Turo has taken the wildly successful concept of Airbnb and applied it to car rentals. Rather than hosting your home or investment property, you can let people use your car. Turo is an excellent way to generate side income if you have a second vehicle that you rarely rely on or a primary auto that’s often parked. Much like Airbnb, Turo has even inspired some ambitious parties to consider making big ticket purchases to increase their appeal. With its impressive earning potential and the fact that virtually no work is required, Turo’s definitely worth looking into. But how much money can you make on the Turo app? Moreover, is buying a new car specifically for Turo guaranteed to provide decent returns?
As with other opportunities that have arisen in an increasingly gig-oriented economy, Turo doesn’t boast the same earning potential for all people across all locations. To start, you have to have the right type of car for Turo. Some models see far higher levels of demand than others, and some models consistently command higher rental prices. People will pay more to rent a flashy sports car or a brand new Tesla than they will to rent a low-thrills economy car that’s entirely gas-powered and lacking all of the latest and most innovative features.
Location definitely matters. Although Turo isn’t a standard car rental company, it largely services the same market. You may have a harder time finding a steady stream of paying customers if your local market is already saturated with conventional car rental companies, and if these companies offer highly competitive rental rates. If you live in a sparsely populated area that doesn’t get a ton of tourists, your Turo rentals might be too few and far between to justify even a modest new car payment.
One thing that Turo does that conventional car rental companies do not is serve renters who lack major credit cards. Car rental companies that do accept debit cards or cash as alternative payment methods often charge excessive deposits or require customers to present round-trip airline tickets with departure dates that match their car rental periods. The cost of renting a car, truck, SUV, or crossover on Turo is also about 25 percent lower than the cost of renting from a rental company. These things make Turo a more accessible and affordable choice for many people, and they’re well-worth considering when determining whether or not your local market is already saturated.
Using Turo as a host isn’t free. The daily rental rate that you charge won’t be what goes into your pocket. For instance, people who charge $50 per day for their Turo rentals often walk away with just $30 after Turo all fees and other charges have been deducted. If you plan on buying a new or certified pre-owned vehicle specifically for Turo, you’ll want to both track and anticipate your overhead costs. Investing in a good personal finance software before getting started can help.
Turo makes it easy for interested hosts to gain some insight into their profit potential ahead of signing up. You can use the Turo Earnings Calculator to decide whether this is a worthwhile venture for your. Although you can set your rental prices completely on your own, this calculator will reveal your ideal daily rate based upon factors like:
- Your location
- Ease of vehicle pick-ups and drop-offs
- The make, model, trim, and age of your auto
- Any special features or accessories that your vehicle includes
- The number and types of other Turo vehicles in your region
If you like the price that the Turo Earnings Calculator provides, you can set this as your standard, daily rental rate by turning on the Automatic Pricing feature in the Turo app. If you prefer to establish your own rate, the minimum price that you can set is $10 per day. According to one operations manager from Hertz, the average Turo host makes about $545 a month.
One of the most important things to remember when using Turo is that your take-home will represent between 65 and 90 percent of your charges. The remainder of the money you make will be claimed by Turo and used in part to cover the costs of roadside assistance, auto coverage, marketing, and customer service.
If you’re already making payments on a vehicle that you aren’t constantly dependent upon, becoming a Turo host could be a great way to offset your spending and even earn a little additional cash. However, if you’re thinking about buying a vehicle specifically for Turo rentals, you may find that your monthly take-home is equal to or less than your combined car payment and insurance. Even Turo asserts that the best way to optimize your return on investment is by purchasing a vehicle at a heavily discounted price. Although $545 is lower than what some Turo hosts are bringing in each month, many top-earners on this platform report monthly averages that top out at about $1,000.
About the Author:
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He’s been featured on The Consults Corner on TAE Radio, The Writing Biz, What’s Your Story, and more. He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom.