Secrets of the Exotic Car-Rental Industry

[Music]

foreign

so I've been renting exotic cars for

almost 20 years now and I can tell you

there's not very many other people that

can say that and now there's a lot of

people that are out there that are

renting exotic cars which are happy to

tell you how to do it how it's the

easiest money they've made how they're

going to sell you an ebook as to how

this business works and I'll tell you

what it's not that simple I can tell you

some certainties that if you think it's

that easy or wrong and if you have

enough money to make it work and enough

brain power to make it work I assure you

you can make more money doing something

else those are two guarantees when it

comes to trying to start an exotic car

rental company so why would you do it I

was young didn't have money we had a

little bit of credit and it was also a

different time so you were able to get

insurance the big factors that are

preventing people from getting into

renting cars now are insurance and then

borrowing so everybody that is renting

cars I would say no 95 percent of them

that hurricanes and the Earth's that you

go out and get are not insured properly

and they're not registered properly and

I've done this exercise I was working

with a big YouTuber recently and I ended

up having to rent they needed nine

huracans and I'm like oh uh I've got one

and they're like all right uh I can't

I've got none because I've got a white

one so I need it but I'm the guy who

gets things done so I needed to go

Source nine Lamborghini huracans for

this guy and so I ended up renting

virtually every available Lamborghini in

the blast radius of New York and I've

learned some things about that I learned

that a lot of the guys use Toro like the

one guy brought his car in the end like

oh don't mind the brakes

I'm like you can't just switch over to

Steel brakes it's gonna sound like a

dump truck you have to get Lamborghini

parts put Lamborghini Parts in the

Lamborghini it sucks but you can't

nickel and dime it the cars were fairly

rough especially the ones with real

miles on them another one I went to

drive and I'm like there's no way this

thing's got 2 000 miles on it

fast forward uh it didn't have 2000

miles on it I had my buddy Look up Hey

how do you turn the it's called super

kilometer filter I'm like how do you

turn the kilometer stopper off on this

car and he looks it up online he's like

yeah you push this button and hold it

for six seconds and it'll flash the

lights driving along

pulled it

kills the odometer and I'm like all

right that makes sense now I knew there

was no way that a brand new like 21

Huracan Evo with 2000 miles is rattling

is squeaking is all sorts of nonsense I

wish and there's got it there's a

business out there which Ed Boolean the

guy sitting right there in this closet

is going to do he's going to prevent

people from or at least identify cars

that are being rolled back by looking up

parameters and that's where I'm gonna

stop it he's going to invent that

business and he'll be able through Vin

Wiki to teach you if a car with a good

probability whether a car has been

rolled back or not so a lot of these

companies are not going to be able to

operate the way they do and a lot of

these guys operate without any of the

overhead that an actual rental car

company would have depreciation which is

you put miles on it it's worthless

maintenance expense again like if your

car's out of warranty you have to get it

maintained but if these guys are running

warranty forever because they're rolling

back their cars then they're not paying

for that interest expense 3 through a

commercial line of credit not like I'm

gonna go find a guy Arbitrage his

personal car into my rental Fleet and

then when something goes wrong be like

yes all right that's on you probably

shouldn't have rented it out and that's

what ends up happening you get a lot of

guys who are all they're doing is

becoming middlemen and that's not a

business you want to be you never want

to be the middleman but they're grabbing

cars they're renting them out on the

platform they're managing the fleet but

it's got a gypsy rental car company

because you don't have rental cars and

you don't have rental insurance so when

something goes wrong everybody goes

running like somebody tossed a grenade

into the room and that's the problem so

when you hear somebody tell you about

how easy it is or how you should go rent

exotic cars you have to qualify that

opinion because if they're not running a

rental car company they're not one to

give you advice and there are ways to

make money on Toro but a lot of people

on Toro don't realize that there's a lot

of depreciation so you're using Toro

which they provide some level of comfort

with insurance but one of the cars that

we had the rear window was left open I

don't know if that what what caused it

to be left open but it rained ended up

killing the car and bricking the car

I paid for the guy's car to be repaired

I towed it to the Lamborghini dealership

had it repaired for him it was just a

body control module or something like

that but that was a two thousand dollar

repair and ultimately that guy through

turo got nothing he I think Toro limits

their loss of use to like 50 a day so

imagine you have a car that you're

paying four thousand dollars a month on

the lease and it's down for three months

and Toro's giving you 50 bucks a day

that's a problem and that's like you can

try to go after individuals it's really

tough because I don't think individuals

Insurance are technically required to

cover it because it's a peer-to-peer

service it's not a rental so there are

ways to make money on turo but I think

the ways to make money on Toro or

through the Corollas and Camrys for 50

or 70 a day on your three thousand

dollar car and not necessarily going out

and buying a cullinan and listing it for

800 a day on Toro which you walk away

with 400. a lot of these guys aren't

business guys right they're they're

taking a platform and throwing something

up there and somebody else is doing the

heavy lifting by bringing the customers

so all you're trying to do is like make

sure you keep your utilization up by

pricing it low enough that's the wrong

problem because now you're going to

start stacking miles on your car your

car's value and don't go with current

market this current market is going to

ruin a lot of people because a lot of

people are used to a car gaining value

or not losing value and that's not what

happens you take a a Lamborghini and you

put 40 000 miles on it that thing's

worth 30 000 is less than a comparable

car with standard like 8 000 miles on it

so there are a lot of people in for

quite the shock I'm sure there's a lot

of leasing companies out there are going

to be getting a lot of high mileage cars

or low mileage cars with a lot of

problems because they're rolled back and

we're in for quite the correction and

it's going to be quite the wake-up call

for a lot of these Airbnb people and a

lot of these Toro people where they're

going to realize they're sitting on very

very overvalued assets and they owe a

lot more than they're worth and the

other thing you don't realize is that

you're also not only in violation of

your insurance agreement on whatever

personal policy you have it on because

you're not allowed to rent it out but

you're also out of trust with your bank

so your bank is giving you money to buy

a car for personal use when you're not

using it for personal use but now

commercial use you're out of trust with

them and they have to go pull it back so

if they find out that you're renting

that car they will repossess it and they

will any Equity you may or may not have

is gone and if they're I'm telling you

if they're out money they're going to

come after you for it

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thank you

foreign