How to Turn Your Car From a Money Pit Into a Money Tree

by |

Many of you here on BiggerPockets have read Robert Kiyosaki’s ground breaking book, Rich Dad, Poor Dad. You understand the difference between an asset and a liability. For those who don’t know the difference, in Kiyosaki’s words, “an asset puts money into your pocket, while a liability takes money out of your pocket.”

While the words look and sound the same, the definitions are quite different from what most people think when they hear assets and liabilities. The generally accepted definitions suggest that an asset is anything that you own that you can sell, whereas a liability is any debt owed to someone else.

In Set for Life, Scott Trench differentiates these two by calling Robert Kiyosaki’s definition real assets and the more conventional interpretation fake assets.

One of the most common fake assets is your car. While you can likely sell your car, it takes money out of your pocket every single month by way of gas, insurance, maintenance costs, etc.

In this article, I am going to show you how to turn your car from a fake asset to a real asset. Here’s how to take your car from an expense to a money-maker.

For most of you, the suggestions in this article cannot be executed overnight. The strategy in this article is for the folks who have an extra car or are thinking about alternative ways of transportation. If you are one of these people, read on — and learn how you can turn your car from a money pit into a money tree.

How to Analyze a Real Estate Deal

Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.

Click Here For Your Free eBook

Use Turo

Turo is a short-term car rental service. It is just like AirBnb, but for cars. Car owners who have an extra car (or use theirs sparingly), put a listing on the Turo app, and then various user can rent it out for a selected period of time. The driver of the car pays the owner through the app, and Turo, of course, takes a cut of up to 35 percent.

That may sound like a lot, but 35 percent covers Turo’s insurance costs (more on this later) as well as the cost to advertise your listing to a mass group of people.

In order to list your vehicle, it must be younger than 12 years old (15 years if it’s German made). All potential listings must pass the eligibility requirements. You’ll need valid personal insurance, and the car must pass maintenance and safety requirements.

Once your car checks all of the above boxes, it’s time to create the listing. Making the perfect listing is another topic in itself. Here’s a brief overview of what to double check:

  1. The calendar is correct, and you have marked the vehicle as “unavailable” during any times you may need the car.
  2. The price is right. Take a look at similar nearby cars  to see what they are charging.
  3. Pictures: Take your pictures on a sunny day, and make your car look nice. Get it washed. Clean it out. In the past, I have taken my pictures with my iPhone and they’ve come out nicely. If there’s a lot of competition, you may want to take the photos with a nicer camera or hire a photographer.

Rent it Out

Once the car is listed, it’s time to rent it out.

Create a set of instructions for check-in and check-out that you can easily copy and paste into Turo’s messaging system. In the message, I like to include where they can pick up the car and where the key is. I also remind them to take pictures. Ensuring that your customers take pictures before and after their ride will help you track damages and hold drivers accountable.

Here is a sample message that I use:

“Hey [guest first name]— I  hope you arrive safely! Please see instructions below!

You can pick the car up at [address].

The car will be on the street. The key is [explain where the key is hidden]. Please put it back there when the trip is over.

Please take pictures before and after your ride to make sure you are not credited for any prior damages.

Enjoy the vehicle and let me know if you have any questions!”

Once they have the car, it’s pretty much smooth sailing. Occasionally, drivers will have a question. But in most cases, I have found that using a car is pretty intuitive. They come, they drive it around, they return the vehicle, repeat.

Related: 12 Game-Changing Productivity Apps For Real Estate Investors

Insurance with Turo

One of the most common questions I get with Turo is what about insurance? What if someone cracks up your car? What do you do? There are a million different scenarios that could happen, and whether the insurance company will cover it or not has always been a mystery to me. However, as a car owner on Turo, you have three layers of protections.

The first is the renter’s car insurance. If the incident is the renter’s fault, their insurance should cover any damages. If not, then there is Turo’s car insurance (part of the 35 percent fee you pay). Turo covers your car up to the cash value of it. Learn more about this insurance here.

If the first two layers fail you, then you still have your own car insurance. Make sure you do not try to skirt around this with your current insurance agent. Let them know that you plan to rent the car out to other people. In order to get approved as a driver on Turo, you need to have a clean driving record. Be sure to let your insurance team know that the drivers will be responsible with clean records

How Much Will You Make?

I have had my car on Turo for about a year now. My car is a 2013 Toyota Prius C. It rents for about $30 per day. I keep $21.75 of that after the Turo fee. This is certainly not a life-changing amount of cash, but it’s great if you do not use your car and are just beginning to build your early retirement nest egg.

In Denver, summer months are better than winter months for Turo. In the winter, Turo nets me $100–$200 of additional cash per month. But in the summer months, it’s closer $600 after all expenses and fees.

This additional cashflow easily covers all of my insurance and maintenance costs and provides me with a little additional cashflow each month. My car is now a real asset.

My favorite part of the Turo business is the tax savings. In the second half of 2017, I made approximately $3,000 with the app. Because I am allowed to take the standard mileage deduction for every mile my renters ride, I actually showed a $2,000 loss on my tax return. This loss was carried over to my W2 income, allowing me to see a greater tax return than ever in April 2018.

Uber & Lyft

Does renting out your car make you feel a bit nervous? Another way to turn your car from a liability to an asset is to drive it for Uber or Lyft—two of the most popular ride sharing services.

In order to do so, your car will have to be a 2007 model or newer. You’ll need to pass a background check, and your car will have to pass inspection. The requirements for Uber and Lyft can be found here and here, respectively.

When I first moved to Denver in April 2017, I drove for Lyft for about three months. Left claims that drivers make up to $35 an hour. That’s complete hogwash! Unless you drive someone to the airport after a Jay-Z concert, you aren’t going to make $35 an hour. In my experience, it was closer to $12–$17 per hour. Over the course of a month, I’d make around $1,000—but I was driving a lot! Close to 20 hours per week.

Because you make more per hour driving for Uber or Lyft than you do with Turo, the tax advantages aren’t as attractive. In 2017, according to the IRS, even with the standard mileage deduction I still had a $1,000 gain. Guess who had to pay taxes on that difference?

Related: Your Car is an Expensive, Health-Sucking, Time-Wasting Machine. So, Ditch It!

Uber & Lyft or Turo?

So what do you do? Would you prefer to rent your car out? Or would you prefer to drive people around? That’s a decision you need to make. I can help by laying out a few pros and cons.

Uber/Lyft Pros

  1. Make more money
  2. Meet a lot of different people
  3. Learn your way around your area
  4. Stay in full control of your vehicle

Uber/Lyft Cons

  1. You must trade your time for money
  2. You have to be friendly
  3. Fewer Tax Advantages
  4. Occasional drunkards

Turo Pros

  1. Car truly becomes an asset that’s working for you; your dollar-per-hour amount is virtually infinite because you aren’t working
  2. Tax benefits
  3. You don’t need to meet your customers
  4. No drunkards (we hope)

Turo Cons:

  1. Giving a stranger access to your car
  2. Make less money overall


It really boils down to how much you value your time. If you feel as though you can do better, more productive things than drive people around, then Turo is your answer. If you’d prefer the extra couple-hundred bucks a month and are OK sacrificing your time, then Uber and Lyft may make more sense for you.

In either scenario, you’re turning your car into an income-producing asset. If you are able to do this, it’s a giant step forward in completely eradicating (or significantly reducing) one of your largest monthly expenses.

Have you tried these apps?

What did you think? Share your experiences below!

About Author

Craig Curelop

Craig Curelop, aka thefiguy is an aggressive pursuer of financial independence. Starting with a net worth of negative $30K in 2016, he has aggressively saved and invested to become financially independent in 2019. From sleeping on the couch and renting out his car, he was able to invest in two house hacks in Denver and a BRRRR in Jacksonville. He plans to continue to investing in both Denver and Jacksonville for the years to come. Craig's story has caught the attention of several media outlets, including the Denver Post, BBC, and many other real estate/personal finance podcasts. He hopes to inspire the masses to grab hold of their finances and achieve financial independence. Follow his story on Instagram @thefiguy!


  1. Julie McCoy

    I’ve spent extensive time looking into Turo (and other peer-to-peer rental platforms), and there’s a fundamental problem – there does not appear to be any personal insurance product that will allow you to rent your car in such a way, and no commercial auto policy that would be practical for a 1-2 vehicle scenario. Turo’s insurance policy is solid, BUT if something goes sideways – such as your Turo renter letting their friend take the wheel, and an accident occurring – you’re totally un-covered. AND if your personal insurance company finds out you’re renting your car, they’re going to drop you like a hot potato. Your personal umbrella policy won’t apply. You’re toast.

    This might be worth the risk if you don’t really have any assets to lose in a lawsuit. However, for most of us on this forum, we either have or are working to have assets with substantially more value than a vehicle. I concluded it was not worth the exposure for me to rent my car out (which was truly disappointing, as I was counting on it to help offset the cost of a new vehicle).

    If someone knows of an insurance product that does allow this, I’d love to know about it, but based on my research the insurance marketplace has not gotten into this niche yet, and that’s a risk I’m not willing to take.

    With Uber/Lyft, you can usually get a rider on your personal insurance policy that’ll cover you (and if your insurance company doesn’t offer one, switch companies and get one before you start). Letting someone else drive, however, leaves you potentially exposed to disaster.

    • Craig Curelop


      Thanks for the extremely valuable comment! There are three layers of insurance as I mentioned in the article above. However, if a driver let’s his/her friend drive it and they get in the accident. It would have to be the friend’s insurance that covers it. I don’t believe Turo’s insurance would cover a non-registered driver.

      You need to tell your insurance company what you are doing and make sure that you are covered for that. My insurance agent has crafted a plan up for me that shows that I am covered.

      • Jared Newsom


        I agree with Julie on this one. I am an Insurance Broker in Texas and have looked into this extensively for a client. Out of the many companies I represent, NONE of them allow this type of exposure. If there’s one out there, I am unaware of it. Most Turo clients will not find this out until a claim is submitted on their policy and coverage gets dropped. I’m not saying Turo is a bad idea, but most personal auto insurance policies exclude it. Please don’t hide it from your agent; it could come back to bite you…

        Craig, if your personal policy truly allows it, please drop the company name here so I can look into it for my clients. Thank you.

  2. Isaac Kinard

    Be careful. i have been renting cars on Turo since it was RelayRides.

    It is generally pretty good, but I presently have 3 cars in the body shop, one of which the claim was denied on.

    I have had the police call me 3 or 4 times about crimes committed in my vehicles.

    Turning over the vehicles and maintaining them is a part-time job.

    After expenses, you might get $100-$200 before depreciation.

    • Craig Curelop

      Oh wow! I have not had any bad experiences yet… (knock on wood!). I suppose they are inevitable though.

      In the winter months I get $100-$200. However, in the spring and summer months it is closer to $500-$700 per month.

      I think the price and the amount it is rented is really based on location.

    • Craig Curelop

      Hey Isaac,

      Yes – they definitely are! I’ve got seat covers that do the job. I’ve only cleaned the car out twice in the year that I have been doing it. It’s certainly not spotless, but it is respectable.

  3. John Matthews

    Addressing the comments about people being filthy, etc. One strategy is actually to rent out high end cars on Turo. I currently rent out my Tesla Model X as a means to feel a bit less guilty about the $100k liability. The befit here is that there’s a bit more barriers to entry for people renting your car. Renters must be 30+ and the cost is significantly higher. High price generally equals higher class clientele (though not necessarily!) as with rental property. The other benefit is the profit/hour is higher by virtue of the higher price. Yes it’s work (moreso with the Tesla since it’s unique) but I’m at least paying myself more than minimum wage with the benefit of getting to drive my dream car.

  4. Todd Miller

    I have 3 cars on turos. I’ve noticed cheap cars draw the worst people. Same goes for the rate. The lower the rate the worst renters . Pictures are absolutely a must. You need to take 11-14 pictures before the car goes out so you have proof. all sides, cornees, mileage and fuel. seats etc. Uploaded to the booking. I had one renter wreck and repair my car without my knowledge. She kept extending the rental which was odd. I figured it out after seeing a scratch that was missing. The whole rear end was repaired. Now I track my cars using GPS. This helps a lot. Turos isn’t for everyone. it’s a lot of work keeping the cars clean and maintained for overall not a lot of cash. But it does pay the car note if you’re doing it right. Just be prepared to lose the car. If u are ok with that good.

    • Craig Curelop

      Great advice, Todd! Thank you for sharing.

      Truthfully, I don’t put all that much effort in keeping the car clean. It stays pretty clean, but i do have seat covers. If I get a complaint about it being messy (once in the past year), I will clean it out.

      Usually, people are grateful to get a car much cheaper than a typical rental car would.

      • Todd Miller

        I generally clean my cars after every trip. Certainly with my higher end car, people are paying a premium and as a customer I would certainly expect a clean car inside and out if I am paying for the experience. I would ding an owner if I rented a car and saw crumbs or trash in it. Also people tend to leave stuff in the car a lot. Ive found wallets, tools, phones, chargers, flashlights, water bottles, all kind of stuff so I always go through the car after each trip. I have found a way to sort of speed up the cleaning process. I take a leaf blower to the inside and that usually gets anything I didnt see and loose change or crumbs in hard to reach areas out. If you arent having to clean much, lucky you. Thats not at all how it is with my experience.

        • Craig Curelop

          It sounds like I’m not nearly as good of a host as you, Todd. Then again, this isn’t a long term plan for me so I don’t care all that much about a bad review. I haven’t gotten one yet (out of ~50 rides).

          With my car, Turo is a lower-end option. If people want an immaculate car, they can pay for it at Hertz or Avis.

  5. Tarun Kundhi

    Every business venture should include a risk vs reward analysis. In my opinion the risks greatly outweigh the rewards for Turo or similar services.

    As Julie McCoy pointed out, good luck finding any personal insurance company that will cover damage if you rent out your car. It isn’t going to happen. Every policy I’ve read specifically excludes coverage for commercial purposes. This can be argued if you use to personal car to run a business errand but no way your insurance company is going to cover a loss once you tell them you rented out your car and the renter had an accident. A worse situation would be the renter has an accident which involves another vehicle or individual. Now, getting your car fixed may be the least of your problems. Lying to your insurance company is insurance fraud. Do you really want to go down that path?

    Here is a better idea. Don’t buy a car you can’t afford. The author got the first part of the article correct. Most cars are not assets. Buy a car you can afford and focus your efforts on activities that really help you build wealth.

    • Jamie N.

      I couldn’t agree more.

      In exchange for a few bucks you can have your entire net worth decimated if the driver ends up killing someone and the victim’s family comes after you. Your umbrella insurance wouldn’t protect you, most likely. Not worth it!

      • JL C.

        I’m curious why many people have stated an umbrella policy would not protect the owner in this situation? I thought the whole point of an umbrella policy is to cover you against such liabilities. What am I missing?

    • Craig Curelop

      Thanks for the well thought out response, Tarun!

      I have told my insurance company about renting the car out on Turo and did not seem to bat an eyelash at that fact. They cover it in most situations. Granted, I do pay a bit of a premium for it.

      I still believe that you should not buy a car you can’t afford. I bought my car cash. But it is just a nice passive income stream while the nest egg begins to build.

  6. Steven Silva

    I have rented on Turo in Colorado since around the time it was launched here. I agree with some of the risks, and have rented luxury and regular models. I agree that the cheapest cars do not get great renters.

    When I have had issues, Turo generally does pay me back, but it is always better to work it out with your renters insurance direct, as Turo is cheap as F&$% and doesn’t really do a great job for assessing the damage. I have found a great cheap mobile body shop… I’ll leave it at that.

    Turo is a interesting/great solution to get crazy ROI (better than real estate) with low barriers to entry, but I’ve made a lot of mistakes and just like managing real estate, I have learned how to mitigate that risk. I have not felt the need to follow my cars via GPS (I have looked into Hum by verizon, but just feel I’ve been better lately at screening renters, so I don’t have many worries).

    I run a Facebook group, “Turo Owners Network Of Colorado” (small) where I share some of my experiences and solutions.

    One of my biggest issues with Turo is that it is becoming saturated. When I first started my returns were around the 45% range when putting 5-10% down on a 3 year old car at 3-4% financing, the margins were great. However, now a lot of owners are not pricing their cars right. Many owners are looking very short term and are not savvy investors. Just like a newbie underwriting a rental property and being overly optimistic about things like vacancies, utilities, capital expenses/repairs, etc., the new Turo owner misses a lot of hidden costs as well. I go more into this on my Facebook page and how to price a car right.

    Due to the saturation on Turo, I am getting closer to 25% COCR after costs including depreciation, wear and tear, and cap ex. On my rentals I am lucky to find that, but I do believe real estate is more proven and more passive, so I prefer real estate.

  7. Todd Miller

    I agree on pricing. I see some NEW cars listed at $10 a day. Im not sure how these people make a profit doing that. Not only are they hurting themselves they are hurting the whole community. Granted, if people want to take the lowest quality renters, let them! I dont usually see those $10 cars listed too long! Probably torn up and ruined. If you think about getting into this, you arent doing anyone a favor, esp yourself by undercutting everyone in your listing price.

    • Craig Curelop

      These are likely the people who are just renting it out to “help” them with their car payment. They have no idea that they can actually price it so that their entire car payment is paid for.

      Same thing happens in real estate, I believe.

  8. Vaughn K.

    I’ve thought about doing it with one of my vehicles that is new enough to qualify… But the math just doesn’t pan out.

    Too many people list their vehicles too cheaply. After you factor in maintenance and depreciation you’re really not making ANYTHING at all. Lots of people seem to list economy vehicles at rates that will actually lose them money after maintenance/depreciation is factored in.

    The only exception to this seems to be if you have a higher end car. With those most rental agencies literally don’t even carry those types of cars, so you can kinda charge what the market will bear. I’ve seen sports cars, classics, etc renting for hundreds a day, which should more than cover the costs associated. Since my vehicle is more the “commodity” type vehicle it just doesn’t seem to make sense.

    I have no intention of buying a flashy car for myself, and I don’t want to buy one just to try out Turo… BUT if one were considering buying a fancy car, and wanted to offset expenses, I think those are the only kind where Turo might make some sense.

    • Todd Miller

      You are right, I had a Hyundai Accent and the rate was around 15-25 a day. After Turos cut (25%) and if they rented a week (-15%) or month (-30%) you aren’t making much money unless you change those rates and discounts. And this is how my accent ended up trashed as my first car on Turo. So if you bump it to $30-$40 a day now its not worth it because you can rent a higher end car for that amount or for the renter, just use enterprise etc!! So with my next car, I bought a “smart” car which is more unique and I am able to charge a higher price even though its still a cheap car. This one has been rented out a lot because people want to try it. And I think thats the key if you want to do this, you need to have something interesting or useful for people to drive. Otherwise if you are renting out a common car, you wont have as many customers unless you lowball the rate. Most customers who did rent my accent when I would test the higher rate were the people renting after hours and on holidays. But they came far and few b/w. I was driving Uber with the car to make up the time/cost it spent sitting in my driveway unrented. And driving Uber, esp in Houston, SUCKS. Average pay in minimum wage before expenses.

      • Vaughn K.

        Sounds pretty much like I was thinking. Mine that qualifies is a minivan, so I could get a bit above econobox rates, but looking at others renting minivans out it still isn’t much. I keep track of expenses for my vehicle, and I would say you could easily put maintenance/depreciation at $.30 a mile or so. It could be a touch higher or lower, but somewhere in there. So if people put on anywhere close to the allowable mileage per day you’re basically losing money! You get the tax write off that is higher than that, but it’s still not worth it as that’s only saving you whatever your tax bracket is off of $.52 per mile or whatever it is this year.

        If you had a cash crunch situation it might make sense to have the cash flow coming in, even if you’re not netting anything… But that’s very much a stopgap type measure only.

  9. Justin Kling

    We are using Turo as part of a fundraiser for my 12 year old son. There’s an awesome science trip to FL for $2200 that my son would love to go on. When he told me about it he said “but I can’t go because it’s too expensive.” I saw this as a chance to teach some Kiyosaki lessons & told him he can go, he just needs to figure out a way to make $2200. So the Q he needs to ask is HOW can I make $2200. It’s like real estate investing, I don’t know how to rehab a house but I can invest money with someone who does know & we split the profits or I don’t know how to do my taxes but my accountant knows. I leverage other people’s knowledge to help me & he can do the same by asking others for money making ideas. So he came up with some ideas like GoFundMe, cleaning, eBay, Craigslist, & car washes. I told him about Turo & that we can give it a try but he’s in charge of cleaning the car. So after 6 weeks we’ve had 9 trips & 2 cancellations (still get a few bucks from those). The issues have been people dropping off the car with the tank under full (“it was full when I left my house”), being late for pick up, late for drop off (one woman was 4 hours late), 2 smoked in my car (my ad says No Smoking), one smoked pot in my car (now my son knows what pot smells like), & the couple that rented it yesterday spilled a drink on the seat. Total earnings are $527. So it’s a way to make money but not really worth the hassle & wear and tear & risk of an accident. However, the lesson my son is learning about making money is worth it. Just my two cents.

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here