How To Start A Rental Car Company Using Turo | Using Credit To Self Finance Your Rental Car Fleet.

hey guys this is will rountree your fico certified credit specialist author of two books credit is king as well as full-time ceo the they don't tell you but more importantly i want to take you on this journey about financial literacy the importance of credit how to understand credit and how to get to that money let's go hey guys will roundtree here look i get a ton of questions people asking me look i have great credit uh you know what can i do with it or you know i'm striving to get good credit and i want to know what i can do with it and so you may have heard me use the term or my partner paul thornton leverage everything and so when we talk about leverage everything we're not talking about just frivolously going out there and you know buying up everything just for the sake of because you can when you have great credit but we're really showing you and when we say leverage everything we're talking from a strategy standpoint and i often say we don't have a money problem we have a strategy problem because i know a lot of people who have been able to position themselves to you know make a very good living create a very good financial you know uh safety net or whatever they want to call it all by leveraging their credit and that's where the terminology leverage everything comes from so one of the many many strategies that we've done that we've tried tested and it's been proven is showing people how to leverage their credit to start that rental car business and you know the most common and the most popular is by using toro now you may ask yourself well how can i just start a rental car business what's the benefits uh you know can't someone just go down the street to their local car rental company and all of those things would have been true maybe about six months ago see for those who may not have heard her recently filed bankruptcy and you may ask yourself what does that mean well because hurts filed bankruptcy they own anywhere between five to seven of the major uh car rental places now with that being said what ended up happening is is that that's you know over a million vehicles that they are now taking and pulling from their inventory now you still may be asking yourself well what does this mean for me well what that means have you tried to catch an uber recently you know i mean some of the average wait times especially out here in my local market are anywhere between 15 to as much as 30 minutes to take a a a 10-minute ride and so that's a huge gap in the marketplace and as they often say the best way to become wealthy is to fill a gaping hole in a marketplace and you want to feel it better than anyone else and so one of the gaping holes that's currently happening right now is that there's a lack of inventory of rental cars even private think about it like this you know let's say you live in an area where you know tourism is fairly popular well if there is a shortage of rental cars they have to rent from somewhere or you may have some family coming in town and they can't rent a vehicle or you know like i mentioned the a lot of the uh uber and lyft drivers a lot of them rent their vehicles from the major car rental places but if there is a shortage of vehicles for them to rent from obviously they have to rent from somewhere so there's multiple platforms that you can put your vehicles on now you're saying put my vehicles on we'll only have one vehicle well that's how i'm that's why i'm going to show you how to leverage your credit to be able to get vehicles and start your own rental business now the beautiful part about starting your own rental business first of all you own it and when you own it that means you're the boss you're becoming that full-time ceo you're becoming that entrepreneur and you can do all of this really from the comforts of your living room or if you work you know in corporate america you can do this while you're at your desk or whatever you know you do if you're in the field or whatever all from your cell phone and so i'm gonna give you just some of the basics without really going into some of the high level uh things but i wanna just show you how ridiculously simple this is you know and so the beautiful part about this is that again i'm going to show you how to leverage your credit that means is that i'm going to show you the strategies on how to be able to get the vehicles pretty much with no money out of your pocket that's right no money out of your pocket and you're asking yourself well will what kind of vehicle can i get with no money out of pocket really pretty much whatever see this is the thing whenever you go to a dealership obviously you know you can purchase a vehicle if you have to guess what's the minimum credit score needed to purchase a vehicle it's actually about a 500. now a 500 credit score may not get you much you're going to have about a 29 interest rate now obviously you know mathematically this would not be the best scenario for you to go and leverage your credit to go and purchase a vehicle and go out there and try to start a luxury car rental line or even just start a rental business period and so this is why having good credit is important of at least a 680 excuse me to a 700 credit score or 700 plus you want a minimum of 680 because this is what starts to happen when you have a 680 which is actually fair you want to get closer to the 700 before you get to good you i'm gonna show you what you can do to be able to get the vehicle with no money down that's right no money down see this is the thing guys when you have great credit and i like to use the term great because even if you're at good the goal is to get to great and a lot of times it's just about time and being patient and all of those things but see when you have great credit you can go to your own banking institution get pre-qualified go to the dealership of your choice and then you pick the vehicle that you want to purchase this is what this looks like see when you go to a dealership here's the dealership okay i know the roof is crooked but just follow me all right so you go to the dealership you see the cars i really am not a drawer all right whatever type of car you want this to be you go to the dealership if you have decent credit fair credit good credit what they're going to do and this is something that they don't tell you the average dealership can run your credit anywhere between seven to 15 times per application seven to 15 times per application so the lower your credit score the more times they're going to run your credit so if you have a below fair credit score and you go to three dealerships that is now 45 times that they ran your credit which is going to cause hard inquiries and as you probably learned from some of my previous videos a hard inquiry especially when they become excessive can drop your credit score but what i want to show you is that when you go to this dealership with good credit again 700 plus not only can you minimize the time that they run your credit but you're also going to get a lower interest rate now let me show you the strategy that i like to show individuals who i work with personally to where not only is going to save them from getting the the number of credit applications because the main reason the car dealerships run your credit you know multiple times one is they're shopping your loan see when they're shopping your loan or is the term you shot gunning your application they're looking for a bank who's going to give the best rate because typically this is what happens let's say you find a vehicle for twenty thousand dollars okay the ba the dealership is shopping your loan or your application but the bank is only willing to finance 16 000 you have to come up with the difference which is how much four thousand dollars this is typically where the down payment comes in at because the bank will not finance the entire vehicle amount usually based upon the risk and that risk is assessed based upon your credit score and typically when you have a down payment of that amount again you're going to have a higher apr and your percentage rate or most commonly referred to as an interest rate the interest rate is literally what makes the payment true story in 2008 i needed a vehicle i had just recently had two vehicles repossessed prior to uh i needed a vehicle and i bought a vehicle for eight thousand dollars i think it was like a chevy envoy or something like that after all of the interest and everything uh it was a three-year loan my payment uh excuse me the total i would have had finance came out to about 14 000 again keep in mind this was a 8 000 vehicle i had a 36 month loan my payment was 400 plus dollars per month hopefully you guys are following this eight thousand dollar vehicle my payment was four hundred dollars because the other thing is when you go to the dealership with challenge credit not only are they going to give you a higher interest rate but they're going to short shorten the time you have to pay them back and when they compress the amount of time you have to pay the vehicle back typically that is what drives the payment up so a lot of times i know people are scared to get into newer vehicles or more reliable vehicles because they're scared of the payment well how do you avoid that you improve your credit score now and this could be a whole another strategy session but in this case if i would have known then what i know now if i would have had to settle for this i would have just improved my credit went back to refinance and then get a lower payment but you know we'll talk about that on another video right now i'm going to show you how to start your own car rental business okay so you have great credit you go to the dealership you see the vehicle you like you say you know what i like this vehicle right here you get the all of the you always ask what is the out the door cost of that vehicle out the door meaning the purchase of the vehicle car or suv you want taxes title all of those things so they're going to give you the out the door cost of that vehicle now another thing is is because i'm going to show you how to get this vehicle no money down a lot of times when you're not using the dealerships financing there's a little bit of negotiation or wiggle room on the price because it's almost as if you're coming in with cash not cash from your pocket but cash from your personal bank this is what this looks like so you go to your bank typically i like credit unions the reason i like credit unions is because one they are smaller banks uh and they have to figure out a way to be competitive so the best way for them to be competitive is they're going to be competitive with their rates so they may say for vehicles in a certain range meaning you know the age of the vehicle they can go anywhere from 0 up until 3.9 or 4.2 and a lot of times it depends on the the loan to value ratio i mean they have their own equations but you can actually get pre-qualified before you even start shopping so if you have a ballpark figure of what you want to spend so let's say the vehicle is about 35 grand you contact your bank your credit union and say hey i want to get pre-qualified for a vehicle for 35 000 and they're going to pre-qualify you and they'll give you your terms okay so now once they come back and approve you you have a check waiting for you for 35 000 to spend literally okay all you have to do now is go and pick the vehicle now the check or that approval usually is good for up to 60 days depending on the the bank up to 60 days so now go to the dealership you find the vehicle you want you found the vehicle and the out the door cost let's just say came out to 33 000. okay no you cannot pocket the other two okay the bank is only going to cut the check for the 33 so you know i just want to because i've had a couple people ask well can i just get some half of that and get the rest no you they're going to give you the the amount of the check for whatever the vehicle is but typically what i tell people who i work with is you always want to ask for more than what you think you're going to get approved for just because you may see a vehicle that has more options than the other one and you're about three thousand dollars short so you always want to have that buffer not saying you should go and spend it but i'm just saying you never know you know you may want to have gap insurance well you want to make sure you have enough to cover that gap insurance and for those who don't know what gap means or gap insurance that's the gap between what the vehicle is worth based upon what the insurance is willing to pay out in the event of a total loss so if you bought a vehicle for 35 but the vehicle is only worth 30 you have to come up with the other 5 000 but if you have gap it's going to cover that in between and a lot of dealerships will allow you to finance that which is why if you know the vehicle is going to be about 30 grand always ask for about five to seven thousand dollars more again it doesn't mean you have to use it all you just always want to you know my grandmother once told me he said she said will if you want to borrow five dollars ask for 25. that's just the rule that i've always lived by so understand you found the vehicle for 33 000 okay you go back to your bank you tell them i found the vehicle it's 33 000. the bank is going to ask you now for a purchase agreement purchase agreement once you get that purchase agreement the dealership can either fax it to the bank or you can grab it from them take it to the bank the bank is then going to cut you a check for the 33 000 you take that 33 000 to the dealership and then you go to the dealership and buy that vehicle cash but because you told the dealership you were buying it cash you may have been able to negotiate and save about another thousand dollars off that vehicle so now you're only paying 32 000 which means the the payment is going to be even lower so you asked for 35 they told you the out the door cost was 33 but because you came in with a check which is like cash to them they say you saved an additional thousand dollars because typically when you buy a newer vehicle brand new there's less negotiation of wiggle room but the used vehicles typically you know i once uh bought a vehicle that i put on my you know rental car line and i was able to save as much as six thousand dollars just because i brought them a check see this is the power and why you want to have access to this information because these are the things the dealership won't tell you usually the largest markup is on used vehicles when it's a brand new vehicle there's less margin now sometimes they have rebates but for a used vehicle typically you know it's a huge markup so you bought the vehicle for 32 000. now let's say your terms on that vehicle is 60 months which is five years okay 33 000 you have a good interest rate now just for the sake of making this math easy let's just say your payment is 350 a month okay not saying that this is what the payment is i'm just for the sake of this example okay now you have your first vehicle you're going to go and set up your your car rental business okay you can put it on toro for whatever you know first of all when you put in the vehicle on toro you want to do your homework and seeing what the average cost per day that someone can rent this vehicle for you from you for okay so let's just say the average cost per day is 100 a day okay on average there's 30 days in a month so if this vehicle was to rent every single day for the month you would make remember your monthly payment is only 350. that's the power of this and that's on the low end now you may ask yourself and i know the numbers are off but i just want to give you some some kind of basic round numbers now let's just say and you're asking yourself well will what if someone crashes the vehicle what if you know it's theft what if they damage it what if they scratch up the seats all of those things see the beautiful part about toro is that when you list the vehicle with them they have an insurance that's already baked into the cost of what you are getting paid per day and they have different levels and so let's just say you have the premium insurance and so what that usually means is they may take out a percentage of whatever your daily amount is so let's just say the percentage is uh and i'm just guesstimating a 70 30 for the premium insurance the premium insurance usually will cover you for uh let's say your vehicle is in a shop due to a driver you know having a small fender bender they'll actually pay you for any recruitments or any lost time your vehicle is not on their website let's say you know you have to get some uh there's a wear and tear in the vehicle there's a rip somebody punctures a hole in the back seat it's covered you know now let's say they bring your vehicle back just dirty you can up charge them for a detail let's say you require them to refill the gas tank after each use and they don't guess what you can build them for the gas that is going to cost you because every single uh driver or renter has to put a credit or debit card on file they uh verify that it's a legitimate person who has a driver's license they do all the grunt work see the biggest thing or the best way to run a business is to have a system see toro already has the system in place all you have to do is plug in and once you plug in because you've put yourself in position to be able to go out there and get the cars now you can become profitable immediately so again you bought a vehicle no money down no no money out of pocket brand new off the lot still got the fresh car sent uh they put the dressing on the tires all that good stuff you got a good interest rate a low payment you're putting the vehicle on toro for a hundred dollars a day okay even if they only rented the vehicle let's just say five times out the month the the whatever you make from toro is at least servicing the debt i want everybody to write that down see this is the thing about business this is the thing about business that i want you to know a lot of times people think in order to be successful in business you got to spend 100 and make a million first of all that's not even believable the biggest thing in business is if you can see at least a seven to a seven to ten percent return on your money you're killing it think about it where can you go right now and get a seven percent return on your money legally and ethically where can you go think about it you put your money in the bank is point zero zero zero eight percent you know the stock market yeah you may get a five to twelve percent return but that's over a ten year gap we're talking today you can put your vehicle on toro or you can leverage your credit today and go out and purchase a vehicle purchase multiple vehicles get your partners and you guys all chip in and purchase vehicles and start reaping a a return roi these are terms we need to know getting an roi on that vehicle immediately all you need is a minimum seven to ten percent return and so again you you want to get in the habit of knowing these terms roi return on investment debt servicing so your remember your payment is 350 a month okay let's say the vehicle only rent four times a month okay four times a month that means somebody rented it one day uh per week four times out the month that's fourteen hundred dollars okay let's say after all of the insurance fees and everything out of toro uh just for the sake of math you brought home 900. okay but remember you only your payment is only 350 a month think about that that's a profit you're profitable so imagine if you had three vehicles doing this you know somebody may say well will what if i want a luxury vehicle okay so true story i had a client who went out and purchased a luxury vehicle his monthly payment was 1 000 a month now somebody may say well why would i get a vehicle for 1 000 a month everybody has different levels you know you can go buy a 5 000 car or a quarter of a million dollar vehicle all with no money out of pocket the strategy doesn't change but for this example he bought a luxury vehicle his payment was one thousand dollars a month think about it a thousand a month he rents the vehicle for fifteen hundred dollars a day the vehicle rents let's just say an average of four days out the month that's six thousand dollars now i dropped out of college but one thing i could do is add and i know that six thousand dollars is way greater than a thousand dollars so he's able to service the debt every single month now i'm not telling people to just frivolously go out there and purchase vehicles but what i wanted to do was just show you a strategy to put you in position to start a business that now you can start receiving a residual income because remember at the top of this i told you we're showing people how to do this from the comforts of their living room all from the palm of their hands their cell phone we're on our cell phones every day anyway we can show you how to protect the vehicle how to start and unlock it all those things right from the cell phone to where they pick up the vehicle and soon as they drop it back off the money is deposited into your bank account within less less than 24 hours so imagine being able to start a business literally with no money down and being able to profit to profit immediately all from the comforts of your home now you also heard me mention well uber lyft and all of those things check this out when uber and lyft drivers rent vehicles they rent by the week so the average vehicle that they typically rent is like let's just say a a compact sedan okay so a compact sedan you know uh used may run you about 17 000 you know for something decent now your monthly payment on a 17 000 vehicle let's just say is uh you know 250 a month again and i'm just making giving ballparks i'm not saying that these are the actual numbers but just giving you ballparks think about it the average uber or lyft driver has to pay by the week when they go and rent from the major car rental places but we remember they took over a million vehicles off the road so what happens is now they have to come to you to rent that vehicle and now they're paying you let's just say 200 a week okay usually they keep these vehicles long-term because this is how they make their money so if there's four weeks within that month you've made 800 from a vehicle where the debt service is only 250. that's a profit that's how you see your roi and all you have to do is duplicate this several times over so hopefully you guys have learned something hopefully you guys see the benefit and why you know this industry is is booming because of the power of all leveraging your credit but it all starts with understanding that you want to have great credit and if you don't no worry your credit can always be rebuilt restored repaired all that good all that good stuff but more importantly it's just about having the mindset and putting yourself in position see i talk about the three ps you want to be in position to have the power to purchase and once you're able to purchase now you can go out there and get a return on your investment and then truly position yourself to become wealthy because the only way you can become wealthy is by having passive income meaning you're able to make money when you're not doing anything and that's the power of positioning yourself to leverage your credit to start your own car rental business so again guys hopefully you guys enjoyed this video make sure you click the link below subscribe comment share all that dope stuff and again my name is will rountree and i'll see you at the top

Channel: Mr. Will Roundtree

Views: 148,905

Rating: 4.9268446 out of 5

Keywords: how to start a rental car company, how to start a car rental business, how to start a car rental company, how to start a luxury car rental company, how to start a luxury car rental business, turo app how it works, turo as a business, turo car rental, turo car rental business, turo car rental review, turo owner review, turo remote key handoff, turo car rental how does it work, turo rental business, turo renting your car, turo review, turo sign up, turo unemployment

Id: MFtD-AIEKQc

Length: 25min 22sec (1522 seconds)

Published: Sat Aug 15 2020