expenses are the part of a car sharing Fleet that no one including myself likes to talk about but like any business expenses are a crucial part of the equation that you need to be prepared for and take into account whenever you're thinking about starting or growing a car sharing Fleet and so in this video I'm going to be breaking down some of the expenses that you can expect with a car sharing Fleet how to cut down on those expenses and some of the ones that may be avoidable entirely but before we dive into that I do want to remind you all that my course the car sharing masterclass is on sale until January 21st and you can get the course for $150 off by using the code New Year 2024 this course is a very in-depth guide teaching you everything that you need to know about starting and scaling a car sharing Fleet with the same model that I've used over the years to grow my own you'll learn how to buy cars how to determine which cars are the best ones to buy and how to get up a low market value deals on the cars that you purchase you'll learn how to operate your business like a pro by taking advantage of remote key exchanges and automatic messages and we'll also go over things like accounting business and LLC information Insurance what happens if your car is in an accident or potentially a total loss as well as everything in between and the best part is whenever you sign up for the course not only do you gain access to 7 hours of course content but you'll also be invited to our private Discord and our monthly private Zoom calls as well so if you'd like to check it out you can do so by following the link down in the description below and using the code New Year 2024 to get $150 off now back to the video now like I said a moment ago car sharing is no different than any business out there and there is absolutely going to be expenses that you should be prepared for insurance is really the first and most obvious one and HP and I pay about $55 per car per month for our insurance costs now our vehicles have liability only and we ensure through ABI period x and I know what you guys are going to say whenever you watch this video because I get comments like this all the time people who say hey I called ABI period x and they're saying that it's going to cost between $70 and $80 per month how the heck are you paying 55 and that is again because we're liability only if you get full comprehensive and liability coverage that's going to be closer to $70 to $80 whereas if you have just liability you can cut the cost dramatically now insurance is a required cost for a car sharing Fleet if you have cars on turo or really any car sharing platform out there you have to have third-party insurance this is a non-negotiable but the type of insurance that you have and the amount that you pay can vary depending on a few different factors including the types of cars that you own your own driving record the insurance carrier that you go with what type of coverage you choose as well as how you pay for it because HP and I have normal cheap cars that we never drive for personal use having liability for our cars makes a ton of sense and because of that we have liability only coverage on all of our vehicles except for our personal car our camper van and our Lincoln Navigator because in the case of the Lincoln Navigator it would be silly to have liability only on a nearly $40,000 car again the ability to have liability only is one of the many benefits of having cheap normal everyday economical cars because it makes sense to have liability only Insurance whereas with a car like a Lincoln Navigator the insurance costs are quite a bit more but like I mentioned a moment ago even though Insurance costs are a non-negotiable and you're going to have to pay this one way or another there are still ways and methods that you can take of decreasing your insurance cost without decreasing coverage for example with our camper van we pay 12 months at a time and this gives us about 10% discount we also do the same thing with our personal policy we pay every time the policy renews which is once every 6 months and I believe this saves us anywhere between 5 and 10% insurance is definitely a personal thing and all of these factors are going to go into play in addition to where you actually live than operate your business out of so I definitely encourage you to do your research price shop different insurance companies and do some due diligence and figuring out what type of coverage you actually need a second cost that many turo hosts have is a car payment now a car payment is sort of a double-edged sword because for many turo hosts it is the only way that they can actually get started with turo and I've made probably hundreds of videos on my channel over the years talking about my thoughts on a car payment and while I don't think that a car payment in and of itself is necessarily a bad thing I think that this can be abused relatively easily and and I certainly am not an advocate of having a fleet of financed cars currently with my 29 cars only one is financed and it's one of my more recent purchases which is the Lincoln Navigator obviously a car payment is going to be part of your month-by-month expenses and the amount that you pay is going to depend on the car you buy how much you put down the interest rate as well as the term if you finance a car you'll have a car payment if you don't you won't and cars that don't have car payments are in general significantly higher margin maintenance cost is another expense and more than likely this is going to be probably one of your highest expenses as a car sharing host I would put both maintenance and repairs into this category though I know that they technically are different maintenance and repairs is an expense that can get out of hand really really quickly if you're not keeping an eye on it which is why it's so important to figure out ways to reduce maintenance and repairs cost without reducing the quality of the maintenance of your vehicles I really put maintenance and repairs into two different categories you have your required maintenance and repairs these are types of Maintenance work or repairs that have to be done to a car either because of the age or because of the mileage for for example regardless of how reliable a car is at some point in time you're going to have to replace its suspension every single car regardless of the year making model or going and need your traditional maintenance items like windshield wipers brake pads rotors an oil change if it's a gas vehicle these type of expenses are like Insurance unavoidable but there are ways that you can reduce the cost of these expenses and then of course you also have your one-off maintenance as well these are maintenance costs that are much less predictable and they're often times much more expensive so things like a blown AC a bad engine bad transmission things like that and while whenever it comes to maintenance and repairs there are a ton of different ways that you can reduce the cost of this category of expenses without reducing any of the quality in fact in some cases it might actually increase the quality of their repair and truthfully I could probably make one Stand Alone video about this topical loan because there is just so much to say and where HP and I cut a ton of costs in this area isn't by doing maintenance less it's instead by buying the parts and tools for that maintenance in advance for example we're constantly looking to see who's selling the cheapest oil and when the oil goes on sale we buy hundreds of dollars worth as much as we can fit into the garage for a long time this was Amazon sometimes it's Walmart sometimes it's Costco Sams basically whoever is selling oil for the cheapest we will buy it in bulk but we don't reduce the quality of oil that we buy simply to take advantage of a sale we buy the same quality that we would buy every single time we just buy it at a discount HP really leads the charge on this oil hunt but in general we pay between $25 and $35 for an oil change of course this varies depending on the car and this does include oil filters and labor because HP is doing it and buying and B doesn't just apply to oil Al though it's one of the more applicable examples of this cuz a turo host needs a lot of oil but it can be applied to anything that you need to buy on a reoccurring basis another way that we save a ton of money with expenses and repairs is by having corporate accounts set up with any vendor that we can I've talked about this a lot in my videos in the past but a corporate account is an excellent way to save money without sacrificing any quality at all most retailers in the automotive space will have what is called a corporate account and basically what you do is you give them your LLC information and then whenever you buy anything from that location or that V vendor you tell them what company you're with and they give you corporate pricing AutoZone ory Firestone Discount Tire even dealerships like Ford or Toyota have corporate pricing and the amount that you save with a corporate account varies quite a bit from part to part and from vendor to vendor but over the course of a year if you have enough cars this can result in thousands of dollars in savings now the exact way that you go about creating a corporate account does vary from vendor to vendor but I would recommend doing is checking out their website or calling them up directly asking them if they have a corporate account and then just following the steps that they give you sometimes this involves just giving them your LLC or Ein in the past we sometimes had to give things like filing paperwork and recently a local Ford dealership requested to see a business card with her address and her LLC name but in general the process is very easy and it saves you a ton of money tires are another key component that depending on the type of car you have can add up extremely quickly especially if you're renting your car on turo because the reality is turo guests abuse cars like crazy and as a result your tires are going to have to be replaced more frequently than your personal car will this is another hidden benefit of having a corporate account as well as just having cheaper cars because of the fact that cheap cars have cheap tires in general and because of this we pay anywhere between $50 and $80 for the tires that are on our cars this in and of itself is a great way to save money but for those of you who don't rent out or don't own cheap cars like we do a great way that you can save money on Quality Tires is to not sleep on used tires now what I'm not talking about here is tires that are being sold out of a back of a pickup truck that have had their tread redone but what I am talking about is slightly used tires that for whatever reason they're being sold this is particularly common with sports for performance cars and while I don't buy used tires for my turo fleet because we don't need to cuz our tires are already cheap if I had performance cars in my turo fleet I absolutely would buy used tires in fact I would consider buying used tires for the Lincoln Navigator and if I still had the Maserati gibli I'd probably buy it for that car as well but a great example of this in practice is my husband's GT500 my husband drives a 2020 GT500 he does not rent it out on turo so it is exclusive for personal use and recently he needed new tires for his car and these tires are very very expensive like $500 per tire he was made aware of somebody in the local car Community who had a Porsche that was selling the exact tires that he was looking for and this guy was selling his basically brand new tires that had just been taken off of his car for $350 all in they technically weren't brand new but they as close to brand new as a used tire could be and my husband paid $350 for four of them rather than paying $2,000 and so moving forward whenever we do need to buy these more expensive tires we're going to be keeping our eye out for the used ones rather than automatically defaulting to new just be sure that you can actually verify that these tires are in fact new and there are a lot of really easy ways to do this like checking the tread making sure there isn't dry rot and even checking out the date of the tire itself and before anyone says it I know what some of you guys may be thinking you shouldn't be buying a car if you can't afford the tires but there is a big difference between being able to afford the tires and wanting to pay full price sure if we wanted to we could spend two grand on tires but why would we if we could get the exact same quality for a fraction of the price but on the same topic of Maintenance let's talk about some of the maintenance that is less predictable and less routine I loaded to this earlier but this would be things like maybe body damage blowing AC's engines and Transmissions whenever it comes to this more expensive one-off type of damage we typically have two sources that we look to First whenever applicable that is and that is eBay and junkyards this is specifically helpful whenever it comes to causmetic damage and parts on your car that you want to replace cosmetically whether it be a door panel a fender a bumper whatever the pieces eBay and junkyards are really great options to go down because you can find Quality Parts at a really really cheap price we have in the past gone to junkyards and got fully painted o fenders for 100 bucks when those exact same parts from the factory would be thousands and on eBay there are some great vendors that sell prepainted parts that may not be exactly like OEM but they are pretty close and they're at a steep discount this is my go-to whenever needed in addition to junkyards or Ebay there are a lot of great retailers out there that may not be quite OEM but they are PR pretty close and they are significantly cheaper like rock auto or LKQ LKQ even has some Stellar warranties but you do want to be careful whenever it comes to these types of parts and repairs that you make at a discount because not all aftermarket parts are created equal and sometimes buying the OEM or expensive part the first time around is the better decision there are some parts and pieces of a car that aftermarket really make no difference whatsoever I am a firm believer that buying aftermarket cosmetic Parts make zero difference to the car and I will go aftermarket every single day of the week there are also some really great engine and transmission retailers out there that can sell these parts for a steep discount that are pretty Dam close to Odem but there are some other parts here or there where it is just better to buy directly from the factory and the problem is many of these parts do vary from car to car and manufacturer to manufacturer so I can't sit here and tell you which parts you should or should not buy after market but I can give you some examples of my own cars that I originally bought cheap parts and I ended up regretting it later on one perfect example is a car that isn't even a turo car it's my personal car my 1997 forer my husband rebuilt my forer a number of years ago whenever we were just dating and at the time we didn't have a ton of money so he used budget parts to build out my entire suspension well 2 years after that my suspension had to be replaced again because these budget Parts just weren't holding up and we ended up having to go back and re-re everything with higher quality nicer Parts this time we didn't cheap out and we got the more expensive Alternatives another great option is potentially motor mounts HP and I have found that on some of our cars buying cheaper motor mounts significantly reduce the lifespan of those motor mounts but this does vary a bit from car to car for example on Ford focuses getting cheap motor mounts doesn't really matter or even brake pads we have in the past purchased cheap brake pads for our Mercedes and this is almost always a mistake because cheaper brake pads on a Mercedes at least in our experience result in more squeaking which gives the guest the illusion that the brakes are going bad and every time that this has happened We've Ended up replacing the brake pads with more expensive ones and it has solved the problem and now with our Mercedes we no longer buy cheap brake pads as a result this is sort of a trial and error thing that you you have to figure out with your own Fleet but sometimes buying cheap isn't better and you can end up saving money in the long run by just buying something more expensive and more high quality another great way to save some money when it comes to repairs and maintenance is buying parts with lifetime warranties we do this quite often with O'Reilly I'm not 100% sure which vendors offer lifetime warranties on Parts but I know that O'Reilly does on quite a lot of them it is very common for us on parts that we know are going to have to be replaced often to buy parts that have lifetime warranties with those even if they're more expensive a perfect example of this was with my previous jeep that I used to own in the EGR valve EGR valves on Jeep Wranglers are notorious for going bad and my jeep was no exception when we had to replace at the first time we bought one without the lifetime warranty the second time we bought it with the lifetime warranty and we ended up having to replace the EGR valve three additional times after that each time the part was free yeah it was a little bit more expensive upfront but it ended up saving us money in the long run and this is something that you should keep in mind for yourself now these are just a few the examples of how you can reduce maintenance and repairs cost without reducing the quality of the repair and maintenance that you're performing on your your cars but the point is maintenance and repairs are probably going to be one of your biggest expense categories and there are really great ways that you can reduce this without sacrificing any safety another unavoidable cost to your turo Fleet is going to be tools to operate your Fleet and the amount of tools that you buy and what type of tools you need will depend on your involvement in your Fleet if you're someone who's wanting to work on all of your cars and you will obviously need a lot more tools and supplies and somebody who doesn't want to work on your cars at all but regardless there are going to be some staple tools that you probably need to have things like Scrooge divers pry bars maybe even a ratchet or an impact wrench a good vacuum cleaning supplies these are all things that in my opinion are things that a turo host should always have because you never know whenever you're laid to do something that will require one of these tools having a Jack and a jack stand is also a really great idea HP and I typically practice the belief of whenever we buy a tool for the first time we will often times buy the cheapest version of that tool often times that's from Harbor frame and if the tool ends up breaking we will then replace that tool with a more expensive higher quality alternative because if we use the cheap version and then it ends up breaking this tells us that number one we used the tool enough to break it and number two the cheap version wasn't on par with what we really needed but often times you'll find that with these cheap tools they end up getting the job done quite well for example screwdrivers a $5 screwdriver isn't really any different from a $20 screwdriver but in general hpn are pretty big Advocates of investing into the right tools that you need for your tarot Fleet having bad tools and bad supplies will end up costing you money in a long time but more importantly it'll cost you a lot of time for example having a bad vacuum may be cheaper than having a really good one but you're going to end up spending more time cleaning that car the name of our turo game has been efficiency the last couple of years and as a result we make sure to invest in the tools that we need to be as efficient as possible and this often times involves us buying tools on Black Friday and Dearing big sales we've occasionally even looked at things like estate sales that we haven't really boughten anything from them buying from Harbor Freight when applicable and just buying it when we need it at this point we have most of the tools that we need so we don't really spend a ton on tools but in previous years we have definitely taking advantage of big sales like Black Friday the last thing that I'm going to say whenever it comes to maintenance and repairs expenses is to keep tabs of how much money you're spending on each individual car this is incredibly important because you want to make sure that you aren't spending too much on repairs and maintenance for a vehicle like I mentioned a little bit ago maintenance can really go into two categories the routine unavoidable maintenance and this isn't really a big deal but you're also going to have the maintenance that pops up due to repairs or maintenance issues like a transmission engine AC whatever the case is and you want to make sure that the amount that you're spending on each car when it comes to repairs and maintenance makes sense compared to how much that car is making and the amount of money that makes sense to spend will depend on the type of car how much money it's made its historical repair cost and earnings as well as a variety of other factors but the sun cost fallacy is a very real thing in car sharing and this is the idea that hey I already spent $10,000 fixing this car if I only spend $2,000 more then I will be done and it'll be back on the road but that stamp of approval after that $2,000 has been spent is never guaranteed and you want to make sure that the amount that you're spending on repairs and maintenance makes sense and while I never spend $10,000 on my own cars because that's more than my cars are worth I do oftentimes have to ask myself after spending a few grand on a car if it's worth it to spend more and I do keep this uncosted fallacy in the back of my mind and the last expense category that I want to talk about is probably the most fun and that is expenses that you're already paying but now can be absorbed into the business because you're operating a business things like your internet bill your phone bill your phone your laptop maybe you have a charger or some sort of storage subscription these are all expenses that can now be deemed a business expense and thus they should be paid for by the business and they can be tax deductible and while you shouldn't spend money foreverly just because it can be used as a business expense this is a great way to be able to justify certain expenses that you maybe wouldn't have otherwise been able to justify like a new laptop or new iPad or new car parts or new tools the list goes on and on this is particularly fun once you start making money cuz you can start spending more of your money on the wants not the needs for the business and that is the most fun category to spend in but there you guys have it some of the expenses that you should expect to spend with a car sharing Fleet and where you could potentially cut down some of these costs like always I hope that you enjoyed this video if you have any questions comments if you have anything to add I would love to hear it so make sure to leave a comment down below and while you guys are adding make sure to hit the like button hit that subscribe button and hit the notification Bell and I will see you guys in the next video