Personal Finance

How to Use Turo to Rent Out Your Car

Expertise: Personal Finance, Personal Development, Real Estate Investing Basics, Landlording & Rental Properties
59 Articles Written
Cars stuck in traffic at an intersection

Most people believe that cars are a necessary evil. Yes, they help you do your work and run your errands, but they also drain a LOT of money out of your pocket.

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Between loan payments, insurance policies, gas, repairs, and maintenance, they are almost as expensive as having a kid!

Not for me, though. And after you read this article, you too might decide to turn your car into a car rental business.

I’ve done presentations, been on a few podcasts, and written some articles about how I have turned my car from a money pit into a money tree. Following these appearances, I received a wide array of questions from a lot of people.

In this article, I’m going to explain exactly what I did, how I did it, and what it means to rent your car out to someone else.

I will also share with you why I recently stopped listing for car renters, and the exact financial results now that my initial journey into car sharing is over.

If you’re looking for a creative way to turn your car from a traditional liability into a cash flow-producing asset, this article is for you.

I understand that this exact tactic may not work in your current situation. But I do hope it will at least get your proverbial wheels spinning about how to turn your personal car into a side hustle that earns you extra money, too!

Here goes.

Purchasing My Car

When I first moved to Denver in April 2017, one of the first things I did was purchase a car. My intention was to use the car to be a Lyft or Uber driver, so I was looking for something that was reliable and had good gas mileage.

I purchased a 2013 Toyota Prius C with 52,000 miles from the dealer. It was listed at $12,500, but I was able to negotiate it down to $10,000 (paid with cash) using the tactics from the book Never Split the Difference.

The Ride-Sharing Experience

For the first three months of living in Denver, I would drive around for Lyft. The purpose was to make money while getting to know a new city and meeting a whole bunch of random people. I accomplished all of these goals. I made over $3,000, figured out where I wanted to buy my first property, and even found my current Airbnb cleaning crew. Win! Win! Win!

After those three months though, I realized that I didn’t have an “asset” so much as a job—and a fairly low-paying one at that. So I stopped driving for Lyft and started focusing on other, higher-paying activities, such as giving 110 percent to my 9-to-5 job at BiggerPockets.

The ride-sharing app had served its purpose for me, and I was happy to move on with an extra $3,000, a better understanding of my home city, and picking up a great cleaning crew.

The Turo Experience: An Introduction to Car-Sharing

I intentionally purchased my first property 1.5 miles from the office so that my primary method of transportation would be my bicycle or my feet. Every single day, I would bike past my car in the drive. I thought, “It’s a shame this car is just sitting there. How can I put it to work for me? Can I rent my car out to someone since I’m not using it?”

Then I remembered I had once rented someone’s car on a site called Turo. For those of you who don’t know, Turo is the “Airbnb for cars.” People who have an extra car, or do not use their cars regularly, put them up on a marketplace for renters, either occasionally or for bigger chunks of time.

And that’s exactly what I did with my Prius. Now, rather than just sitting there underutilized, it would provide me with a passive income.

Listing Your Car on Turo: How it Works

Criteria

Turo is a great app for people seeking to rent out one or more of their cars. Based out of San Francisco, Turo boasted 4 million users as of 2017, with 170,000 cars available for rent. In many ways, Turo is a win-win for hosts and renters, offering an innovative way to share vehicles. However, before you go list your car, become familiar with the site’s criteria for hosting.

This includes:

  • The car must be legally registered in any state but New York. Sorry, New Yorkers! (Go Sox!)
  • The car must be no more than 12 years old.
  • The car must meet Turo’s insurance policy requirements.
  • The car must have less than 130,000 miles on it and have a clean title.

Check out the full list of criteria here.

If your car meets all the requirements for renting to someone else, you are now able to list it on Turo’s platform for renters to pick up. Competitor platform Getaround has a similar process and workflow but is only available in select U.S. cities.

Listing Your Car on the Turo App

Creating your listing is intuitive. All you need to do is go to Turo.com and click “list your car” in the top navigation bar. Turo will then take you through the steps necessary to list your car. You’ll need your driver’s license, license plate number, and insurance information when signing up to be a host, so be sure to have all that handy.

You don’t need to be an expert to optimize your Turo listing. Here’s what I did for my listing: I gave as much detail as possible for renters to absorb.

  • How good is it on gas?
  • Does it have 4-wheel drive?
  • Is it a smooth ride?
  • Do you have a sunroof?
  • What about a Bluetooth radio?
  • Air conditioning?
  • Power windows?

Everything you can think of, put it down! Don’t worry, Turo helps you, too.

Related: 4 Steps to Buy the Car You Want Within the Budget You Can Afford

Then, it’s time for the pictures. In some cities, Turo actually offers to pay for a photographer to come take photos of your car. The only downside is that they take a while to get there. Personally, I just used photos from my iPhone 7 and had success.

When you take the photos, make sure your car is newly cleaned and take them on a sunny day. You’ve seen the car commercials—just imitate them and you’ll be fine.

Here are a few pictures of my car.

How Renters Find Your Car Listing

Now that the car is listed and ready to go, the last step is to set pricing. This part is very intuitive on the Turo app. All I do is look at similar cars in my area and charge a couple dollars lower. Prices vary based on seasonality, so be sure to check back once a month to make sure your rates remain competitive.

Turo offers several dynamic pricing models to help hosts maximize their car sharing utilization by slightly raising prices during popular times (like weekends, holidays), and lowering prices during regular weekdays.

Here’s how it works: When someone seeking a car rental logs onto Turo, they’ll ask the app for a car near where they are or want to pick up the vehicle. When they book your car, you’ll get notified through the Turo app. Woohoo!

Some car owners will then send a welcome message telling them how excited you are for their trip. Honestly, I never did this—but regardless, you should be prepared to respond promptly to any inquiries from renters. Quick response times and good response rates likely make your listing more attractive.

Once a week, I would send the renters for the upcoming week a generic message welcoming them to Denver and giving them instructions on how to find, unlock, and operate the car. If they had any further questions from there, I would answer them kindly.

That’s pretty much it. It was an easy business to operate. It took less than an hour per week of time and most of it was just texting the renters.

Car-Sharing FAQs

After explaining the above, I usually get a slew of questions:

  • How do you know they are good drivers?
  • How do you coordinate the key handoff?
  • What if something happens?
  • What if your car gets destroyed?

I will try to be proactive and answer these questions right now.

How do I ensure safety and protection when renting my car out?

In order to book a car through Turo, you need to go through a screening process. Turo needs to verify that you are 21, that you have a valid driver’s license and clean driving record, and that you meet their auto insurance score benchmark.

The auto insurance score benchmark is, in my opinion, the most important. It’s the equivalent of a credit score for insurance agencies. Essentially, it is a three-digit score that predicts the probability that your would-be renter will file an insurance claim.

The driver’s ability to utilize the rental service will be highly dependent on this score. If it’s bad, Turo will not allow the user on the site. The process is nearly identical for Getaround renters to be able to rent from the app. This is how Turo and Getaround sustain the reliability of their marketplaces, and frankly, it’s a key way they stand apart from traditional rental companies.

How do you hand off the keys?

This one is simple. The best way is to purchase a magnetic lockbox and put it underneath your car.

Tell your driver the location and combination of your lockbox in the message you send, and you will be good to go. Ask them to return the key and lockbox after they are done with the rental.

Since you will not be there for the key handoff, make sure that they take before and after pictures! This is extremely important. Turo may not reimburse you for damage if there are no pictures submitted to them within 24 hours.

What if something happens to my car while it’s rented?

If something happens to your car while the renter is driving it or before they drop off the car when they’re done, the renter will report the problem to Turo, the police, and you as the owner. Turo also offers roadside assistance for renters in most cities. If there’s an accident or incident, the police will have your car towed, and you will then need to decide whether you want to take it to a mechanic (if it can be saved) or the scrap yard (if it’s totaled). So the million dollar question is—who pays for this?

There are up to three insurance policy options that can provide coverage:

  1. Turo-provided liability insurance for both you and the renter
  2. Turo offers three different protection levels. The highest level of protection means more coverage for you, but less of the gross fee paid by the renters goes into your pocket.
  3. The renter’s personal insurance
  4. Your personal liability insurance—check with your insurance company to verify the personal coverage details.

There is a high probability that one of the above options will pay out and you will be covered. However, if none of these options work, you will be left with the bill. Read more about the personal insurance coverage details for hosts and for renters on Turo.

Let me tell you what happened to me.

My Car-Sharing Story

After just over a year of renting my car through Turo, a renter totaled my car. In hindsight, it was the best thing that could have happened! Here are some pictures.

First and foremost, everyone walked away uninjured—just a couple of scrapes and bruises. Phew!

Related: Why I’m Not House Hacking (& the Strategy That Will Cover More of My Rent)

Secondly, I was going to take my car off Turo in a few weeks anyway, because as with Lyft, I thought it had served its purpose for over a year. I was ready to sacrifice a little bit of cash flow to have a car at my disposal.

Thirdly, I was cash flowing approximately $250 per month on average for the past 12 months. That is $250 after I paid for insurance and set $100 per month aside for repairs. Remember, I paid cash at the outset so no car payments.

Lastly, after going through the insurance process, I was able to get over $11,000 back from my car. If you remember correctly, I purchased the car over a year ago for just $10,000. So after one year and about 20,000 miles, I was able to get $11,000 for my $10,000 car on top of the monthly cash flow.

Final Numbers

Quick recap: I purchased the car for $10,000. For the first three months, I drove for Lyft and made $3,000 extra cash in total. For the next 12 months, I listed it as a rental car on Turo and generated $250 per month cash flow, or $3,000 for the year.

Then, my car got totaled and I was able to obtain $11,000 in insurance money for the car. That’s a $1,000 gain on the vehicle alone.

All in all, after about 15 months of having the car, my net worth increased by $7,000, meaning $6,000 from cash flow and $1,000 from the sale. Not a bad deal—especially when compared to the average American, whose car likely costs them around $8,500 per year to own and maintain!

The car ownership to car rental path might not work for everyone, but it’s a more-than-viable path for many of you. The gig economy has opened up fascinating opportunities for car sharing, as one of the most stagnant assets in the country is being freed up to generate cash flow for millions of car owners.

Turo Alternatives: Getaround & HyreCar

As mentioned, Turo isn’t the only car-sharing app out there. If you’re looking to explore other options for listing your car for rental, Getaround and HyreCar are alternatives to consider.

Similar to Turo, Getaround is based out of San Francisco, and its top markets for service include Boston, Chicago, Los Angeles, Miami, New Jersey, Philadelphia, Portland, San Francisco, Seattle, and Washington, D.C. In each of these cities, Getaround features readily available vehicles at airports, shopping centers, convention centers, and more—along with passengers looking for cars. To view the full list of locales where Getaround is available (including Canada, Germany, and the United Kingdom!), click here.

HyreCar is a little different than Turo and Getaround in that it’s designed specifically for Uber, Lyft, and on-demand delivery drivers. HyreCar is a great option for those using ride-sharing as a side hustle, who don’t want to use their personal vehicle or who don’t own a vehicle and want to generate extra income through these services. Based in Los Angeles, HyreCar recently expanded into all 50 states and Washington, D.C., so finding or hosting a car through the app should be straightforward in all major U.S. cities.

Conclusion

I hope this article proved to be useful to you and cleared up some of the uncertainties about renting your car out. The traditional car rental companies have a serious new competitor in Turo, one that could revolutionize the industry.

I realize that I am fortunate to have had this outcome. I’m not guaranteeing that you will have the same results, but I do believe that the odds of you improving your financial position by renting your car out and creating extra income is much better than if you don’t.

As for what’s next for me? I am looking for a traditional car to buy that I can pay $6,000-$7,000 for so I can pocket $4,000-$5,000 of liability insurance. It’s always a good plan to avoid car payments when possible, so I’ll be paying in cash.

Would you consider turning your car into a rental car on Turo, Getaround, or Hyrecar? Why or why not?

Comment below!

Craig Curelop, aka thefiguy, is the author of The House Hacking Strategy and a driven pursuer of financial independence. Sta...
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    Jeff White Rental Property Investor from Denver, CO
    Replied over 2 years ago
    Haha, I had the exact same thing happen to me, I bought a used 6K Corolla, got in a accident, and the insurance company paid out 7K after the deductible, so I made 1K profit too. Unfortunately, I never got a chance to put the car on Turo to see what it is like. All in all, great story Craig, those are some fantastic numbers for making your car a profit center, especially if someone can walk/bike/carpool/lightrail/subway/train/etc to work to avoid using their own car, and on top of that, I’m sure the health benefits are fantastic as well. I don’t know the exact studies, but in general, daily 30+ min commuters have high stress levels and cholesterol. For your future purchase, are you looking to use that app again and keep biking to work? Also, if you don’t mind, what insurance company do you use that allows you to Turo? You can pm if you want. Thanks.
    Craig Curelop Real Estate Agent from Denver, CO
    Replied over 2 years ago
    Hey Jeff, Good to hear from you! I am not going to use the app again. I feel as though it has served its purpose in my life. Now I am okay with having my own car and just using it very sparingly (similar to what Mr. Money Mustache does). As for the insurance, I use Allstate.
    Alex Wald Investor from Denver, CO
    Replied over 2 years ago
    Thanks for the tip on the magnetic lock box!
    Craig Curelop Real Estate Agent from Denver, CO
    Replied over 2 years ago
    No problem man! It was actually Connor who gave me that idea.
    Ed Adrian from Denver, CO
    Replied over 2 years ago
    Great recommendation Craig. How many days (on average per month) was the car used/requested?
    Craig Curelop Real Estate Agent from Denver, CO
    Replied over 2 years ago
    Hey Edson, Thank you! It was rented almost everyday. Maybe one or two days a month it was not rented. In these situations, I would make my Costco run and do any other car-related things.
    Gianni Laverde Investor from Corona, NY
    Replied over 2 years ago
    Very informational article. Unfortunately, I’m in NY so will not be able to try Turo. Thanks for sharing.
    Craig Curelop Real Estate Agent from Denver, CO
    Replied over 2 years ago
    Thanks Gianni!
    Joe A. from Duxbury, Massachusetts
    Replied over 2 years ago
    I’ve been thinking about selling my car. I won’t get much for it, but see it more as getting out of a liability. My wife has a car and I take the train to work, so it wouldn’t impact us much. Any more details on why you stopped Turo? Just not worth the hassle?
    Joe A. from Duxbury, Massachusetts
    Replied over 2 years ago
    I’ve been thinking about selling my car. I won’t get much for it, but see it more as getting out of a liability. My wife has a car and I take the train to work, so it wouldn’t impact us much. Any more details on why you stopped Turo? Just not worth the hassle?
    Rob LaRovere Rental Property Investor from Tampa, FL
    Replied over 2 years ago
    Interesting article, Craig! Thanks for sharing. Which profit split/insurance option did you go with? It looks like Turo offers 3 levels ranging from 15%-35%. Did you suggest that the guest uber or lyft to the location of the car? Or did you keep it near the airport? Also, did you invest in a shop vac to make sure your car was clean or did you hire a mobile detailing service?
    Nathan Brooks Real Estate Investor from Kansas City, KS
    Replied over 2 years ago
    Craig, what do you think about doing a higher end car for rental on Turo?
    Patrick Sears from Midlothian, Virginia
    Replied over 2 years ago
    Hey great info! Curious, for having your car rented nearly everyday of the month, $250 net sounds kind of low, especially when you consider the depreciation of the asset. The major car rental outfits usually get $150-$200 per week even on their economy-sized rentals. What was your daily gross revenue on this rental?
    Lesley Resnick Real Estate Agent from Jacksonville, FL
    Replied about 2 years ago
    That is really interesting. Could you publish the numbers? I see ads for rental cars for $10-20 a day for a new car from the national rental companies. How much did you get per day?
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    I’ve used Turo many times as a renter, love it. It’s also a great way to turn your car from a liability into an asset, if you absolutely must keep a car and want to mitigate the expenses.
    Account Closed Specialist
    Replied about 1 year ago
    Good write up. There is also a tool called Sharelytics that helps you understand your market/city and know the top earning cars in Turo/Getaround. You can check it out at: https://www.sharelytics.co/
    Nathan Fish Flipper/Rehabber from Raleigh, NC
    Replied 10 months ago
    Be careful working with Turo!! I too was generating some decent passive income as a Turo host, until the last guest totally wrecked the clutch and flywheel. There was no previous issue and the repair shop documented that the damage was due to significant misuse by the driver. Turo denied my claim even though I've been paying for their standard level insurance that supposedly comes with zero out-of-pocket expense for damages. Now, I'm stuck with a $1300 repair bill. On top of that, appears he put a bad tank of gas in. Turo's customer service is terrible (even before this incident).
    Beau Parenteau New to Real Estate from Denver
    Replied 7 months ago
    Thanks for the article. I'm just trying to run the numbers, however, I can't see how much one might net with a particular vehicle. Would getting a loan on a vehicle and renting it through one of these services pay for loan payment, insurance, maintenance, cleaning, and provide cashflow? Basically, I'm not eligible for my license for a couple of years, so to purchase a car and have the service pay for it, and have cashflow would be ideal. You mentioned $250 mo/ in revenue, a site like Hyrecar advertises $800-$1100 mo/. What if I purchase the car on loan through an LLC, purchase a commercial insurance policy, could I save against the service insurance? What would a regular maintenance plan look like on a vehicle used for this? I'm looking a purchasing a car through Enterprise Car Sales, which has already been used as a rental, been serviced regularly, only a couple years old, and maybe 34k miles on it. Any information is appreciated!
    Erika Franklin
    Replied 3 months ago
    Thanks for this article! I've been thinking about doing this for quite some time but would have to get financed and it sounds like most banks are against using them for this purpose.