Want to make serious money renting cars on Turo? Here’s how many cars you’ll need and what to expect.
Turo, aka the Airbnb of the car rental world, allows anyone with a car (or fleet of cars) to rent out their vehicles through the Turo App.
Embed from Getty ImagesWith available third party insurance, Turo makes it that much easier to rent out cars from the comfort of your own home.
But, what if you wanted to make some serious money with Turo, at least bringing in six figures a year?
Not only is it possible, there are several Turo renters around the United States that do exactly that.
Of course, like all money making ventures, it’s not going to be easy, but you already know that.
Revenue aside, costs will include annual maintenance, consumables, insurance, registration, and for the inevitable accidents.
And just when you’ve accounted for all costs, you can’t forget Uncle Sam who will swoop in April to collect a percentage of your earnings, if all your earnings are Turo, that’s a self-employed tax rate of 15.3%.
Oh, and don’t forget state taxes.
On top of that, it’s going to take you your own time and energy to make sure the cars are ready for renters.
This blog post is just an estimate and is, by no means, an expert guide.
First, I’m going to choose an example home market, then run through the costs for the low and high end of that home market.
Then, I’m going to go through the estimated range of earnings for that low and high-end car.
After that, I’ll estimate a good mix of low and high-end cars, accounting for all the costs, that will deliver on that magical $100,000 annual profit target.
Annual Insurance, maintenance, repairs, and registration
First, only cars 12 years or newer are eligible to list on Turo.
Our example home market will be the Bay Area, California.
Generally, cars on Turo fall into two categories, your low-risk-low-reward earners like crossovers and sedans, and your high end earners like large SUVs, luxury cars, and sports cars.
With that in mind, for illustrative purposes, we’re only going to go with the obvious, reliable choices like Honda, Toyota, Acura, Lexus, and we’ll throw in a Lincoln Navigator just for good measure since that one’s a high earner.
I will choose a 2016 Toyota Camry as our default car.
According to Edmunds.com’s five-year cost of ownership calculator, you can expect to pay, on average,
- Insurance- $1,440/year
- Maintenance- $990/year
- Repairs- $570/year
- 1st year registration- $1,000/for first year
And, I’ll choose a 2015 Lincoln Navigator as our high-earner again, using Edmunds five year cost of ownership calculator for our estimates.
- Insurance- $1,640/year
- Maintenance- $1,949/year
- Repairs- $1,869/year
- 1st year registration- $2,927/ for first year
For our example, costs for your fleet of regular cars and high-earners will cost you between $4,000-8400 a year per vehicle.
Average annual earnings for each car
Turo has a calculator anyone can use to determine, based on the market and car, how much you can expect to earn before you factor in costs.
Turo’s calculator is linked here.
I’m also going to assume the average annual earnings listed has the average Turo-provided insurance cost rolled into it, too.
In the San Francisco Bay Area region, our default car, a Toyota Camry, brings in $8,091 a year.
Embed from Getty ImagesMinus costs listed above, and Camrys make about $4,000 a year in profit.
Our high earner example, a Lincoln Navigator, brings in considerably more, $32,354, on average.
Embed from Getty ImagesMinus costs, and Navigators bring in $24,354 in profit a year.
Considering the amount of high-end customers needing a luxury car to drive around themselves, their friends, and clients, our Navigator example makes sense.
What mix of cars to bring in that $100,000 of profit a year?
For the sake of this blog post, let’s say you want to take federal and state taxes into consideration.
Turo earnings are self-employed earnings, so you’ll be taxed at 15.3 percent on the federal level and $2,695.19 plus 9.3% of the amount over $61,214 for California state taxes.
That means, if you want to take home six figures in profit, the magic total revenue number is $130,000.
Now, for that mix of cars.
You could, of course, choose all high-earners and, to reach that $100,000-$130,000 magic number in pure profit, you could rent high budget vehicles like Navigators, Escalades, Corvettes, and Tesla Model Ys.
You’d only need between 4-5 high-earner vehicles.
The drawbacks are a high initial cost and higher repair costs when something inevitably goes wrong.
To mitigate your risk, you could mix in several regular cars like our Camry, some Corollas, Civics, and Accords etc.
The drawbacks are, since they are lower earners, you’ll need to rent between 5-6 cars to equal the earnings of one high-end vehicle.
This is, of course, is all not taking into account the purchase price of the vehicles.
If you are starting from scratch, depending on what you buy, expect to not make a profit for at least two to three years.
But, let’s assume you’ve stuck it out for those two to three years and are now in the black.
If you want to diversify your fleet, going for five regular cars and four high earners, that mix can get you close to that $130,000 annual profit or, after taxes, at least $100,000.
That could look something like
- 3 Toyota Camrys
- 2 Honda Accords
- 2 Lincoln Navigators
- 2 Cadillac Escalades
This example also assumes you have a place large enough for at least nine cars.
If you need extra parking space, you’re going to have to take that added cost into consideration.
Conclusion
Making six figures in profit on Turo is not impossible, but, as my example shows, it takes a lot of cars and hard work.
If you actually want to rent cars on Turo full-time, I’d suggest, like many actual Turo renters suggest, to try your luck with one or two cars to get a feel for the market and the work involved.
Then, if you feel you’re ready to pull the trigger on several cars to bring in more revenue, you won’t be blindsided by all the costs that pile up.
The rewards are you’ll be taking in a decent chunk of change, will be your own boss, and are in an industry there’s always demand for.
And, as you get to know your cars, start to do your own repairs, and learn the tricks of the trade, your costs should go down, meaning more profit.
Turo, it can be a side hustle with a car you own or a serious full-time job.
