{"id":11947,"date":"2019-02-11T11:14:36","date_gmt":"2019-02-11T19:14:36","guid":{"rendered":"https:\/\/turo.com\/blog\/?p=11947"},"modified":"2025-03-24T06:08:20","modified_gmt":"2025-03-24T13:08:20","slug":"scaling","status":"publish","type":"post","link":"https:\/\/turo.com\/blog\/community\/scaling\/","title":{"rendered":"Scaling your Turo investment"},"content":{"rendered":"

How to be a smart entrepreneur on Turo <\/span><\/h2>\n

Owning a car is notoriously expensive. Fortunately, our peer-to-peer car sharing community offers a unique opportunity for car owners to offset some of the costs of car ownership and sometimes even take home a little extra profit. In 2018, a car shared on Turo earned hosts an average of about $522 per month. While these earnings and the earning potential of various cars inputted into our <\/span>new Carculator tool<\/span><\/a> may seem lucrative, there are a few things to keep in mind as you seek to expand your car sharing endeavors.<\/span><\/p>\n

1. Take it slow <\/span><\/h3>\n

Like any investment, you should do your due diligence and test the waters before you take a plunge. According to Bloomberg, about 80% of entrepreneurs who start businesses fail within the first 18 months. Unless you\u2019ve had experience managing large fleets of vehicles, there are so many nuances of peer-to-peer car sharing to learn. Before you take on new debt or make a large investment, you\u2019ll need to understand what the demand is like in your area year-round and have a plan in place to weather seasonality as well as cars that could be sidelined due to claims or manufacturer recalls. Corporate-owned fleets have the luxury of tax breaks and scaled operations that make it easy for them to \u201cin-fleet\u201d quickly when business is booming and \u201cde-fleet\u201d when things slow down. What might be perfectly manageable for hosts sharing cars at a small scale is not likely to be realistic for individuals on a larger scale. <\/span><\/p>\n

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\u201cMarkets widely vary across the country. So know your market and what cars are the best. Be tactical and wise in your business decisions.\u201d – <\/span><\/i>Chad M<\/span><\/i><\/a>.<\/span><\/i><\/p>\n<\/blockquote>\n

2. Car sharing isn\u2019t a \u201cget rich quick\u201d scheme <\/span><\/h3>\n

Cars are expensive assets not only to acquire but also to maintain. When you share your car at the higher volumes required to potentially turn a profit, your car\u2019s depreciation and frequency of both preventative maintenance and repairs increase exponentially. On a more regular basis, keeping the cars in good cosmetic condition means more regular cleanings that have their own costs besides just your time. <\/span><\/p>\n

As a host, your guests are your customers and require just as much time and attention as the car or cars you\u2019re sharing with them. When guests book a car on Turo, they\u2019re booking with a local host rather than a generic corporation. While you may have figured out ways to automate your hosting responsibilities (<\/span>like Turo Go<\/span>), there\u2019s no such thing as completely hands-off hosting. Once you think you\u2019ve hit your stride keeping up with your cars and providing your guests with five-star experiences, you\u2019ll also have to reconsider where and how you operate, too. Your scaled operation may not work the same way as your single daily driver parked on the street would. More often than not, you can\u2019t practically or legally leave numerous cars strewn around the street outside your house when you are using them for commercial purposes, unlike personal use; you\u2019ll need to find appropriate (and legal) solutions to housing your Turo operations. Being a good neighbor isn\u2019t just good business, it\u2019s also Turo <\/span>policy<\/span><\/a>. <\/span><\/p>\n

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\u201cTreat this like a real business. NEVER underestimate the importance of giving superior customer service with every trip.\u201d – <\/span><\/i>Bill H.<\/a><\/span><\/i><\/p>\n

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\u201cStart slow and build asset wealth, pay off cars and own a good percentage of your fleet. As you add a car that you can buy cash add a car that you might finance.\u201d – <\/span><\/i>Ryan L.<\/span><\/i><\/a><\/p>\n<\/blockquote>\n

3.  All that glitters is not gold  <\/span><\/h3>\n

Leasing a brand new car is not a low-risk and high-return method for profitable car sharing either. Your lease or gap insurance may not allow for car sharing and will likely have steep penalties for mileage overages, early termination, and even the most basic wear and tear. Even if your car has been financed, similar terms prohibiting your car from being used for commercial purposes, as well as other hidden fees such as prepayment penalties, may still apply. <\/span><\/p>\n

The good news is that it\u2019s not just the brand new cars that have high earning potential on Turo. In fact, less than about 5% of all Turo searches in the last year filtered for cars of a particular year. Your best return on investment most likely will be a car that is a couple years old and that you\u2019ve bought outright. When you purchase a car with all cash, you have some equity in the car which will be a huge benefit if you decide to scale down or re-strategize your operation or when a claim pops up that might sideline trips while repairs are made. <\/span><\/p>\n

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\u201cDon\u2019t go into a dealer and buy whatever you can get approved on. You really have to do your homework and have an exit strategy in case something happens. Best bet is to buy something cash that\u2019s on the economy side. You can then try out your logistics and what Turo life has to offer. It\u2019s not for everyone!\u201d – <\/span><\/i>Eric K.<\/a><\/span><\/i><\/p>\n

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\u201cInvest in cash cars and avoid financing if possible until you have a good system in place and your cash cars can “carry” your financed cars if they fail, OR vice versa.\u201d – <\/span><\/i>Michael M.<\/span><\/i><\/a><\/p>\n<\/blockquote>\n

4. Accidents can and will happen <\/span><\/h3>\n

Just as the frequency of repairs and preventative maintenance increases with the frequency with which you share your car, so does the probability of damages. Most damages will be covered by the protection plan you select for your car, however, deductibles and damage covered vary, and thus could add up and should absolutely be accounted for in your plan. Additionally, only our Premium vehicle protection plan covers your loss of potential earnings while your car is undergoing any repairs. <\/span><\/p>\n

While not common, your car may also be at a higher risk of being rendered a total loss, too. In these instances, Turo will only compensate you for the Actual Cash Value (\u201cACV\u201d) of your car and not the amount you owe on your lease or loan. Paying for Guaranteed Auto Protection (\u201cGAP\u201d) insurance might close the \u201cgap\u201d  between the ACV of your car and the balance you still owe if you do find yourself upside down. However, you\u2019ll need to read the fine print before you sign because some policies could be voided if you share your car. <\/span><\/p>\n

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\u201cBe safe and find out what your car\u2019s Actual Cash Value is, so if it gets wrecked or stolen, you won\u2019t be negative. Realize bad things will happen to it\u2026\u201d – <\/span><\/i>Adam B.<\/a><\/span><\/i><\/p>\n<\/blockquote>\n

5. Don\u2019t get in over your head <\/span><\/h3>\n

In behavioral economics, this concept is known as the \u201csunk cost fallacy\u201d in which we continue to invest in something because we\u2019ve already put forth a \u201csunk\u201d cost upfront. When we\u2019ve already put forth the time, energy, and money into something. we want to make it work \u2014 but at what additional cost? <\/span><\/p>\n

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\u201cEmployment is still up and inflation low, but that could change, and it’s better to have cash than debt for the next couple of years.\u201d – Bill J.<\/span><\/i><\/p>\n

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\u201cHave fun! Driving around fun cars and meeting great people is a heck of a lot more fun than sitting at a desk all day.\u201d – <\/span><\/i>Ade B.<\/a><\/span><\/i><\/p>\n<\/blockquote>\n

Sharing your car is a great way to offset the cost and maybe earn a little extra money but it\u2019s not a silver bullet towards financial freedom. We\u2019re constantly inspired by the clever entrepreneurs who make the Turo community innovative and dynamic, but we urge all hosts to make smart and sustainable choices as they scale their car sharing operations.<\/span><\/p>\n

Want to hear from more hosts that have successfully scaled?<\/span><\/h3>\n
Join Turo Talk<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

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