Once a month (at least), someone in the Exotic Car Hacks community poses a question about renting their exotic on Turo to offset the monthly payments.
In theory, I understand why this seems like a good idea on the surface.
Rent your car out for just 3-4 days and your entire monthly payment could be covered.
But is the risk worth the reward?
In the world of exotics, and, even more specifically, Exotic Car Hacks, the answer is a resounding no.
But no horror story was as well documented as the one about this R8 rental disaster from 2017.
The cliff notes are this:
In the event of a serious accident, it’s a nightmare.
If you’re using Turo’s insurance (which you most likely would be, as it’s near impossible to get a commercial policy these days), you’re probably not going to get the full value back for your car because it won’t be judged fairly against other “comps”.
From cars constantly in the body shop, curbed wheels, abusive driving styles, and the dreaded total-loss accidents, it just doesn’t make sense to risk an asset of this level to a Turo renter.
The good news for you is that when you’re using Exotic Car Hacks properly, you don’t need Turo.
Buying a car that is depreciated, or appreciating, means that you’re not at risk of what we call “paper loss”, or a reduction of value of the vehicle while you own it.
So while your payment could be anywhere from $300/mo to $1500+, that money isn’t “lost money” that needs to be recuperated. It’s simply being transferred into the value of the asset while you own it, and will be recovered when you sell it.
You don’t need Turo renter’s money to offset your expense because it’s technically not an expense.
It’s a temporary transfer of wealth.
“OK, OK, but is there ever an instance in which Turo could be a good idea?”
Sort of.. but not with exotic cars.
You’ll still have the same risks of curbed wheels, body damage, and catastrophic accidents, but when you step down to mid-level luxury & sports cars, the “max risk” is a lot lower.
The downside of working with cars at this level is that, because you’re renting out cars that are depreciating, your profit potential is much lower.
You need enough rentals to cover your monthly payments, any repairs, detailing, and Turo fees before you’re in the black and turning a profit.
For all that work and leveraged debt, there are much better ways to make money. Might I suggest investing in luxury watches?
In short, don’t rent your luxury or exotic car on Turo.
If you can’t afford the payments then you shouldn’t own an exotic car anyways.