Turo is a popular peer-to-peer carsharing platform that many people are turning to for a successful side hustle. Similar to most side hustles, it takes a lot of effort and knowledge to know how to successfully start your Turo business. I have thought many times about expanding my own fleet to try and reach a six-figure business. When it is done right, it is possible for it to be a replacement income for your 9-5.
Hosting on Turo as a full-time job is possible by buying the right cars, reducing expenses, and getting positive reviews. The best way to start earning a full-time income is by renting out your own personal car on Turo, followed by purchasing several used cars that have already hit their depreciation point.
If you are looking for a shift in your career and are looking to be more in control of your own schedule, running a Turo fleet may be perfect for you. Below we will cover if it’s not only possible but worth it to host on Turo full-time.
Buy Used, Not New
Your first thought when it comes to finding the best Turo car may be to go and buy a brand-new one that stands out from the rest of the cars on the road. But hold off on buying anything new for the Turo platform until we talk about depreciation, car payments, and how much you want to scale.
Turo hosts on average earn more than $10,000 annually per vehicle. After looking at how much income you need to sustain your lifestyle, you can see how many cars you will need. However, this does not factor in expenses, car payments, and Turo fees making the profitability lower than $10,000. Because of this, you will want to pay off your car as fast as possible and the best way to do that is with cars that are $5,000-$10,000.
Depreciation
It may be surprising for you to hear me say that buying a car that is several years old will be your best way to be profitable on Turo. You can achieve the quickest ROI, or return on investment, with a used vehicle. If you buy a new vehicle then the longer it takes to make the money back, the longer it takes to make a profit and scale your fleet.
Depreciation for cars begins to plateau usually after 5 years. This means that finding cars that are 5+ years old and around $10,000 is your game plan for your entire fleet. Then, as you start to grow your fleet, you can afford to experiment with a nicer vehicle. Depending on where you live, your market could vary on what is popular. If you want to learn more about what is the best Turo car for you click here.
A good goal for Turo hosts is to make your money back within 18 months of listing your car on Turo. This is ABSOLUTELY possible. Here’s how you can achieve that 18-month goal.
Profitability With Scaling
Profitability, as with any business, is crucial when growing your fleet. There are several factors to consider: 1) Maintenance 2) Turo insurance fees
The average amount of car maintenance annually is…that means in order for you to pocket $80,000 per year, you will need several cars to do so.
Turo fees can account for about 21% of your revenue.
Let’s break down the numbers
Car purchase price = $10,000
Daily rental price on Turo = $50 /day
18 days booked each month = $900 month revenue
Annual Revenue = $10,800
Annual Turo fees and insurance = (~$1,080)
Annual car maintenance (~$1,200)
Annual profit: $10,800 – $1,080 – $1,200 = $8,520
Depending on your daily rental price on Turo, you could break even in about 14 months. After that, it will go solely to profit. Now a big question is should you save up and only buy with cash?
Cash or Leveraging Debt For Turo Cars
I’m a big fan of the book, “Rich Dad, Poor Dad” by Robert Kiyosaki and his philosophy of good debt vs bad debt and letting your assets pay for your liabilities. Does this apply to leveraging debt for cars too?
In my opinion, because loan rates for used cars (especially a private sale) are very high, it is best to pay cash for a car if possible. However, if you were like me and didn’t have a big pile of cash to spend on a Turo fleet, leveraging debt for cars isn’t necessarily bad.
Getting approved for a loan for a $10,000 car with a 10% interest rate could add an additional 2-4 months for you to pay it off. Although this would take longer to pay your car off, it could actually help you scale faster.
Getting multiple cars with loans that could all be paid off in under 2 years gives you a big head start. Once your cars are paid off it is all profit. Alternatively, if you relied on cash to purchase more Turo cars for your fleet, it would take several years to build your fleet big enough to bring in a full-time income.
Fleet Size
Knowing how many cars you need in your fleet is the golden question. According to Turo, hosts earn just over $10,000 annually per car which means you can easily calculate how many cars you need.
1 car = $10,000 revenue annually
2 cars = $20,000 revenue annually
5 cars = $50,000 revenue annually
10 cars = $100,000 revenue annually
and so on.
Turo fees and maintenance can cost about 21% of your revenue. To ensure you have enough to cover those expenses, it’s good practice to keep as much cash as possible for liability. Lowering your maintenance expenses can be done by finding a local mechanic, or learning how to do oil changes and basic routine maintenance yourself. Personally, I do my own oil changes on my cars each time and easily save $50 each time. Luckily, whether you do it yourself or not it can still qualify for tax deductions.
There are also a lot of great tax deductions for a Turo business. Oil, tires, gas, and thanks to Section 179 of the IRC, which you should ask and follow your accountant’s advice, you are able to deduct a large portion of the new vehicles your purchase for Turo.
It’s also good to know what insurance to get. Click here to learn everything you need to know about Turo insurance.
Reviews Are Gold
Reviews are what will make or break your business. It will be hard, but to get as many reviews as possible it will be good to undercut the competition with your price. Dropping your daily rate will help you get booked. With some reviews under your belt you can raise your price back up.
I used this tactic for listing my brand-new Vanderhall on Turo and needed to get reviews as soon as possible. Although it was painful to drop the price much lower than I wanted, it helped me get some very quick 5-star reviews. This year should be a great year now that there are 20+ 5-star reviews.
Most people will look at your profile and bio before booking a car with you. Guests will often filter the search by reviews too.
Well, let’s look at the big picture question…
Can You Make A Living Off Turo?
Yes, it is possible to make a living off of Turo. If you combine enough market research for your city, procure several cars, and get good reviews, you would be able to make a living full-time from Turo. It is best to start with your personal car before buying several other cars since not every car on Turo will do well.
If you want to make a living off of Turo, I would plan on doing many oil changes, tire rotations, deliveries, and guest communication throughout the year. I would also mark off a couple of weeks throughout the year when your car(s) are not available to book in case you want to go out of town.
Buying several used cars for around $10,000 will be a great start to running your Turo business full-time. There are several hosts that rely on Turo for their income because it is absolutely possible.
Are you looking to rent out one car on Turo or go full-time as quickly as possible? Let me know!
