How to Build a Profitable Turo Rental Fleet with George Madden

We do a market analysis in every single area because it can change. But if we're looking at just the United States in general, what I've seen become the most profitable and how I've built my business, we're talking economy cars here that are older, higher miles, and we're trying to find them for about under $12,000 with everything said and done to have the car ready to go. Because these $10,000 to $12,000 cars are renting for the same amount of money as a $25,000 or $30,000 car.

You don't win by following the playbook. You win by rewriting it. 700 episodes deep with the people who actually built something real. No theory. No fluff. No shortcuts. This is Right About Now with Ryan Alford. Hello and welcome. It is right about now. This is Ryan Offord, your host. Hey, it's all about legendary people doing legendary things and legendary business advice. We cover things that you've heard of and legendary people doing something that you probably know what it is. And you're like, damn. How did they do that? And then there's stuff that you're like, I've heard of that. Seems like an interesting side thing. What the hell? We're talking to car rental coach. He is George Madden. What's up, George? Hey, how's it going? Great to be here.

And he was taking on investors and growing his fleet. This was in the evening time. I may or may not have had a glass of wine or two. And I saw him and I thought, oh wow, there's more competition because at that time I was the largest in Pittsburgh. And now I finally saw somebody else. I'm like, okay, he can work an ad on Facebook. He might be somebody. Competition coming in. So I filled out his survey to see as if I were a client. He ends up calling me. We start talking about business. I was transparent. I let them know that I have a fleet. I wasn't spying too much. But I said, hey, come on down to our car lot one day and let's just meet and see what you're doing.

So we both started talking about our goals with growing the rental car fleets. And we had two completely different clientele. So I didn't feel weird sharing information with him. He was dealing with airport guests. I deal with like 90 percent local people. I love competition, you know? Yeah, yeah, exactly. I'm always about working together. But then we started talking and I said, do you get messages from people all the time asking you how to start this business? Because at this point, I had family members, friends, and then, you know, random people from high school from 12 years ago that I barely talked to saying, how are you renting these cars? Because I was sharing the rental business on social media. I started helping a few people for free.

He was doing the same thing. And at that time, are you familiar with Alex Hermosi? Yeah, I know Alex. Alex. I started reading his books and gym launch where he had a bunch of gyms. Then he decided to turn that into an educational business, teaching other people how to do it. We decided to follow a similar suit and we started car rental coach to help other people start and scale their car rental business while building ours. Because I've always been somebody heavily involved with mentorship. I've been to acquisition.com for their workshops. When I first started Turo, I paid a guy in Phoenix, Arizona that I still am in contact with now. And he mentored me. I saw a lot of value in that and what we do, we help everybody overcome mistakes.

We help them get set up with the proper insurance. We make sure that they're picking the right cars. So we do a full market analysis. We do weekly coaching and group calls with our community so everybody can learn from each other. We give best insurance practices on how to handle a claim, how not to panic, how to make sure that you're receiving every single dollar you're owed. We set them up with the right tracking system, the right hardwired trackers in these cars. So when they're stolen, Because it's not if they're stolen, it's when they're stolen. We're able to get this car back as fast as possible and put it back on the road making money. Because time on the road being rented in this business is number one.

And then number two, the fact that it's actually a business that can be done effectively if you know the right way to do it. What we really like with Car Rental Coach 2, I'm a believer in courses. I love them. But we put out pretty much all that information for free on YouTube, what other people charge for in courses. And we specialize on one-on-one personalized training. So you're getting on calls with either me or one of our other coaches who have also built successful rental car fleets. And we're working together on a custom plan. We're getting on weekly calls. And no two people are alike. Everybody's at different starting points, has different goals. I've had NFL players that I've worked with where they're just doing this because there's such tax deductions on rental cars.

They're going to take care of it. I'm sure there's like these common barriers that probably most people have. How would you sort of go, that's fear, not reality? I've had clients that have come to me. They've wanted to start with a couple million dollars and just buy hundreds of cars to start right off the bat. And I always like to realign expectations and tell them that's not a good idea. I want to see them scale. I want them to do well. But I always say start with under 50%. five cars. One to five cars really isn't that much different to manage, but don't buy a bunch of fixer uppers and not have any of them ready. And then they all sit there and not being rented.

But if we're looking at just the United States in general, what I've seen become the most profitable and how I've built my business, we're talking economy cars here that are older, higher miles. And we're trying to find them for about under $12,000 with everything said and done to have the car ready to go. Because these $10,000 to $12,000 cars are renting for the same amount of money as a $25,000 or $30,000 car. For example, a killer car for me last year, this car brought in over $15,000 in revenue. This was a 2017 Mitsubishi Outlander Sport that I got for $8,300. This episode is brought to you by High Level. Make sure to check out the link in the show notes to sign up for your 14-day free trial.

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You have to speak with your CPA on that, and everybody's situation is different. But there are great inductions with this. Yeah, great deductions with depreciation. But besides that, so my fleet's built out of 2018 to 2022 Hyundai Elantra's, Mitsubishi Mirage's, Kia Soul's, all these cheaper economy cars. I'm hearing all the secondary cars. I'm not hearing Honda. I'm not hearing Ford. I'm not hearing Chevy. I'm not hearing Toyota because those carries too much value. I do have two Honda Accords, but I'll only buy them if I can buy them out of steel. Usually they're 30 to 40% more than an Elantra. And the thing is, they go for around the same amount of money. And I'm all just looking at return on investment because we're not putting these on there to rent for the next 10 years.

So this is insurance that covers the car when it's not being rented and it's sitting there and you're using it for business related activities or employees using it for business related activities. And there's three different companies depends on what type of cars you have and what state you're in for me to give the recommendation. But that insurance for full coverage usually comes to about $100 to $110 a month on each car. And then liability only is usually about $60 to $70. The way you said that, it screamed a little bit like loophole, but not necessarily like embraced. Is that an inaccurate statement of what I heard? It's completely legal commercial insurance. It's just newer products that have come to market in the last two years that never existed before.

So if you were to try to do this on your personal insurance, which a lot of people come to me, they're not set up right, the car's not under an LLC, they're putting it on their personal insurance. If your personal insurance finds out about that, they're gonna probably cancel your policy or what they're gonna do, they're gonna let you keep paying for your policy and then when you wreck the car and have a claim, they're gonna say denied and they're gonna keep all the payments you gave them already because you breached contract. But thankfully, we do have this. I don't recommend people using their personal car and renting it on Turo half the time going back and forth. It's really just buy a car for this.

Maybe if you want to test it out with one or two trips to see if it even works, use your personal. But really, you should have a separate car for this that you're not driving for anything personally related, and it should only be business. And that's how it's set up. And that's how 90% of our clients are at Car Rental Coach. They're doing this. A lot of them build a primary source of income and sometimes just a secondary. We have a lot of people that do well, doctors, lawyers. professionals that are looking for an income where they can even make an extra couple thousand dollars a month with minimum work.

If you were somebody that wanted to invest in car rentals and you wanted to have nothing to do with it and you didn't want to build out all the systems and employees yourself, we actually offer a service that's called co-hosting. What we do, we will match you with people in our car rental coach community that have built very large fleets. We have one partner we refer a lot of people to that have over 50 cars themselves and run a very, very tight ship in Tennessee. They're absolutely killing it. Some of the best numbers I've seen in the United States. People will ship their cars to them. They'll manage the whole thing, I believe, for about 25% of revenue. And then the person that invests just simply gets the check and the tax write-off for it.

And they do every single thing for them. That's an option too. So just to give people listening, realistic math, one of these $10,000 cars can bring in about a thousand dollars a month revenue. Now let's say you pay them 25%. So let's just say two 50 insurance. That's a hundred. So now we're at three 50, just some wear and tear. Let's talk like one or 200 extra bucks. So maybe your bill with them is around 500. You're still getting maybe 400 to $500 a month on a $10,000 investment plus the tax write-off. So it, Makes a lot of sense. You'll hear a lot of these guys online. They're saying, oh, you can make $3,000 a month on an economy car. That's BS. You can bring in about $1,000 a month revenue.

There's $30 to $40 price points. That's where we get at the end of the month, which is still great, great money when you're talking about something that costs this much. Do you help coach people on how you keep your costs low, but you keep your cars reliable? When it comes to expenses with these cars, there's two things that are going to always be expenses. That's going to be tires and oil changes. Obviously there's mechanical things that go wrong, but those are the consistent things. We'll look at discount tires around them. We'll look at used tire shops. It makes a lot of sense to buy used tires. People don't realize that sometimes you can buy them 80% life still, but 50% off. So we're always looking for a deal on that.

A lot of people don't realize you can negotiate with some of these commercial chains when you look at a Meineke or something that you see in all the states. People think, oh, the price that Meineke gives me is final. But if you open up a commercial account with places like this, you can actually negotiate They can call and they have room on all of this stuff. Sometimes it's like 20% lower than what they quote you. They can't say that to you, but then they'll say, let me get approval from my manager and they'll take off 20% off the bill. So we teach them how to negotiate, how to shop around to get the right commercial accounts, and then how to find the right people in their area.