Alfa Romeo 4C for $199? (Need your input on a crazy business concept)

Discussion in 'Cars in General' started by Sam48, Sep 11, 2016.

  1. Sam48

    Sam48

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    Before I go into my story, I have a simple question for you - If you could rent a 2016 Alfa Romeo 4C (Or any car of similar performance and value) for just $199 for an entire day, would you do it? And if so, do you think you'd do it more than once?

    So here's my situation... I found a really good deal on an Alfa Romeo 4C.... Now, can I afford a 4C? Yes. Can I comfortably afford an Alfa Romeo 4C? Hell no. However, I'm sure a lot of you in the US/Canada have heard of Turo, the car sharing app. My idea is to simply buy the Alfa (I'm guessing my great credit and average income should allow), and then get a custom (Removable) bumper sticker that basically says "Rent this ride for just $199 per day" as I drive around. Based on my geography, most people in my region have never seen an Alfa, let alone got the chance to drive one, so I have no doubt this could be a hit. And using Turo, after just 8 days of it being rented, it will break even with the monthly cost. Anything beyond that and I'm actually making money owning it.

    Now compared with typical super car rental lots, this is wayyyy below market. A car of similar value like a Quattroporte or GT-R will easily run someone $750+ for one day. On top of that, you never see them rolling around self advertising for themselves like I would be with my Alfa and its self promoting bumper sticker.

    Maybe this concept has been tested before, but I figured this would definitely be worth running past the gtp community. Am I just a little crazy in doing this?
     
  2. Obelisk

    Obelisk Premium

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    And let someone make off with an expensive car? I don't think so.
     
  3. kembro

    kembro

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    Insurance and your time will need to be costed in. May be better just to charge for joyrides, insurance will be cheaper if it's only you driving. I remember someone doing it in NZ with a Lamborghini Contach in the 80's. Good luck
     
  4. Sam48

    Sam48

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    The app Turo is pretty safe in that regard. I also forgot to mention they cover theft and insurance up to one million which is plenty. The catch is they take 25% of what you make. I factored this into what it would cost to break even already though
     
  5. Hayden

    Hayden Premium

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    I think it's a pretty decent idea but would just remind you that people drive rented cars extremely hard. I feel that everyone who borrows the car will be thrashing the hell out of it and returning it with an empty fuel tank and smoke still coming from the tyres.

    While performance cars are built pretty tough, I'm not sure how long the factory vehicle could hold up to such abuse, especially from people who don't neccesarily know how to drive well. Missed gears, hard braking, wheel curbing, etc, etc. I'd be setting aside at least two days worth of commission a month for repair bills. Also worth thinking about is whether your warranty will cover such use. I'd seriously have my doubts on that.

    Apart from that, I actually think it's a rather great idea. If the app has all the insurance and stuff covered, and you can afford it, I'd say it's worth looking in to a bit more seriously.
     
  6. Sam48

    Sam48

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    Thanks for the input! Much appreciated. Once again, I forgot to mention Turo has a separate (but only 10% more expensive plan) that actually covers wear and tear too. Anything from tires to the transmission to dents and dings. Based on your input I should definitely opt for that.
     
  7. McLaren

    McLaren Premium

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    If you're banking on people having to rent your ride out to help you make car payments, you should probably pass on buying the car in the first place.
     
  8. TB

    TB Moderator

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    Agreed. People renting the car is too much of a variable to factor in and if you can't comfortably make the payments on your own, I'd skip it.
     
  9. Beeblebrox237

    Beeblebrox237 Premium

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    Interestingly, I saw a video on the subject last night which is very relevant:

    If you're comfortable with that level of wear and tear and maintenance then the idea is worth consideration.
     
    INEEDNAWZZZ likes this.
  10. kikie

    kikie Premium

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    No, I will not rent a car for one day.

    I test drove the 4C and I'm not willing to spend $199 for one day on a sports car, not even the 4C.

    I personally think that you are going to make it yourself pretty difficult renting your car to others, eventhough that this Turo thing is considered to be safe.


    BTW, I like and definitely concur with what @McLaren said.
     
    Last edited: Sep 12, 2016
  11. eran0004

    eran0004

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    For how many months do you need to pay for the car?
     
  12. TheCracker

    TheCracker Premium

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    I think supercar or classic car rental is a great idea. Gives people the chance to live the dream without the potential crushing running costs and depreciation. Would i want to rent my own car? A car that i'm still making payments on? A mid-engined, CF chassised car with tricky handling on the limit - No thank you.

    Aside from having every man and his mother abuse your ride (because that's what you do with a rental) - the mileage accumulated would make the car hard to sell in the future.

    I take it that Turo is like Airbnb but for cars?
     
  13. Sam48

    Sam48

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    60 months, but that's assuming I don't prepay. My goal is to save any money I make past the break even point in monthly payments and put it back toward the car in hopes I can pay it off much sooner. On top of that, I will soon (ish) have a large second source of income. So if all goes well, I'm hoping the public pays for about 65% of the cars value. And who knows, if people really like the concept, I might buy another sub 100K "supercar" and rent it out to people.

    Correct, very similar to Airbnb. But you're right, people will probably thrash it. Thankfully, Turo will cover any/all damage and wear/tear so long as I report it. But even if I impose a 100 mile/day cap (Which you can through the app) it would still be racking up a solid 14,000 miles a year with decent business for however long I keep it on the market. And none of those miles were driven by me, so I can only assume it will be more like 20K a year. That really is the ultimate trade off in this situation. My only hope is the fact that the 4C is, and I say this lightly, "expected to" appreciate in the long run. But that's a big variable.

    EDIT: And to make this a little tougher, I just realized the Alfa I'm checking it is a Launch Edition version. :ouch: Has the XXX/500 plate on the inside and everything. How many of these even exist in the U.S??? Like maybe 50? Maybe that will help in the residual value department though, but still.
     
    Last edited: Sep 12, 2016
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  14. Naveek Darkroom

    Naveek Darkroom

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    If you're willing to put the money into it, it's an interesting idea. Though with a car like this, maintenance would probably cost a lot.

    And it's a Launch Edition? Wow.
     
  15. 05XR8

    05XR8

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    If a classic Hertz Mustang could sell for a good penny, keeping something like that Launch Edition may pay off in the future. Good luck.
     
  16. McLaren

    McLaren Premium

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    If 4-5 years is how long you plan on keeping the car and renting it out, and you're estimating somewhere around 14,000 miles a year of use, you're not going to see any appreciation. Launch editions in the US have already depreciated $8-10,000 after 10,000 miles of use after their first year.

    Let's be super generous and say you knock it out in 3 years with your estimated rental use & not even factor in the additional 6,000 miles you believe you will add. That's 42,000 miles for a 3-year old vehicle in a market that will possibly have a majority of examples at around 10-12,000 miles based on the current market showing 1-year old models averaging 2-3,000 miles. Your car will already be well over normal use, and that's without disclosing the vehicle was a rental.

    What exactly is your reasoning for wanting this vehicle in the first place? Do you want a 4C to enjoy or is this a business idea you've had and you thought the 4C would be a good starting point? The former will show you getting no enjoyment out of it; people leaving the car dirty and used whilst you foot the bill for basic wear & tear will drive you crazy. If it's a business venture, it has been done through Turo, so it could work (insurance companies have been an issue for this idea though).
     
  17. Sam48

    Sam48

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    I didn't realize that. If anything then I'd have to hold on to it a long time then before I saw any real form of appreciation assuming it even does. Good to know though.

    It's a business idea. The 4C I feel is a great car to start with because it looks way more expensive and exotic than the price tag would have one imagine. On top of that it's a real head turner and a car people would love to drive. A true drivers car that will keep people smiling every time they drive it.

    In regards to wear and tear though, Turo covers 100% of it assuming I report it within 24 hours after the previous renter returned the car. The hassle comes in the form of returning the 4C to my local Maserati dealer to have it fixed if problems do arise. That would be a trade-off for sure.
     
  18. Northstar

    Northstar Premium

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    Honestly, it's not a solid one (granted, I wish it was :lol:). In order for wear and tear to be covered you need to upgrade to the premium package at which point you are only keeping 65% of the fee. I'm not sure how big of a demand there is where you live but I'm guessing there isn't enough to rent the thing out a third of the month on a regular basis. Plus interior wear and tear isn't covered at all and I couldn't find anything about maintenance.

    It would be a great idea if you were going to buy the 4C anyways and just wanted to rent it out when you have other stuff going on.
     
  19. eran0004

    eran0004

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    Expecting 8 people per month to rent the car is a lot, considering that there are only 4-5 weekends in a month, and weekends is probably when people in general would have the time to do something like this. And then some customers will be lost because they want to rent the car on the same day as someone else. What's a reasonable expectation then, 1 - 1.5 customers per week on average? That's 4 - 8 customers in a month.

    Depending on where you live, the demand might drop in the winter as well, so there is a risk that you will need to carry most of the costs yourself for long periods of time. In vacation periods during summer you'll probably have better luck though, so maybe a good strategy would be to try to launch this thing just ahead of a good period and try to build up a reserve before you enter the bad period.

    You should also make a plan for bailing out. If after six months you find that this idea doesn't work, how much money can you get if you sell the car?
     
  20. McLaren

    McLaren Premium

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    The question is how long is that time needed? Alfas rebirth in the US is still fairly young, so it's hard to judge where their desirability will be in 10 years; the 8C seems have done well, but that was a different breed of car & market. The 4C could turn out ok judging by the 1-year old market, but it's still a gamble and could end up a poor investment (like 95% of all cars to be fair).

    Since you said in the first post that you would be offering a deal that really undercuts the other exotics, please tell me you're willing to impose restrictions. High prices on exotics are enough to be affordable to the working man, and high enough to scare off joy riders. I'd hate to see a 4C get thrashed for $200.

    As for the insurance, there has to be more to it than that. Toro covers even basic wear & tear? How are you going to prove something like the brake pads needed replacement under a specific person who just rented it? Someone has to be footing the bill besides Toro; they can't be that generous. Do they also cover the hourly rate at a shop? It's just hard for me to believe Toro would cover stuff like that. I'd be inclined to buy an old Lamborghini myself and rent it out if that's the case. $4,000 service job? The last guy who rented it beat on it.
     
  21. Bram Turismo

    Bram Turismo Premium

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    People who have money laying around to rent a car for $200 a day are probably the people you don't want to drive a sportscar in the first place.

    It's light, very fast, and it has the engine in the back. I give it two months before someone totales it.

    Being a GT86 owner, I will tell you this. If the insurance company as much as sees "2-door coupe", they'll punch you in the face with their pricings. Not to mention environmental and road taxes, which are very high.

    And the GT86 barely outruns a diesel car...

    I think you're in for a nasty surprise when someone has been a complete knob in it, and you have to take it in for repairs again. Because a) they will be a complete yob in it since it's a rental car, and b) Alfa Romeo's aren't exactly known for reliability.
     
  22. Ibonibo

    Ibonibo Premium

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    This would considerate a business if enough people want to rent it.

    Depending on your country there are a lot of legal requirement and you have to pay taxes....

    And go ask your insurance company... Insurance costs on rentals are insane. That's why a GTR costs a few hunderts bucks....
     
  23. Losco

    Losco

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    I'm looking for a Testarossa for rent since almost two years and I can't find it...