Rental Car Expert Reveals Some of the Exotic Car Rental Industry's Dirty Secrets

First, do not try to start a business online after you have seen someone sell a course that will teach you how to start an online business. It sounds a bit counterintuitive at first, but we now live in a world where people make money from selling online courses that claim to teach you how to become successful. Just like self-help books, not all these solutions work, and most have only worked for the person who is selling the course.

Second, if you just look at various entrepreneurs and beginner businesspersons, you may get the impression that some of them are doing well financially from renting out cars on Turo, or on similar platforms.

At the same time, those people are leasing the vehicles in question, and doing so goes against most standard contracts for individuals. Moreover, it also goes against what their insurance allows.

In other words, in just two distinct but interconnected points, the idea of leasing a vehicle so that you can rent it out on Turo, and then start a business out of it is not something that will get you very far.

We are going to explain why that happens thanks to Rob Ferretti, who decided to explain some of the secrets of the exotic rental car industry.

Usually, Rob speaks about what happened to the vehicles that he had rented out in the past two decades. Now, he decided to explain why some attempt to start a rental car business and what makes them fail in a tremendously disastrous way from a financial standpoint (not just that, but you get the idea).

The biggest issue is liability, especially with exotic vehicles. Your insurance policy only covers you, and it may cover another family member (at best) for an extra fee. If you take your time to read the insurance contract, you will find that it is forbidden to use that policy for a vehicle that is used as a rental car, and one that is offered to others to drive.

Moreover, if the vehicle is used with the scope of earning money, it becomes something that needs to be taxed accordingly, which does not happen in most cases. Another problem is that the car-sharing app that "allows you offer vehicles for rent" has limited liability in the entire thing.

Why? Because they only claim to link an owner to a customer and do not own or rent vehicles themselves, there is no risk to them, but they do get a commission out of the deal.

For example, if you have a vehicle that is rare or special enough that it could be rented out for $500 a day, you must split the money collected from the customers with the app, and the process is done automatically, without your involvement, as they are handling the purchase, as well as getting the customers through marketing.

It is the same as with a house that you rent out on a specialized platform, but you do not affect its resale value if a customer goes too fast in it because they cannot drive it. Instead, you will be out of luck if they are negligent and set the place on fire.

It is their platform and their rules, but it involves your car, so you are taking most of the risk here. Why? Because if the vehicle is damaged while it is being rented out, the firm will only pay a limited amount per day for lack of usage, but not for the repairs.

In other words, the firm that runs the app will not compensate for your loss except the minimal rental price of an average vehicle for a day, for each day your vehicle is out of service, but up until a certain point.

Moreover, the payment will not be nearly as high as you would like. Think $50 per day instead of what you thought was enough for your vehicle that you rent out for hundreds of dollars a day in a normal situation.

Obviously, if the vehicle is also crashed, not just with worn-out brakes, tires, or clutch, it will put a mark on its resale value. That means that you will lose more money in the long run, not just the repairs that need to happen out of your pocket, but also the money that your vehicle will be worth once people check its history.

As Rob Ferretti noted, some people try to find alternative solutions to this issue, but these are never the right option. For example, changing the carbon-ceramic brakes to steel ones or installing mileage blockers.

The latter is sold as devices meant to limit the number of miles shown on an odometer while the car is being used for testing and tuning purposes, like a dyno session. Instead, some people use these to reduce mileage registered on their odometers so that they get to have low mileage on a rental car.

Tampering with a vehicle's odometer is not legal, as you should be aware, and the only "benefit" of these devices is that they cannot reduce the existing mileage on a vehicle. They just limit it from increasing or reduce the increase dramatically. It is still illegal, nonetheless.

Some devices claim to only register three to five percent of the actual mileage being done, others can record zero miles while being used, and they are all sold for testing purposes. That last part allows the sale to happen, and it is the user's responsibility to comply with the law.

In conclusion, starting a rental car business is not something that someone should do with the only vehicle that they own. If they are leasing a vehicle, it should not be used for the business, as well as if the contract is made for personal use. The same applies to insurance. Doing it regardless risks voiding the policy or the contract, and the person on the lease deal or insurance policy will be held accountable.

While some people may advertise things that they claim will bring you wealth if you apply them, or at least an income source, think about what they have to gain from teaching you their secrets, and then think again about their motive. Starting a rental car business with leased cars on personal contracts is not a business idea.