Can you make money with Turo?
What is Turo?
Turo is essentially Airbnb for your car: you can list your car on a marketplace for others to rent. Turo takes a cut of your earnings as a host in order to provide insurance and customer service. Depending on what level of insurance coverage you want, you can increase or decrease your cut of the renter’s payment.
How do you get paid with Turo?
As a host, you set the daily going rate for your car. A 2006 Honda Civic won’t go for the same price as a Porsche 911, just as a simple studio apartment won’t get rented for the same price as a fancy mansion on Airbnb. After a renter completes their trip, you’ll get anywhere from 65% to 90% of the earnings, the remainder going to Turo. The app holds your funds until you add a bank account, which it will push the money to almost right away (this might take up 3 business days). You can also charge your customers for “Extras” such as prepaid gas and allowing unlimited miles. Also, things that make sense given the local environment will do well such as snowboards or skis in Colorado, beach equipment in Malibu, etc.
You can also charge for when users go over the allotted amount of miles that you’ve set. If someone smoked in your car, you can charge a cleaning fee. Additionally, you can charge for delivering your vehicle to the customer.
As you can see, the options for monetization are plentiful with Turo.
What are the costs of Turo?
If you’ve made it this far, you’re probably thinking, “Where can I sign up? I’m ready to get rich off of my Prius!” Before you quit your job, you should know the heavy costs of running a car rental operation.
Renting your car out will rack up the miles on your vehicle pretty quickly. Your vehicle has a theoretical dollar cost per mile, which you can estimate here. The trick with Turo is to be sure that the profit you make from renting the car exceeds the cost per mile by a decent margin (there are other costs to cover, too!). Otherwise, when you go to sell your vehicle, you might sell at a loss.
Wear and tear
All those extra miles means more regular maintenance on the vehicle. New brakes, oil changes, new tires, and car washes will all need to happen more regularly. There’s also the small cosmetic damage that might go unnoticed at first but accumulates over time that will devalue the car. Here are some tips:
- Take advantage of Turo Car Care
- Get a car wash subscription
- Learn how to do maintain your car yourself
If you’re purchasing a care solely to rent on Turo, you have payments to make! Leasing a vehicle is tricky depending on your contract. If you go over your mileage count, you could incur a hefty fee from the dealer. You might also be fined for turning the lease in early to avoid going over the mileage limit. Check your lease terms and conditions.
If you took out a car loan, your monthly payments are probably higher, so be sure the car can at least pay for itself. Buying a car outright means your business is in the hole from the get-go, so how long will it take for your rentals to recoup those funds?
Last but not least, you’ll need personal insurance for your vehicle. If you’ve got a great driving record, the rate shouldn’t be too bad. While on trips, Turo’s insurance covers your car, so any damage incurred on the trip by your guest won’t come into contact with your personal insurance.
Managing cars takes time. They need to go to the shop and they need car washes. On top of that, if you aren’t doing remote key hand-offs, you’re spending time meeting your guests who will inevitably be late on occasion.
Since you’re making a business out of Turo, all these expenses are tax-deductible which can really improve your profit margins. Keep the receipts and mark the miles because they will all add up to some great savings come tax season!
Can you actually make money renting your car on Turo?
The short answer is yes, you can make money by renting your car on Turo. It all comes down to your ability to get a car a great price that is in demand. Buying cars from auctions, if you can get into one, will typically get you the best price on a used vehicle. You’ll need to do some math based on the factors I’ve mentioned here to see if it’s a viable business. To replace a full-time job, you’ll need at least 10 cars listed on Turo that are renting decently. There’s a lot of people doing this, so it’s definitely a profitable business model.
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