Rental Car Business ( How Much Does it Cost to Open )

what's up youtube welcome to automotive life my name is lucky and today's video is all about what it's actually going to cost to start up a rental car company now this is one of the most asked questions i've ever gotten on the channel and it's very hard for me to do a breakdown because every city and every state is different so i'm gonna show you the breakdown of what i'm actually doing here in las vegas to give you an idea and like i said make sure you stay tuned to the end because i think you'll be shocked on how much it actually costs to get open and now if you could do me a huge favor and smash the like button for the youtube algorithm it helps me find more amazing people like yourselves and enjoy automotive content also if you consider subscribing i post great stuff like this all the time and without any more shameless plugging let's get into the video okay guys this is one of the most asked questions i've ever gotten on this channel how much does it actually cost to start a rental car company now the reason why it's very hard for me to do videos like this is because every city and every state is a little bit different so some of the things i'm going to give you guys breakdown may not be required in your state county or city but i'm going to give you what i have to do here in the city of las vegas and give you some costs behind us at least you guys have a generalized idea of what it's actually going to cost to start your rental car company and make sure like i said stay to the end because i'm going to drop some knowledge on you guys about some of the other things that have to do with your rental car license so the very first thing i recommend is getting your llc s corp or c corp now i recommend you talk to an attorney or your accountant and find out which one is best for you i personally pick an llc that's just my opinion because in this business whether you're in the car rental business or the car dealership business it's not a question of if it's just a question of when you're going to get sued and i recommend an llc just to protect yourself quick example i have a friend of mine that has a rental car company here in vegas he had a car that wasn't even a year old had 20 000 miles customer drove it off the road crashed it did whatever well he told the insurance company that the brakes did not work and he sued the actual uh rental car company so my friend never did any inspections didn't do anything because the car had under 20 000 miles and was still a new car but since he never did any inspections and had no documentation the courthouse decided to back uh the actual customer and the judge awarded the plaintiff 250 000 of monetary compensation now my friend had an s corp unfortunately if you file bankruptcy some of that stuff can still follow you personally so if you file bankruptcy they were going to try to take his house so instead of all that stuff he winded up making a payment plan with the customer to pay him off so i like i said personally recommend llc but like i said talk to your attorney or your accountant next thing we're going to talk about is your lease your actual place that you're going to do business in now you don't need a place like this big um my place right now it can hold about 150 cars and it has a shop in the back and everything else um just for the sake of this video um i'm gonna give you kind of a breakdown of what we pay for as far as rent goes so this place right now for this section we're paying ten thousand dollars a month now the way i'm going to break it up is my car rental company is going to pay five thousand dollars of it and my auto repair company is gonna pay five thousand dollars so as of right now the way we're gonna list this is a five thousand dollar cost for the actual business so um once we get our dealer's license we're gonna go ahead and cut that into a third but as you know when you start your actual rental car company or your business and you get your lease you're gonna have to pay first months last month's deposits whatever the you and the landlord work out so just for the sake of this video we're gonna put ten thousand dollars as a deposit in the first month's rent so we have 500 bucks from the llc and now 10 000 from the lease which is most likely gonna be the most expensive cost that you have now after that we're going to go into the licensing which is required here in the state of nevada like i said some of the stuff is going to be acquired in your state maybe a little bit different maybe called something else but in the state of nevada you need to have your state business license so that is 250 a year so you have to get that after you get your state license you're going to need your county business license that is another 100 250 per year now after you get your county business license the next step after that is getting your city business license that costs you about 150 per quarter so i have to pay that multiple times per year excuse me now one of the things you guys gonna have to learn about is if your business license in your city or state is on a slideable scale what that means is is your business license cost is dictated by the amount of sales that you make so let's say i put on my paperwork that i make maybe twenty thousand dollars for my first year and you turn in your paperwork and the next year they find out that you make 150 000 a year your business license is gonna if not double triple or quadruple so it could be 500 to 1500 per year after that so some like i said states and cities require different things but make sure you learn that stuff before you get started so you know your upfront cost so now that i got my city license and everything done we need to move on to the next step which is your insurance now your insurance is going to play a big part in multiple things as far as you know um you know what you're going to get approved for how many cars you can have on your lot everything else so we get one large uh umbrella policy with three individual policies underneath and i'm going to go through them real quickly the first one is your business liability insurance this covers you if something were to happen let's say one of your customers slips and falls on your location somebody tries to sue you uh you know um your building catches on fire whatever the case is that's what your business liability insurance is for after that you have what's called your garage keepers policy your garage keepers policy covers your vehicles and your equipment so if you have computers shop equipment stuff like that you need to make sure you're covered because a lot of people don't know this and you need to check with your insurance is let's say you have 50 cars on the slot and somebody comes over here is mad at you smashes your car's uh windows with the brick and then catches them all on fire some of your rental car policies will not cover the car if they're sitting on your location they will require you to have a garage keepers policy or your business policy coverage so that's why i have three tiers three layers of insurance now i can literally go on and on about insurances and i can have a six hour video and it's still not enough so by the end of this video if you're not really sure as far as insurance goes go ahead and set up a consulting call with me and i'll go over more of that later or sign up for one of our classes now after you have your garage keepers policy the next thing we're going to talk about is your liability insurance now this is the insurance that allows you legally to rent vehicles out to the general public now this is one of the biggest misconceptions all over the internet and not a lot of people talk about this so i'm going to give you the breakdown so you need this like i said just to do business and you never and i repeat you never ever file a claim against your insurance we've talked about this in a bunch of other videos but i'm still going to reiterate this if this is the first video you're watching you never call on your insurance company for any type of claim so if somebody takes this car and smashes the front end and it costs you ten thousand dollars to fix you get a line of credit or a credit card or you take the money out of your pocket and you fix it because if you didn't do your insurance right and you didn't get your stuff covered you never want to use your policy because what happens is every time you file a claim either every quarter every year your insurance company is going to double triple or if drop you if any of this stuff happens so if you're paying let's say 300 a car monthly for insurance and all of a sudden they're like oh you had a claim last year we're going to raise all your cars up to 800 a month you have no choice but to pay you can try to go shopping but no other insurance company will take you trust me i've seen it happen a million times and if they cancel you the first people they're going to tell is the business licensing department everybody else and they're all going to come after you so it's very very important that you get that covered so you have all that together so like i said the insurance business is very very complicated like i said i definitely recommend setting up a call for that um also there is no nationwide insurance company that does rental cars so i know a lot of people ask me where do i go where do i go you're going to have to take the time and find local insurance business brokers that can find your policies because even my company here that i use only writes for the state of nevada and there's specialty insurance if you rent cars outside of your state so if you live close to the border and let's say there's two other states there you have to make sure that your insurance covers you in different states as well so there's a lot of stuff so like i said when it comes to that you definitely have to book a call or take our classes or something like that because i could spend all day on insurance you never want to file a claim it's very very important that you guys understand that so after that now you have your all your licensing your insurance and everything else your next phase you're going to go into a bond now some states require this some states don't here in the state of nevada you're required to have a 10 000 bond what this bond does is it protects the consumer if the rental car company does something shady like if you charge somebody a thousand dollar deposit and you decide not to give it back because the customer is rude to you the customer has recourse where they could sue you and your bond will pay out the money now once again you never ever want to get your bond company involved because once you get your bond taken away they pretty much put you out of business now your bond is based off of your credit if you have good credit it's going to be fairly cheap i pay 250 dollars a year and that covers not only the bond but it also covers if for some reason i'm ever sued for my bond the bond company will cover the cost of the attorney very important you cover that because a lot of people don't even know about these things we cover a lot of this stuff in the classes as well as if you're starting to get into this i definitely recommend setting up a consulting call because you will get yourself in trouble when it comes to insurance because i could spend four hours making a video and i still couldn't explain it all so it's very important that like i said you take few of these things start doing the research and learn more about it now once you get your bond taken care of and everything is good you're ready to go you take all the paperwork you set up you got your llc your state license your county license your city business license your insurance and your bond in your lease and you bundle that all together and the next step we go to is the dmv now the dmv is going to require me to do fingerprinting and background check which is an additional 250 so now you're gonna have to pay that on top of that so once you pay that 250 dollars they're going to do a background check they're going to check to see if you have any dui's any speeding tickets things like that so it's very important that before you start this process if you have tickets warrants felonies whatever else clear that stuff up you want to make sure that you are squeaky clean when you go apply now they're a little more lenient when it comes to the rental car industry but if you go for your dealer's license that stuff needs to be a hundred percent squared away clean and you need to answer everything honestly when it comes to the questionnaire so if they ask if you have a felony say yes explain why and talk about how you've learned the error of your ways never lie on these applications because they don't really care about the stuff you put they look for all the stuff you don't put so if you like well why isn't this guy talking about the arrest he had two years ago oh it was he he punched a cop and he was drunk boom denied so you don't want everyone to get denied for any of these specialty licenses because that stuff transfers over so it's very important that you be honest with the dmv now once you get the dmv licensing approved through your state now every city and state does not have this so if i'm talking about this and you guys have no idea what i'm talking about it's okay like i said every state every county every city is different but here in the state of nevada once i get my license they're going to give me an eight-digit number and then i'm free to go ahead and start business i open up get running after that you're going to have what's called your software operating cost your management costs so there's a million companies out there that do management software i preferably pick rent centric they're not the cheapest by no means but they are the best in my personal opinion so i would recommend setting up with them it's very important that you have a good software to keep track of not only your maintenance stuff but your actual cars and this is part of your website so once you get all those things together it's going to cost you anywhere from maybe 1500 a year to 250 dollars per month depending on the program so we're going to mark this one up at 250 so now with all these costs encumbered you're looking at just what i'm paying to start this location with zero cars in mind not a single car it's gonna cost me thirteen thousand two hundred dollars just to start now with same thing zero cars my recurring costs per month for this location including um rent insurance software monthly costs is a little over 69 hundred dollars a month now you know it is costly you don't have to start out this big but you got to remember 5 000 of that is the rent for this location for my rental car company so if you find a small little office or a virtual office or something cheap or like i said if you're taking one of our classes or you've seen our online classes we teach you guys how to get free spaces and also piggyback off of other businesses which like i said i'll leave for the class you know but your biggest expense is going to be your rent so make sure you get that in check save as much money as you can and like i said this is with zero cars now i'm gonna make another video here shortly talking about how i get cars and how i do everything one of the things we preach is i don't like to use money because you want to keep your money for operating costs for advertising and just to keep money in your pocket the way we teach you is we actually set you up with business lines of credit so this way you can buy cars on credit it's through your llc it's completely legit you're not doing any of this shady broker stuff anything else like that if you are doing that stuff please stop i will never ever tell you to buy 13 cars under your personal credit because it will absolutely ruin your credit and you'll never be able to buy a car or buy another car or buy a house down the future and you could never build to scale because you're constantly going to be your pti which is uh percentage of your debt or your dti is going to be so out of whack that you'll never be able to qualify for any other type of loan so like i said if you have any other questions please put in the comment section below i'll do my best to answer every single one if you are getting started in the rental car business we do offer consulting calls they are one hour long and they are 250 bucks yes they are not free i don't know why people keep saying they're asking if i can give them a free consulting call i take time out of my date to help you guys so unfortunately i do charge for those but i'll tell you what it's 100 worth it because some of the stuff that we talked about in this video i guarantee a lot of people didn't know and plus once we get on the phone i tell you even more stuff that'll probably blow your mind but anyways thank you guys so much for watching once again please put something down below i'll try to answer whatever questions also smash the like button like i said it helps you find more amazing people like yourselves enjoy automotive content also please subscribe and click the notification bell i'll be posting stuff like this all the time and now that i actually have my location i'm going to show you from start to finish on how i actually do things because there's a lot of people online teaching classes and teaching courses but they don't actually do what they actually sell or teach so i don't want to be a quote-unquote fake guru shout out to spencer if you're watching this you know i've learned a lot through these last few years of what these youtubers are doing and it's the whole goal is to help people with this channel you know yes i do this for a living but i want to actually show you guys that i physically touch cars i'm out here doing this stuff every single day so this way i could stay relevant you know and i'm going to show you how i do it so this way once we get the classes set up here and you guys want to fly to vegas and and set up for teaching you'll actually come to this location and you'll be walking around with us buying cars fixing cars selling cars doing financing doing car rentals doing it all so that's my whole goal is almost making this not only a rental car company auto repair shop and dealership but also a school slash class but anyways thank you guys so much for watching we'll see you next time [Music] um

Channel: Automotive Life

Views: 21,443

Rating: 4.9907622 out of 5

Keywords: turo car rental, turo, turo rental car business, rental car business, rental cars, how to open a rental car business, Car dealership, car rental business, hosting on turo, turo car rental business, car rental, renting cars on turo, turo business, how much can you make on turo, car flipping, flipping cars, cash rentals, cash cars, rental car hacks, can you make money while doing turo, turo business plan, rental car business plan, make money with rental cars, exotic cars, car

Id: 2J37Gsa8bBk

Length: 17min 22sec (1042 seconds)

Published: Mon Jul 05 2021