.

Ya, they can't afford 2 personal cars anymore. They need to balance sharing one vehicle between them until this debt is cleared.

Yup, the 3 car loans total 87k and their value is 52k so underwater by 35k. Would be nice if this Ramsey show lived up to its supposed image of helping people get out of debt and they would actually ask how much the two personal cars are worth. But surely selling those should certainly be a good first step to getting rid of at least one or two of the turo car loans. This show has to be preachy instead. @@Minimalist-Lifestyle

same when your rent your second house....your not suppose to legally rent it out.... you have to live thier!

If they financed through an auto dealership, they (dealership) may have had a program for Turo buyers.

Easiest way is to not open up that risk. John had it right. They put it all on black and it popped up red.

When the interest rates rise the music stops.

SO what. He is not right all the time.

This is an example of sample bias. Obviously the successful ones don't call the show. If you ask a cancer doctor, 100% of their patients have cancer.

@@jimmymcgill6778 ok 😂..I never said he was, but I do know he has helped millions of people and I’d trust his advice over the advice of the instagram “good debt gurus”…But you do you Jimmy..

RIGHT?! This isn’t shocking at all

Kindercare does have admins . My kids would never step foot in one but they absolutely do

When? Husband is out of town regularly and she has 3 young children

@@donc6781good opportunity for a side hustle. Switch from Turo to Uber on occasion when Dad is home.

😂😂 I looked up and read the pros and cons of Turo and vowed to never rent through them.

😂😂😂😂😂 I’m cracking up

I have a few cars that I paid around $6000 each for. I have grossed more than $20000 on each in less than 2 years. Only 1 had a major repair. You can make money but you have to do it right. If you run 20 cars with this kind of margin and no debt, you can do fairly well. I keep the cars parked near my home and I do on the spot quick detail and 10000 mile oil changes. Turn and burn. It’s ruthless.

She didn’t say how young her kids are. She also can’t stop working whenever she needs to, to take care of kids, if she is working for a different employer. She’s in a tough position with 3 kids and no help.

@@taras4352 good point

That's not true. But if it was as easy to make money as tiktok would suggest, everyone would be doing it. I know folks doing it as a profession, It's a hustle

I got a van and thought I would make money moving people. After doing this a few times I new this was a wrong thing to do I did pay cash for the van. I sold it 4 years later and now drive a small car.

Sounds like something to share with your therapist.

I noticed she kept saying “I “, as well

This is a fantastic idea!

Maybe daycare for three kids would eat up all of the income she would make. My sister pays $850 a month for three days a week of daycare for her one year old.

@@VS-fo9py I guarantee the person you were responding to is single with no kids or has a child that doesn’t live with him.

@@VS-fo9py Lots of remote jobs out there.

​@@VS-fo9pyIf the kids are in school and there is subsidized after school care ("Boys and Girls Clubs") she can meet the income threshhold by qualifying with her income alone. A lot of working moms I knew when my son was in elementary school filled out the forms with only their income(s) listed so that their kids would qualify for the free program (California).

A lender will require you to personally guarantee the note. Lenders are not stupid.

@@Fred2-123 The lender will want some form of collateral, usually in the form of business assets. Yeah, by the time you are able to get a loan through a bank you have run your business for a while and shown profitability or have a business that has a piece of collateral. The mistake most people make in business is using their own money to keep it afloat when it becomes pretty clear the business is failing. Hopium is a powerful thing.

They will be upside down on them when the market is flooded with inventory.

No it won’t it is hardly any homes most will become rentals. The percent of homes bought to airbnb at high leverage is very small. Instead of blame politicians who don’t allow building and have too many regulations they get the media to shift the blame. Maybe in a few over saturated markets but it is not much. Tik tol isn’t real.

An RE crash isn’t happening. 40% of all homes are paid off, and the vast majority of other have record low rates…paying $4.3k/M for a $1,00,000 home. Real estate won’t have inventory unless rates drop to record low agains…and even then buyers will be in mass over sellers. People even thought 2020/21 was a gonna be bad time for RE because prices were high and rates were low, causing a LOT of inventory since everyone could sell over asking.

@@mr.isaiah1275 Just ignore everything that's right in front of your face. Go pull up Airbnb in your area and see how many there are. Now go pull up Zillow and see how many houses are for sale. When the Airbnb bubble pops it will be a glorious crash.

Probably won't crash, unlike Turro with Airbnb the underlying asset increases in value giving owners flexibility when they don't rent, there's also a scarcity of houses compared to an abundance of cars.

Or they can just keep renting the cars even if it's at a loss? Let's say their car payment combined is 1,200 a month and they can continue to net 900 a month renting them they're only losing 300 a month which is probably less than any kind of loan they'd get on the difference by selling. Plus maybe they'd get lucky and have a couple good months where they profit. A lot of businesses lose money until they're actually profitable that's just how it works sometimes especially if you're leveraging debt.

@@dedalliance1 So they continue losing money instead of stop losing money, on a hope and a wish that the business miraculously comes back as the economy heads into a recession? It's that kind of thinking that gets people into these types of situations. Sunk cost fallacy.

@@Julian-zc9vm I added up the numbers. They owe $87,000 in vehicle debt, and those vehicles are worth $51,000 so that means if they liquidate now they're already losing $36,000. Lets say the 87k they owe is all on 5 year terms to make math simple, at 7% interest that means monthly payments are gonna be about $1,700. Lets say they can get $1,400 a month net renting them out still, so they'd have to personally cover the 300 extra. They'd get out in 5 years and end up paying $18,000 in those 5 years at 300 a month. Which means losing half as much as liquidating them at a $36,000 dollar loss. Now obviously there's risks doing that with maintenance stuff. But they'd also get the learning experience and if they're smart they'd actually probably be able to turn a profit down the road, if nothing else maybe a couple peak months they'd make some money to pay off the debts faster and spend less than the 18k of their own money.

With their current income to debt ratio, it seems doubtful they would qualify. Selling the cars, "closing" the "business," and taking a reduced loss seems like a better idea. 😕

3 kids at a good day care is very expensive - so not really worth unless she can make 6 figures

@donc6781 some people, when they discover what daycare for 1 child cost, stop having kids until they make more money to afford the cost. Either that or stop increasing expenses when your income isn't enough to pay for them. I guess people are having kids so the kids can take care of them in their old age.

Yes, John loves to hear himself talk.

😂

Hehehe i got sad when she said 3 kids. Debt is a curse word with my parents. Times were tough some years but now I don’t have to worry for a moment about their financial situation. Just their health.

Chef's don't make a lot, unless you own the business.

Not all jobs are the same. It could be 2 part time jobs he's working or one full time and a smaller job that's only 10 hrs extra per week.

Right, the even smiles and laughs while she's talking about how financially screwed her life is right now...