Turo, Karshare and carsharing in general

[simon_g]

Can definitely see the case for renting good “holiday” family cars as people stay in the UK (taking lots of stuff with them) rather than getting a taxi to the airport.

I think most people shop on price so no point going fancier than a Zafira or similar.

[Gavster]

You're right, people definitely shop on price first, therefore a BMW is an unnecessary luxury that few people are willing to pay extra for. That's why my car rents when the price is low, because it's then competing with Insignias and is an easy choice.

I know a guy who's doing really well on the platform running cars which he's picked up as bargains for a few £k. My ego really doesn't like Zafiras because they scream 'unlicensed cab', but they're incredibly good value to buy and cheap to run, which means profitable too.

[Sundayjumper]

What about hybrids ? You’d expect them to be popular in town or are they too expensive to buy in the first place making the rentals not profitable ?

[Gavster]

I've only looked briefly, but my initial reaction was the cost of buying a Prius didn't reflect good value in relation the daily rental price. Full electric cars like the i3 and Tesla 3 also seem to be the same, although Turo are actively pushing for hosts to buy these cars as they're good for their marketing.

[Mito Man]

Maybe the sweet spot is a premium brand but high miles. Ideally electric as they don't suffer from reliability with mileage and need no servicing or tax plus most of the depreciation is done. Then you can also undercut everyone else so the car is booked way more and still take home more money.

[Gavster]

Maybe the sweet spot is a premium brand but high miles. Ideally electric as they don't suffer from reliability with mileage and need no servicing or tax plus most of the depreciation is done. Then you can also undercut everyone else so the car is booked way more and still take home more money.

Even then it still doesn't work out well. An I3 on Turo rents for £40-60 a day but would cost at least £12k. I'm discovering that the sweet spot is when the daily rental price = purchase price/100. On that calculation an i3 would need to rent at £120 a day.

[Jobbo]

With an electric vehicle the hirer can't easily fill it up before returning it. Looks like a practical issue.

[Simon]

Really? They'd have stopped for a toilet break/weekly shop anyway...

[Shlergen]

I know this is purely a financial decision but a Nissan Juke is up there with the worst cars I've ever driven.

Ford alternative ?

[KevH18]

I know this is purely a financial decision but a Nissan Juke is up there with the worst cars I've ever driven.

Ford alternative ?

EcoSport?

[Shlergen]

never had the pleasure. Look horrid mind.

[Gavster]

This is what gets the decision making into trouble when people rent, 99% of them just want a car for £<insert budget> per day. They don't have much opinion on car type or handling. I need cheap cars and to hell with the handling

[Gavster]

Having re-crunched the numbers, a Vauxhall Zafira Tourer with an initial purchase price of £7k would make £1k more profit over two years than my 4 series which cost £12k, that's factoring in depreciation too. The BMW still makes money, but I need to get over my tunnel vision about wanting a 'premium' car on the platform so that I can increase the ROI.

I was wondering why people have cheap supermini cars on the platform, but now I can see why, because depreciation is the biggest cost.

I'm going to run the numbers on a bunch of other cars now, focussing on vehicles that are cheap to buy in the 6-8 year old range.

[Gavster]

What the best way to estimate depreciation on a car? Running more numbers on Turo cars is showing that calculating the depreciation as accurately as possible is really key to finding a good car.

For instance, if I bought a 2014 Vauxhall Zafira Tourer today for £7k with 50k miles on the clock, what would it be worth in 2 years with 110k on the clock?

I've been using the free AutoTrader tool here https://www.autotrader.co.uk/cars/valuation and doing two valuations, e.g.

2016 Vauxhall Zafira on 50k miles
2014 Vauxhall Zafira on 110k miles

In theory the difference between the two prices should give me a ratio of the expected depreciation.

[Sundayjumper]

That’s exactly what I would have done as a starting point.

But remember advertised prices aren’t necessarily selling prices. EBay will give you completed prices for bottom-of-the-barrel stuff.

Also factor the cost of buying from / selling to a dealer vs. private sales. You *probably* wouldn’t be able to sell it on at a retail price so avoid buying from a dealer in the first place if at all possible. There’s probably at least 10% just in the dealer margin.

[Rich B]

Why would starting with a 2016 work if you're buying a 2014 car?

[Jobbo]

The best way I’ve found to avoid depreciation is to buy at a good price. Often meaning no warranty and some money to spend on repairs, so there are the roundabouts to go with the swings.

With used car prices as they stand currently I don’t see how you can avoid a depreciation hit in 2yrs’ time, when supply and demand gets more back to normality.

[Gavster]

Why would starting with a 2016 work if you're buying a 2014 car?

I was doing that on the BMW because it was released in 2013 so I couldn't choose a 2014 and 2012 version to compare. For the Zafira I could do 2014 to 2012.

[Gavster]

The best way I’ve found to avoid depreciation is to buy at a good price. Often meaning no warranty and some money to spend on repairs, so there are the roundabouts to go with the swings.

With used car prices as they stand currently I don’t see how you can avoid a depreciation hit in 2yrs’ time, when supply and demand gets more back to normality.

Buying cheap makes a lot of sense, because any money saved on purchase price becomes more 'money in the bank' at the end of the vehicle's term. It's also true, this bubble is concerning, what would the correction be? Are prices 25% up at the moment?

[Gavster]

That’s exactly what I would have done as a starting point.

But remember advertised prices aren’t necessarily selling prices. EBay will give you completed prices for bottom-of-the-barrel stuff.

Also factor the cost of buying from / selling to a dealer vs. private sales. You *probably* wouldn’t be able to sell it on at a retail price so avoid buying from a dealer in the first place if at all possible. There’s probably at least 10% just in the dealer margin.

I might need to start scouring for eBay bargains