What’s up fans! Next, my Tik-Tok video on how to make $80k a year on Turo! Please like and subscribe!
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The funny thing with me is that I’m not worried about losing a few 1000s, I’m worried about my personal insurance rates skyrocketing if someone crashes the rental. I’m currently paying $188.50 for comprehensive, (no collision) my own plan in Jersey.
So it’s entirely possible, and it all depends on how you set yourself up to work on Turo. The idea (i.e. establishing a LLC) is to insulate yourself personally as much and as far as possible from the business enterprise. That way in the event of a loss or liability, only the business is hit and not you personally.
I am oversimplifying it of course, but you get the gist of it. Having an experienced coach or mentor to walk you through this will be invaluable.
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I understand the point of an LLC. The question is what would a business lease look like, and what would business insurance look like.
Your LLC would need to be generally credit worthy to qualify for a decent lease and commercial insurance is much more expensive, compared to personal insurance. Unless you already have an established business, showing regular income, this isn’t really a viable option. I think it will be more realistic to use umbrella coverage policies to shield you from any massive personal liability.
As always, read the fine print. The lease contract with the lessor most likely excludes this. Your personal insurance policy most likely excludes for - profit commercial operations.
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I had an M4 on Turo …. It was my first experience with Turo … and The first person that rented my car hit curb hard and caused about $7k damage. Turo’s insurance took care of everything without involving my insurance at all. It was fairly seamless … but I did lose my car for almost one month. Needless to say - I never put another vehicle back up on Turo.
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In order to leverage the liability shield the LLC (btw not actually the best choice of formation here) should offer, the business needs to lease the vehicle without you being a personal guarantor. Without established business credit, most brands (which expressly forbid this anyway) will want more money down to cover the collateral risk, and the MF will be higher. Similarly you’d have to underwrite a new business car insurance policy which wouldn’t be eligible for most of your discounts. And since most car insurance in most states is rated based on credit score, a business without one is paying a higher rate. Plus you’d at least have to carry BOP and GL.
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- What they said.
Personally, I would never put up my leased car on Turo for a few extra $$$.
Good luck.
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Which Turo plan were you using?
Some plans I believe claim to cover loss of service.
Did the repair trigger a Carfax?
Will the rates increase, if someone happens?
Does me being a guarantor really pierce the LLC?
If your primary concern here is your personal insurance rates going up, youve lost sight of the forest through the trees.
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It was a few years ago … but I remember that it wasn’t the highest plan … because they didn’t cover my “loss of business” - just the repair. It was a lease … and I am sure it triggered a Carfax. I had it repaired at an M certified repair shop referred by my local dealership. I was nervous that I’d have issues since it was a lease … but no one seemed to care. I turned the car in after a few months with no issues.
I still don’t get why you are asking internet strangers for advice on setting up an LLC. I am sure if you reach out directly to companies that specialize in forming LLCs, they will be able to address all of your questions.
Why not chat with your insurance company/broker? I am sure they will be happy to explain all of this to you.
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Doing this right would require talking to a lawyer, picking the right type of company/incorporation (which will differ by state) and then following all the rules to operate company correctly. It would never make financial sense to do this to rent one or two cars in Turo. For someone with our much in the way of assets, it’s almost certainly a better bet to just wing it. Very low chance of anything happening and if you get real unlucky all you have to lose is your credit for 7 years.
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What about a judgment that collects against future earnings?
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Situation that I am in is that I got on the waitlist for C8 corvette a few months ago and found out I have a baby on the way a few weeks later. Much to my surprise, a C8 is not a great family car so I won’t be able to keep it as my only vehicle.
My thought process now is to try to put it on Turo just to cover my payments and drive it on the weekends. I have no illusion of making any money on it but if I can cover enough to get myself a free corvette I think that’s a win.
I would imagine a C8 is a relatively rare car on Turo and profit margins would be significantly higher than say a Corolla. Might only have to rent it out 4-5 days out the month to cover payments / insurance. Also I won’t be leasing I’ll be financing so I won’t have that issue. Also have no real significant assets so LLC route would be overkill. They can have my crypto. It’s going to 0 anyway lol.
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That’s essentially making money…
Let us know how it goes.
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Seven years is how long a chapter 13 bankruptcy stays on credit report. You are correct that the bankruptcy court would put you on a payment plan for three or five years depending on a few factors but realistically for people not earning much money the rarely have to pay much on the payment plan coming out of bankruptcy.
Moreover, if the renters accident is really bad and you end up owing millions in damages you can probably do a chapter 7 bankruptcy which discharges everything with no payment plan.
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