Pros & Cons of Running a 300 Car Rental Fleet (MUST WATCH)!!

Added: 2026-06-02

[00:00:00]Today, I'm going to share with you the real pros and cons of running one of the biggest independent [music] car rental companies in Arizona. The good and all the bad. The stress, the late night issues, having cars [music] get in accidents all the time, and I'm going to break down everything. From the outside it may look like complete freedom having a 300 car rental fleet, but sometimes [music] inside it feels like controlled chaos. Let's talk about the first pro, and it's scale. When you have more cars, it makes it easier. You can hire employees, you can have a building, you can have certain things that you just couldn't when you're a smaller fleet. I remember when we had 5, 10, 15 cars, it's really hard because we didn't really have enough work to where we felt like we could get an office. If we did it'd take a huge portion of our revenue, and couldn't hire employees cuz we felt like we weren't making enough. It'd just take a ton of money from the company, and we felt like there wasn't enough work to do. So, there's kind of a weird balance, especially in the beginning as you're scaling, where you feel like either you're not ready, or you're not making enough money to have certain things. But, once you get to scale, once you get to 50, 100, 200 cars, it makes it so much easier to have an office space to store your cars, have employees that are managing the day-to-day business, and generally all your costs go down. So, your average cost for having your cars in your building goes down, your average employee cost goes down because you have volume. Some things won't go down, like your cars at the body shop. That's the cost that's not going to go down, maybe you get a wholesale rate, so it goes down a little bit, but that's still going to exponentially increase. Your depreciation won't decrease, your cost for insurance, your cost for registration, none of that stuff decreases, but a lot of the operational costs do decrease with volume, which is super nice. So, your average goes from maybe in the beginning your total cost $600, a car if you have people operating the entire business and have a location, but then once you get to scale, it's significantly cheaper. I think in the beginning it's hard to see the other side of the rainbow. It's hard to see how something can be successful when you don't have enough cars to have these costs be low. And so, you're having to take on a lot of stuff yourself. You're having to clean the cars, you're having to communicate with guests. You don't have a place to park your car, so if you're putting them in your driveway.

[00:01:56]And I think once you get past 20, 30, 40 car marketing, you can start having some of these luxuries of employees or building, then it really makes a difference. If I were to choose one over the other, I'd probably go with employees first cuz that frees my time up. Building doesn't free my time up. It just looks nice. It's nice to have for customers, which they don't really care.

[00:02:13]They're just there to rent the car. But as soon as you can start hiring employees to help with the day-to-day operation, it makes a huge difference.

[00:02:19]Let's talk about the second thing, and that's cash flow. It's a pro, but it's also a little bit of a con. So, obviously adding more cars, you make more money. But something that you don't consider is when you're adding more cars, there's a lot more transactions that you have to account for. For us, we have thousands of transactions every single month between supercharging, body shop, glass repair. There's so many vendors that we have. And so, not only are you having to manage all your transactions, you have to account for them and make sure that you're not overspending. And you might just say, "Well, I can just hire a bookkeeper for this." Problem with a bookkeeper, unless they're internal, is they're not thinking the same way you do. They're not thinking about how successful is my business right now. What do I need to change in order to become more profitable? Well, they're just seeing it from, "Here's your transactions. Let's categorize them. Let's make sure that they're in the right place for when we write do our taxes." And that's it. And so, when you come to an operational level, it's it's significantly different. You have to be tracking a lot of these things yourself. And so, something that we do is we do a breakdown of revenue per car, per month, per mile. And then we do the expenses that we too. And we understand that some things are going to change. Higher miles is going to be higher depreciation, for example. It's not going to decrease our building cost. But now we can see where our costs are per month and per mile.

[00:03:25]And we can start to understand trends.

[00:03:27]We can start to understand where where our overspending. We can start to understand true profitability from a full cost and depreciation perspective.

[00:03:34]And with that, it just takes a lot of transactions. So, having scale, volume, it's nice because you have these numbers that you can see, so you can compare to, and you can say, "Okay, well, this is working really well." Or this isn't working really well. But when you're small, when you only have a couple cars, it's hard because you might have one accident and you'd pay $2,500 deductible. So, that's huge. That's a huge chunk of loss out of your company's revenue. Maybe you only have five cars, like that's significant. But, if that happens and you have hundreds of cars, it the percentage it's not it's not even close. I mean, it's such an insignificant piece when you have a large company. When you have one car down out of five cars, you only have you have 20% your fleet down. If I have one car down, it's less than 1%. It wouldn't make that big of a difference. Okay, let's talk about the third thing and this is a con. And this is maintenance.

[00:04:17]Something that you have once you have a lot of cars is a lot of maintenance.

[00:04:21]We're super super fortunate because Teslas don't really have much maintenance.

[00:04:25]You have tires and you have windshields.

[00:04:27]Now, that's not completely true. There's other things you have to fix and we can definitely see with volume. But, the main things that we have are tires, windshields, curbed wheels, it's a common one, dead batteries, interior damage or wear, suspension damage, customer smoking, and then if you had gas cars, lost keys, which we don't have cuz they're all virtual. And when you only have a small fleet, you don't really have a lot of these things. I mean, maybe, you know, one of these things, two of these things happen a month. But, for us, we have multiple of these happen every single day.

[00:04:56]Accidents, we have one or two a week, just depends. Smoking in our cars, once a week probably at this time. Curbed wheels probably happens every day.

[00:05:04]Windshields, it feels like we're replacing five to six a week. Dead batteries, this is rarer. This doesn't happen as often, but it still happens once or twice a month. Tires is an everyday battle. Our team's talking to uh the tire company we're working with discount every day. We're replacing tires literally every single day. We replace at least a set of tires. And this is something you can operationally manage. Just takes a team. takes, you know, understanding the process to make it seamless. But, it's still, once you have more scale, a lot more of these things start happening. And so, for us, we have at out of that list that I gave you, those those incidences, we at least have a couple of those a day between tires, curbed wheels, windshields, accidents, you name it. We have a couple a day. It's crazy. Okay, let's talk about number four and this is a con as well. And this is controlling the rental process in the customers. So, a lot of times rental companies will deal with late returns, they'll deal with charge back, damage claims, fake identities, smoking, speeding, which we get we'll get like the little flasher tickets, tolls, sometimes stolen vehicles. For us it's rare. And then unwillingness to pay balances. Let me be honest, you can have the best system in the world, a lot of these things are still going to happen.

[00:06:10]We've had people drive over 130 miles an hour in Teslas, which doesn't really feel possible. We've had people return cars completely destroyed, didn't even tell us that they just showed up on our lot, disconnect trackers, fake their insurance card, stop paying, and just will not continue to contact us. You name it, it's probably happened to us.

[00:06:27]And so all we do is react systems for it. And I think we've gotten fairly good, but there's a lot of things we can't control. And so I think the best way to do this is I think if you scale too quickly a lot of these things will just pass by you and and you won't have a system for it and it becomes really difficult. A lot of people say, "Don't scale too quickly."

[00:06:46]This is probably one of the biggest lessons you can learn. Adding 200 cars in your rental fleet overnight for somebody would be extremely difficult.

[00:06:53]For us, when you have more cars it's a little bit easier, but somebody with 10 cars went to 210 in one day, it'd be extremely difficult cuz a lot of these things you wouldn't have processes for.

[00:07:03]And even if you did at small scale, you wouldn't be able to do them quick enough for the volume that you have. And so you have people taking advantage of you, doing bad things in your car, at the end of the day causing you more stress and more money. All right, let's talk about number five. I kind of mentioned this earlier, but having employees is a vital part. I'm going to talk about the employees that you should have, starting from the most important down to maybe some of the last hires as you're scaling. The first one in my opinion is just an operations coordinator. Somebody that's cleaning cars, delivering them, talking to customers. And you could probably hire somebody when you have 10 cars you're probably still having them be part-time. But having that person in place is vital. Because what it does is you don't realize, even having 10 cars, you're taking up a lot of your time messaging customers, getting cars cleaned, customers are calling you for issues, working on damage claims. Like there's tons of things that you don't realize take up your time. And if you can minimize that and focus on buy more cars, investors, looking at your P&L to make sure you're profitable, looking at new revenue streams for your company, it's going to be a lot more advantageous than you cleaning cars. You doing back-end work to ex- scale your company is going to be a lot more successful than you delivering your car to the customer. And I know in the beginning a lot of people are going to say, "Well, you know, I could just do it myself.

[00:08:15]Nobody can do it as good as me." Maybe that's true, but that's not the point.

[00:08:18]The point is you either scale, which you can't get to hundreds of cars on your own, or you don't. And if you don't want to scale, that's fine. Just you can do everything yourself. If you do want to scale, you have to hire somebody. And the most efficient way to do it is to make less money, which is going to happen regardless, hire somebody, get more time back, and then put that back into business scaling. The second hire I would say is customer support. A lot of people hire from the Philippines, other countries, and it's typically $3 to $5 ish an hour.

[00:08:45]Cleaners are $15 to $20 per hour. Some people will pay them per clean. We do per hour, just depends. The next one, you'll probably have a manager managing the cleaners and then the overseas customer support team. And then one of the last ones you'll probably bring in is accounting. So, bookkeeping and accounting, you'll bring that in-house.

[00:09:03]Probably the next thing you'll get is something called a controller. This is somebody primarily their only job is to look at the numbers, find out what's going well, what's not. It's kind of like a bookkeeper, but more in depth.

[00:09:12]They're literally figuring out the best way to scale your company. All right, let's talk about the high-stress things that nobody really talks about.

[00:09:18]Insurance issues, banks, debt, feels like constant fires having to put out, cash flow swings, high depreciation.

[00:09:25]People see revenue numbers and they see sleepless nights. They see us, they see all of our cars like, "Oh, you probably sleep well at night. Like your job is probably really easy." But it's not. A lot of stuff that I look at is, "When is this insurance claim going to be done?"

[00:09:35]It's taking 5 months so far. Why is it not completed yet? Going to banks and getting denied for funding or giving a super high interest rates even at our size. What happens if the market crashes? If Teslas go down 10%, this is a lot to go down 10%. So, I think at the place we're at right now, a lot of the problem-solving and issues aren't necessarily individual things. Sure, sometimes something comes up, customer's having an issue, we'll solve it. Uh a lot of that's being taken care of as is.

[00:10:00]A lot of it's new systems having to be created. Okay. Uh you know, our average miles are really high this month. How do we fix that? We need to charge more money. We need to charge per mile. Or how do we make sure that customers are paying for their deductible on insurance? Or how do we make sure that customers aren't smoking in our car? So, we're at the place right now where we're kind of just solving bigger issues. How do we get funding? How do we open up a location in California? And I really like solving these problems. I like solving the bigger problems, but it's shifted completely. Before it used to be solving individual problems. How do I solve this claim? How do I help this customer? How do I call this customer tell them that, you know, the car is not available? But now it feels just completely different. It's how do we get more funding? How do we make sure utilization stays high? What do these marketing campaigns look like? How do we speed up our claims process? How do we open up a new location? How do we potentially franchise? These problems, honestly, they're really fun to solve. I really like to do them. They feel bigger scale. They feel like I'm actually making a difference, but it's they're harder to solve. You know, a customer comes in with an issue, you solve it in couple minutes, maybe. But these issues that we're trying to solve now are take time and and typically when you solve it, it's it's not right the first time.

[00:11:08]And so, you have to make reiteration.

[00:11:09]And so, for anybody in the business and and they're scaling it, I say just don't give up. The beginning is the hardest part. Having three, five, 10 cars, I think it was significantly harder having 25 cars, our own location, just us working on the business than it is right now. Which might not make sense. I mean, you'd think the bigger it is, the harder it is. But back to a lot of points that I made earlier, you have a lot more help. You're not doing it all yourself.

[00:11:30]So, I think a lot of people they scale it, they see how hard it is, it's difficult, and it's because people make it seem so easy. It's passive, it's passive business, it's not. It's more passive when you have more cars cuz you can afford these luxuries, but in the beginning it's not. Two choices, you either grind through it and you get past the beginning hurdle stuff where you just you're doing everything yourself, it takes a lot of time, you're making some money, but money in this business is made at scale, or you get to five or 10 cars and you realize that I don't want to do this. I don't like solving these problems, and then you get out of the business. So, those are your choices, red or the blue pill, make your choice. The biggest thing we talk about on our channel is going from Turo to private rentals, and you make that transition. We make so much more money, but how do you do it? What tools do you need? So, recently partnered with a company, if you click the link below, it'll give you access to it, booking software, full system, gives you everything you need to make that transition seamlessly. And super easy, super quick. This is a system that we're going to start using. So, click the link below, get signed up. Appreciate all the support from everybody. If you want to see something specific in the videos, just comment below, and thank you everybody for following the journey.

[00:12:34]I'll see you in the next video. Peace.