If you are someone who is looking for ways to earn passive income by renting out your car, then you must have come across Turo. But is Turo profitable?
Cars are essential for road trips, running errands, day-to-day life, you name it. But it is not possible for everyone to own one.
As such revolutionary platforms like Turo offers great help to those who need a car while allowing the car owner to make passive income.
If you wish to find out more about this unique platform, as to whether it is safe, worth it, how it works, etc., then you might want to go to the end.
What Is Turo & How Does It Work?
Turo, formerly known as RelayRides, is a car-sharing platform that was founded in June 2010 by Shelby Clark.
Turo is available in 56 countries currently, using which anyone can rent out and hire vehicles for an affordable price.
This unique platform is great for both hosts and renters. So how does Turo work?
So Turo is essentially like Airbnb but for cars. Once you sign up on the platform to be a host, you can easily create listings of your cars.
You can post a picture and set your own prices and timings for which the car can be available.
Renters can view and book your car, and once they do that, you meet them at an agreed location and time to hand over your keys. At the end of the rental, you meet them again and get your car back.
Renters can simply sign up on Turo and start looking for a car to rent out.
Turo is a great option for people who are looking to rent out a vehicle because it is much more affordable than other platforms.
What Are The Requirements To List A Car On Turo?
Turo has different car eligibility requirements based on where you live in.
Here are some common criteria that you must pass in order to list your car on Turo:
- Your car must be less than 12 years old & should be in good condition.
- Your car must have fewer than 130,000 miles.
- Additionally, your car’s title must remain clean and shouldn’t have a salvage or branded title.
- Your vehicle must meet Turo’s registration.
- It should also meet minimum car insurance coverage requirements.
How Much Can You Make On Turo?
The money that you can make on Turo depends upon the type and number of cars you rent, how often you rent them, and the city you live in.
For example, you can charge more for a high-end or luxury car such as Rolls-Royce, Mercedes, etc.
However, most hosts on Turo make between $500 to $1000 per month.
According to the company’s website, here’s how much people earn on Turo on average:
|Number of Cars||Average Annual Income|
How Much does Turo Charge From Hosts?
To offer hosts a platform to rent their cars and make money, Turo charges a fee. The amount you earn for each trip on Turo depends on the type of protection plan you choose.
Turo deducts 10% to 40% from the money earned from each trip based on the type of plan you choose.
Turo has five types of protection plans; let us have a look at them:
|Plan*||60 plan||75 plan||80 plan||85 plan||90 plan|
|Host take||60% of the trip price||75% of the trip price||80% of the trip price||85% of the trip price||90% of the trip price|
|Deductible**(per claim of physical damage to your car)||None||$250||$750||$1,625||$2,500|
|Third-party liability insurance***||$750,000 from Travelers Excess and Surplus Lines Company||$750,000 from Travelers Excess and Surplus Lines Company||$750,000 from Travelers Excess and Surplus Lines Company||$750,000 from Travelers Excess and Surplus Lines Company||$750,000 from Travelers Excess and Surplus Lines Company|
|Replacement Vehicle Reimbursement†||$50/day, 10 day max. In the event of a total loss, the full $500 will be paid. Or the Host may opt for Loss of Hosting Income.||$30/day, 10 day max. In the event of a total loss, the full $300 will be paid.||Not included||Not included||Not included|
|Exterior Wear & Tear†||Turo is responsible for eligible Exterior Wear and Tear||Not included||Not included||Not included||Not included|
|Loss of hosting income†||Turo is responsible for the vehicle’s potential earnings, based on the last 60 days’ average earnings, up to a maximum of 30 days. Or the Host may opt for Replacement Vehicle Reimbursement.||Not included||Not included||Not included||Not included|
Apart from this, there are also some other costs such as young driver fee, security deposit, delivery fee, etc.
As a host you receive:
- 90% of the delivery price.
- 90% of the cost of Extras.
- 100% of approved reimbursements for incidental costs.
This should give you a basic idea of how Turo works. You can check out Turo’s website to read about this in detail.
What Is The Cost Of Renting With Turo?
The make, model, year of car, etc., reflect the price of the vehicle. As a renter, you can expect to pay $60 and $150 per day for a mediocre car.
High-end cars that are only one or two years old cost way more, and you can expect to pay as much as $400 per day for the same.
Although Turo charges way less compared to other rental companies, it does charge a handful of a fee to protect the vehicles of the hosts.
Along with the base fee and a mandatory protection plan, you are also required to pay a trip fee based on a percentage of the price of your excursion.
And that’s not it; you must also pay a young driver fee (if you are below 30 years of age), security deposit, and delivery costs.
You can, of course, avoid the delivery cost if you pick up the car yourself and also the young driver fee if you are above 30 years of age.
After all this, you must also pay taxes as applicable.
Is Turo A Profitable Business?
Even though Turo charges 10% – 40% of the fee per trip, it is still profitable, and hosts make as much as $10,516 annually by renting just one single car on this platform.
By adding newer models of cars or by renting out high-end cars, you can charge as much as $400 per trip and increase your earnings.
The key to making consistent income on Turo is by getting more bookings, listing more vehicles, etc.
Pros & Cons of Using Turo
Pros of Using Turo
- High-profit potential
- Rent multiple cars
- Speedy sign-up process
- Flexibility to set your own price, distance, insurance & other terms
Cons of Using Turo
- Turo’s insurance does not cover a lot.
- Trusting your car with a stranger can be hard.
- Need to clean & refuel the car before each ride.
How To Increase Your Earnings on Turo?
Making more money on Turo boils down to having a strategic plan.
For example, you can charge additional money if you allow guests to book with you on short notice.
Here are some solid tips to increase your earnings on Turo:
- Allow late-night and early-morning pick-up times to charge and earn more than usual.
- Rent out vehicles on weekends and during peak times.
- Allow short trips.
- If you have more cars to spare, rent them out.
- Rent out high-end cars.
Is Turo Worth It?
Whether Turo is worth it or not is dependent on whether you are making money from it or not.
The way Turo works is complicated. In order to make money on Turo, you must take into account the following:
- Number of cars you rent
- Car’s age
- Car’s model
- Insurance cost
- Distance, etc.
The best way to find out if Turo is worth it or not is by adding your car’s maintenance, interest, depreciation, insurance, etc., and dividing that by the number of miles driven.
After this, add your total revenue and divide it by the total number of miles driven. If your cost per mile is more than your revenue per mile, then you are losing money, and if not, then you are profiting
Is Turo Safe?
Turo bears risk but is relatively safe.
For instance, every agreement made on Turo is private between the host and the renter.
The company also protects the host from no-shows. Similarly, mandatory insurance protects the guest in case accidents happen.
Guests can even report hosts if they do not provide clean and hygienic cars. Additionally, if the host does not show up on time or on prior notice, Turo will fine them $150.
Similarly, if the guest cancels the trip, they receive a partial refund.
Looking at all this, it seems that Turo is safe for both the host and the guest.
Is Buying a Car For Turo Worth It?
Now that you know that Turo is profitable, you might be wondering if you should buy a car for renting and make passive income on Turo.
Before taking this decision, there are a few questions that you must ask yourself.
First, how often are you planning to rent out your vehicle? If you are planning to rent out your vehicle only a few times a year, then buying a car does not make sense.
Second, where do you live? If you live in a busy city, then renting cars might allow you to make a consistent income and may be good for you.
Third how much downpayment are you making for your new car, and what is the interest amount?
If you have made a decent amount of downpayment for your car, then your monthly EMI’s won’t be as high, and you will be able to pay off your loan in a shorter duration.
If that is not the case, then you might end up paying a lot of interest over the long term.
So, whether you should buy a new car for rent on Turo depends on your current situation.
Which Cars Make The Most Money On Turo?
Cars that are high in demand list best on Turo.
According to Turo, Fiat 500 is one of the most profitable cars to list. Another list of cars that Turo deems profitable includes:
- Chrysler Voyager
- Kia Rio
- Toyota Yaris
- Kia Forte
- Volkswagen Jetta
- Nissan Versa
These cars are the most profitable because they are affordable to maintain and own. In addition, they also offer lower daily rental costs for renters.
Apart from these, Cars over $30,000 that are most in demand on Turo include:
- Land Rover Defender
- Lincoln Navigator L
- Cadillac Escalade ESV
- Porsche 718 Boxster
- Chevy Corvette
Turo is a beneficial platform for both hosts who are looking to make passive income and for guests who are looking for an affordable car rental platform.
The company has rules and regulations that benefit both parties, and the money one can from
Turo largely depends on a number of factors that we have already discussed in the above article.
We hope you found this article on “Is Turo profitable” helpful.
Can I set distance limits for my car on Turo?
Yes, Turo allows hosts to set distance limits on their cars. So you can either offer unlimited distance to the renter, or you can set a mileage limit.
Most vehicles on Turo have a limit of 200 miles. However, in case you are renting a deluxe car, you can set a lower mileage limit.
What happens when a guest cross the distance limit?
If a guest crosses the distance limit set by you, then you simply need to submit and invoice for the same.
Turo will calculate how much to charge and will reimburse the amount to you.
Is Turo protection plan worth it?
Whether Turo protection plan is worth it or not depends on many factors.
First, you must consider the likelihood of damage occurring during the rental period.
Second, you must weigh the costs of the protection plan against the costs of potential repairs or replacements.
And lastly, you must consider the peace of mind that comes with knowing that your car is insured and to your liking’s degree.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.