# Considering starting a Cheap Car Rental Fleet with HyreCar



## occupant (Jul 7, 2015)

With Uber backing out of Enterprise rentals and XChange car leases, there needs to be a way for all these broke Rideshare drivers to get into a car. Hertz is only offering rentals in select cities, and even Lyft restricts the availability of these cars.

I can only cover Columbus, my local market, but I'm thinking why go the route of a nice fresh new car when Uber allows all the way back to 2002 and Lyft to 2005? There are thousands of $1500-$2500 used cars out there that are clean and decent and would make good rideshare vehicles.

HyreCar in my area only shows 2-3 vehicles for rent. A 2010 Fusion for $300 a week, a 2012 Nissan Rogue for $350 a week, and a 2014 Kia Optima for $380 a week. As Marshall Lucky said, that price is TOO HIGH...

I also want to offer a "Rent To Own" Program to beat all the tote the note lots. Rent the car for six to nine months and I'll apply half what I earn after HyreCar's cut towards the vehicles fair market value using Edmunds Private Party "Clean" value most likely.

I'm thinking of starting out small and working my way up. I would buy vehicles that I could rent out for up to a full year before selling, so they would need to be good for Uber and Lyft and that means 2006 or newer at the moment. HyreCar takes 15% from what I've seen. So here would be my pricing structure

Small Cars like Cobalt, Elantra, Focus, Sentra, Civic, Corolla would be $240 per week (I make $204)
Midsize Cars like Malibu, Sonata, Fusion, Camry, Altima, Accord would be $280 per week (I make $238)
Small SUVs like Equinox, Santa Fe, Escape, Rogue, CRV, RAV4 would be $300 per week (I make $255)
3-Row SUV and van like Explorer, Durango, Pilot, Highlander, vans would be $320 per week (I make $272)

Select qualified vehicles would cost more, probably be a long time before I'd have one too.
Cars on their last year of Lyft ('05 at the moment, '06 starting March '18) would be $20/week cheaper.

I figure start with one Cobalt and save up money until I pay myself back for its purchase and initial startup cost. I'm thinking 8 to 10 weeks will do for a $1500 car. Then buy a second small car and get back to saving, maybe 6 weeks this time. Then buy the third car as a midsize and save for 4-6 weeks. Fourth car midsize. Fifth car a minivan. Then if everything stays rented all the time keep buying cars until I always have one or two sitting idle. Then those are the cars *I* drive for rideshare until they get rented out.

If all goes well and I'm not replacing transmissions and engines on a weekly basis, I should be able to get to a point I'm earning $2000 a week with about ten cars on the road. I'll have a cushion saved up for unforeseen repairs. As the vehicles get bought out by long term renters, I'll have the money to buy more vehicles to rent out if the demand stays strong. I can put a third of the money away to cover taxes. I'd definitely run it under my wife's LLC.

There are other concerns.

What if a driver steals the car? I would hide a cheap $20 prepaid Android phone up in the dash, hardwired to a charger from the back of the fusebox, set to complete silence and darkened screen. It would be stripped down to an absolute minimum of apps and basically be set up with my Google Device Manager so I can ping its location easily. A Boost family plan for each group of five cars would cost me $27 per month per car ($135 for 5 lines 3GB data each) Ting and Mint might even offer cheaper possibilities here once things get busy. Professional GPS trackers cost more than this but they would also offer starter interrupts which are SO much easier to put on older cars. The wiring might even already be there from a prior note lot sale?

What if a driver breaks down in the middle of a fare? Well, the passenger can call another ride. If I have another car and trust they didn't tear it up on purpose, I could switch them out, but not sure how quickly HyreCar would respond to update things. If I don't have another car, I'll at least run by, get the tow set up, and give them a ride home or to wherever their other vehicle is if they parked it.

What happens if the driver wrecks the car and refuses to pay the deductible? Well, they won't be working, and I'm out the purchase price of the vehicle. That's why I'm looking at cheap cars. Once I have a feel for things, I'll be able to tell which drivers are qualified and trustworthy enough to let take a higher end vehicle.

I'm wondering too how the insurance would work. Uber and Lyft cover while transporting or en route to passengers. HyreCar is supposed to cover Periods 0 and 1 for renters. I would need personal liability for times I am driving the car to and from and to maintain registration for the state. I don't think carrying full coverage would help here since a) I'm not driving it for rideshare, b) even if I was the car isn't worth enough to pay full coverage premiums, and c) if they are driving it should be HyreCar or Uber/Lyft covering the damages. Of course these cars are worth less than the Lyft deductible so if it gets totaled it's just getting scrapped.

Maybe I should stick to renting one kind of car. Use a Cobalt or Focus or whatever to start out and then buy only 2008-2012 Malibus, or 2007-2012 Altimas, or all the same somethings. All the same colors. All the same engines. That way if one DOES get wrecked or becomes no longer roadworthy or running, I can salvage parts from it for the other cars...hmmm...ideas ideas ideas...and if two get wrecked in different places I can at least fix ONE of them without spending several grand at a body shop.

When all is said and done I'd like to have about ten cars on the road. Two small cars, three midsize, two minivans, two SUV's, and one Select car. And then I'd build from there. Maybe consider adding cars in other markets like Dayton, Cincinnati, and Cleveland.

A person with twenty grand burning a hole in their pocket looking for an investment opportunity might consider buying a fleet of Craigslist beaters to rent out for cash flow purposes. I may not have that sort of money right now but I will.

Any other ideas? What else am I missing? Anybody have a fleet built up already? I'm already called the King of Cheap *** Cars by friends and family, I might as well make it a business...


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## Uberyouber (Jan 16, 2017)

Lmao!


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## Recoup (Jan 30, 2017)

Maybe I'm missing something, but are you considering putting these cars on your personal liability insurance? If so, you're nuts. Imagine three or four of those 20 cars making claims. Now you have 3-4 wrecks on _your _insurance--your premiums skyrocket. (And don't you think the insurance company will get wise?) You're talking about a commercial operation; you need commercial fleet insurance. That's gonna eat into your profit big-time.

One of my (very part-time) side gigs is that TTA Appraisal thing where I go out and take pics of wrecked cars for a flat fee plus mileage over a certain distance. Fully half the cars I see are wrecked rideshare cars. That should tell you something...

(I could be wrong, but I think rideshare and/or Hyrecar liability insurance is secondary to your own insurance. I'm pretty damn sure that there is no comp&collision insurance at all from the rideshare companies unless you carry a personal comp&collision policy.)

I'm not an expert, just my thoughts on your bizplan. Corrections (if sourced) welcomed.


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## occupant (Jul 7, 2015)

Recoup said:


> Maybe I'm missing something, but are you considering putting these cars on your personal liability insurance? If so, you're nuts. Imagine three or four of those 20 cars making claims. Now you have 3-4 wrecks on _your _insurance--your premiums skyrocket. (And don't you think the insurance company will get wise?) You're talking about a commercial operation; you need commercial fleet insurance. That's gonna eat into your profit big-time.
> 
> One of my (very part-time) side gigs is that TTA Appraisal thing where I go out and take pics of wrecked cars for a flat fee plus mileage over a certain distance. Fully half the cars I see are wrecked rideshare cars. That should tell you something...
> 
> ...


Recoup, it's my understanding that HyreCar's insurance covers ALL use by the renter. The claim would go through them, and the deductible for repairing MY vehicle would be $2500. That's why I'd only buy cars under that amount. They would collect from the driver and they couldn't rent any other cars until they pay that deductible or portion thereof. So the insurance *I* would need would only be when I'm operating the vehicle, driving to or from the renter's location or meeting spot, taking it to get the oil changed, tires rotated, making repairs and test driving on my own time, things like that. So that would add about $60-$65 a month to my current policy, per vehicle. If I wanted to use the vehicle myself also for rideshare during times it is not being rented, I would add the same rideshare addendum on my current vehicles. That adds about $20-$25 a month. I'm paying $188 a month for FULL coverage on a '10 Malibu and '17 Corolla now. So it might be even less than my estimates since I'd be unlikely to put full coverage on a ten year old car I won't hardly use.

I do plan on getting quotes for full commercial rental insurance if that's something even available to an individual. I'd hate to incorporate for this purpose but if it lowers the rates enough then maybe it'd be worth it.


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## Dammit Mazzacane (Dec 31, 2015)

Suggest starting by putting your extra car -- either the Malibu or the Corolla -- onto the HyreCar platform first before acquiring any vehicles.


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## Mars Troll Number 4 (Oct 30, 2015)

I wouldn't do it...

People will treat your car like absolute garbage.. the customer and the driver alike


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## rickasmith98 (Sep 26, 2016)

See no good of coming from this but am sure other entrepreneurs that made millions were told the same thing at some point. While I don't think this is the idea that will turn yo into a kazillionaire, if you do go down this path consider this. Do an LLC or sub chapter -s corp to limit your liability. All commercial insurance and vehicles, permits etc, would have to be issued in that company's name. Then at least your personal assets would be protected...something our assets are not as rideshare drivers unless you all have commercial insurance or rideshare hybrid insurance.


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## NUBER-LE (Jul 21, 2017)

A 2,500 dollar car and doing UBER would be down alot. Maint and stuff breaking, nawwww.


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## Dammit Mazzacane (Dec 31, 2015)

I wonder:
OK, if your car gets into an at-fault accident, could you be in any manner liable for the crash?

Driver: "Well uhhh the brakes jammed and uhhh..."
Attorney: "Well why didn't you fix your brakes!"
Driver: "It's not my car!! It's this dude's car! I rented it!"
Attorney: "Mmmmmmm someone with bigger pockets... I like it...."


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## azndriver87 (Mar 23, 2015)

you'll be ****ed if the people refuse to bring it in for maintenance.

but i'd say start with $5000 cars, go with honda Fit, Nissan Versa, or Toyota Yaris, rent them out for $300 a month.


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## Dammit Mazzacane (Dec 31, 2015)

Agree - you'd need to have downtime on the cars to ensure you budget and spend for maintenance. Sort of like a taxi company.


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## JeepluvJeep (Dec 16, 2017)

I'm looking for the same time off deal as OP specified. Anyone know someone from Socal with same idea?


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## RangerBella (Nov 29, 2017)

Hey man if you want to do something like this......go for it. A fact of life is that the vast majority of people dont want to see other people succeed. I'm not sure if its being jealous or what, but misery loves company. Many, many, many people said the same thing to people wanting to invest in Bitcoin. The Bitcoin folks are the ones laughing all the way to the bank. I wish you luck with it.


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## Edin (Sep 26, 2017)

I might be looking into getting a car to test out Uber/Lyft, I might check you out when it's all over and done. You should consider off platform car renting; you don't need Hyrecar to get customers, everything else is straight up fleet management. I live in Cle btw.


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## oldfart (Dec 22, 2017)

They say most of the California gold rush prospectors never struck it rich. The guys that made the real money were the ones that serviced the prospectors; guys like Levi Strous who sold blue jeans

I see this idea as pretty much the same thing.

I think I would look into selling the cars rather than leasing them just like the “buy here, pay here”. used car lots. I don’t think you can make $300 a week per car this way but buy a $2000 car, sell it for $5200; $100 down and $100 a week

20 cars, will cost about $40000 (if your numbers are right) and at the end of the year you will have just over $100000, or a $60000 profit.

No worries about breakdowns and liability it will just be a matter of collections. But that will be a problem no matter how you structure things


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## Recoup (Jan 30, 2017)

oldfart said:


> I think I would look into selling the cars rather than leasing them just like the "buy here, pay here". used car lots. I don't think you can make $300 a week per car this way but buy a $2000 car, sell it for $5200; $100 down and $100 a week
> 
> 20 cars, will cost about $40000 (if your numbers are right) and at the end of the year you will have just over $100000, or a $60000 profit.
> 
> No worries about breakdowns and liability it will just be a matter of collections. But that will be a problem no matter how you structure things


I think you're vastly underestimating the risk. I do a little side work for an insurance company, photographing damaged cars for the assessors. You'd be surprised at how many horribly bashed-up cars have a case number that begins LYFT...

Do you know why insurance companies are allowed to charge higher rates to people with bad credit (your target audience)? It's because there is a statistical correlation between bad credit and higher accident claims. (Disclaimer: Correlation does not imply causation, but who cares what the cause is? The correlation is real.) Yeah, they have to have insurance, but if they're not driving, they're not gonna pay you. Or else they bring the car back to your lot, bashed to $h!t, and says "I'm giving it back." It happens a lot more than you seem to think. Now you have to sue them to get your money, and the average BHPH customer is judgment-proof (no assets). Meanwhile, your asset is no longer fit to be driven and is sitting there rusting. Maybe you can sell it to a junk dealer for $300.

You're also overlooking business licensing, lot location (you gonna keep 20 cars in your driveway?), fix-up costs, and other issues. What happens if someone dies in a wreck in one of your cars and their family gets some shark lawyer to sue _you _for selling them a defective vehicle?

Face it, if BHPH were a guaranteed 250% return, everyone with spare cash would be doing it. I realize you're probably just woofin' here, but I wanted to point it out...


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## oldfart (Dec 22, 2017)

Recoup said:


> I think you're vastly underestimating the risk. I do a little side work for an insurance company, photographing damaged cars for the assessors. You'd be surprised at how many horribly bashed-up cars have a case number that begins LYFT...
> 
> Do you know why insurance companies are allowed to charge higher rates to people with bad credit (your target audience)? It's because there is a statistical correlation between bad credit and higher accident claims. (Disclaimer: Correlation does not imply causation, but who cares what the cause is? The correlation is real.) Yeah, they have to have insurance, but if they're not driving, they're not gonna pay you. Or else they bring the car back to your lot, bashed to $h!t, and says "I'm giving it back." It happens a lot more than you seem to think. Now you have to sue them to get your money, and the average BHPH customer is judgment-proof (no assets). Meanwhile, your asset is no longer fit to be driven and is sitting there rusting. Maybe you can sell it to a junk dealer for $300.
> 
> ...


My point is that there would be less risk selling the car than renting the car.. but either way its a bad idea


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## gofry (Oct 20, 2015)

Go to night school, get some training and get a real job. Forget schemes like this, you will surely lose money and waste time.


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## occupant (Jul 7, 2015)

Thank you to those who gave interesting insights. The rest of you can take your FUD and shove it sideways right up your tight little...

Anyway, I'm going to use the first car personally for the first six weeks to make sure everything is good, at which point the paper tag expires, metal plates go on, change it to the new policy (separate from the household policy, just as cheap), stick a phone up in the dash, and put it out for rent.

First car is probably going to be a 2010 Kia Forte. Everything works well on it and it's costing me about $2000 out the door. It's currently at a car lot, the guy bought it in a group of vehicles from another dealer and he doesn't like small cars (he sells mostly pickups, flatbed trucks, and cargo vans). He's waiting on title paperwork and should be able to sell to me in about a week. I'm looking forward to getting it into use. If it doesn't make a good rental it'll make a good car to resell because I see those things fetching $3000-$4000 on CL/eBay with more miles. Then I'll be able to buy something else and try again.


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## Tysmith95 (Jan 30, 2017)

Why would I pay a 240 a week for a small car rental from some random guy like you when I can get a newer car from Hertz for cheaper.


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## occupant (Jul 7, 2015)

Tysmith95 said:


> Why would I pay a 240 a week for a small car rental from some random guy like you when I can get a newer car from Hertz for cheaper.


Because in my market you cannot rent cars for Uber or Lyft.


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## Tysmith95 (Jan 30, 2017)

occupant said:


> Because in my market you cannot rent cars for Uber or Lyft.


Insurance would be the issue. The drivers need to be insured on a policy to be accepted by Uber. Not sure how that would work with rentals.


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## damphoose (Jul 6, 2017)

So I use to rent a car from a guy who did the same thing. He had 20 cars that he rented out to Uber drivers. It can be done. He did it all professionally. He didn’t use HyreCar. He incorporated. Insurance will be the most expensive part.

and I also live in a market where the TNC have blocked Uber from allowing Hertz and the other company Lyft uses


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## jgiun1 (Oct 16, 2017)

Trust me....the insurance and fleet upkeep will be your killer

If there was really money to made in this, you think the dealerships across the USA with sitting inventory all year wouldn't of thought of this already. I know of a local dealership with lease to own cars here, he said 85% of the high interest cars he gives out with weekly and bi-weekly payments are defaulted on and he pays to get them back with repo. Your going to have to install trackers in every car, make sure people are up on the insurance, & have rideshare insurance. For every car you repo for non payment you'll have to pay to do a mechanical go over before re-entering rental fleet, another will probably come back broken and need fixed at your cost. You better have a mechanic and good auto parts dealer on side.
Then if you put on cheap parts and rotors for example, costs will be worse and way more frequently.

I don't think it's an industry for the small potatoes people. Your going to renting to the bottom of the barrel people, it's going to be a revolving door of cost and headache.

You want to hear what my GM told me at my interview with Hertz. He said, we're more of a car sales, insurance selling & customer fuel charge/sell business... way less money is the rental part.
1-2 million a day selling insurance globally


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