The Sharing Economy has changed the way we conduct a lot of business. From where we stay when we travel, to how we care for our pets, and even how we get from point A to point B. Ridesharing like Uber and Lyft have pioneered the Sharing Economy industry, paving the way for companies like Turo and Getaround. Car sharing isn’t really a new concept, it has been around for the last decade. Turo was founded in 2010, and since its start has helped change the way people drive and view car ownership. Turo car sharing can also be a very lucrative business. Considering car sharing? Here is everything you need to know, from Turo insurance to Turo taxes.
How Does Turo Work?
Turo works by allowing car owners to share their car while they are not using it. It is a great way for owners to supplement their income, putting their car to work for them. Many owners more than pay for their car by listing it for rent on the Turo app, and some even scale their business, and manage a whole fleet of vehicles.
Owners simply list their vehicles on the Turo app. They can set the rate, availability schedule, and other preferences from their owner dashboard. Users looking to rent, can use the mobile app and browse available vehicles in their area. They can rent for a few hours or even a few days. Once an agreement has been made between the owner and the user they can arrange pickup or delivery of the vehicle. Many owners and users develop an ongoing relationship so they continue to do business together.
In order to list a car on Turo, the car must meet certain requirements. Turo accepts a variety of different cars including gas, diesel, hybrid, and electric. Vehicles listed on Turo must seat less than 8 passengers and be no more than 12 years old unless listed as a specialty vehicle. The vehicles must be registered, have a clean title, and have no more than 130 K miles on it. The vehicle owner must also maintain a valid insurance policy on the vehicle. In addition, the vehicle must meet safety and maintenance guidelines and undergo an initial inspection. Turo also requires exclusivity, meaning you can’t list the vehicle on other car-sharing platforms.
Turo Cancellation Policy
As the owner of the vehicle, you are in complete control of your vehicle. Which means that you have the right to cancel a trip. With that being said, it is important to understand the Turo cancellation policy, if a trip is canceled with less than 24-hour notice there is a $50 cancellation fee. For trips canceled before 24 hours, the cancellation fee is $25. If a new trip is booked with the same host, the cancellation fee is waived. An automated review of the listing occurs after each cancellation. Frequent cancellations can result in penalties and removal from Turo. In addition to owner cancellation penalties, users are also subject to cancellation fees if they cancel a trip in under 24 hours.
Turo Car Insurance
Turo requires owners to maintain their own insurance policy on their vehicles. Vehicle insurance must meet the minimum coverage required by law. Additional protection may be purchased through Turo. In regards to Turo insurance, it is important to be familiar with local and state laws. Turo requires owners to provide proof of insurance in the vehicle. This is so it is readily available to renters. In addition, if you purchase incidental insurance through Turo, this insurance card must also be available to drivers.
Does My Insurance Cover Turo?
Similar to ride-sharing, most insurance companies have certain stipulations regarding car sharing. Since you are using your vehicle for business, many car insurance companies will not allow your personal auto insurance to cover incidents while it is rented out. This is where things can get tricky. Some insurance companies offer additional coverage for business use, which comes at an additional cost. However, some insurance companies specifically exclude vehicles listed on Turo. Some companies will drop customers if they find out their vehicle is listed on Turo. This can make acquiring the proper coverage a challenge.
It is crucial to check with your insurance company before listing your vehicle on Turo. You don’t want to end up with a situation where your insurance company refuses to cover a claim. Turo offers supplemental coverage through Liberty Mutual. However, if an incident occurs during personal use, you may have to provide proof to your insurance company that the incident was not business-related.
Turo Insurance Cost
The insurance offered by Turo is through Liberty Mutual. They offer 3 different levels of insurance to hosts: basic, standard, and premium. Each provides liability coverage of up to $1 million as well as physical damage protection of up to $125 K. The cost of each type of coverage is based on a percentage of your vehicle’s rental rate. The basic level costs 15%, the standard is 24%, and the premium is 35%. The basic level has a $3,000 deductible for physical damage. Both the standard and premium levels have a $0 deductible.
Turo vs Private Car Rental
The biggest difference between Turo insurance and private car rental insurance, the collision coverage. Because most car insurance companies decline coverage to Turo vehicles, obtaining additional coverage through Turo is important. Most insurance companies will still cover you if you have an incident while renting a car from a private car rental company.
It is important to check with your insurance company before listing your car. Some insurance companies have been known to drop insureds, decline coverage, and decline claims from Turo incidents. You don’t want to leave yourself vulnerable
Are Insurance Costs Tax Deductible?
If you list your vehicle on Turo, you may be able to deduct your business-related expenses. This includes your Turo insurance. However, it is important to note that if you take the standard mileage deduction of 58 cents per mile, you can not deduct individual expenses. The standard mileage deduction takes into account maintenance, repairs, fuel, taxes, and insurance. It is important to discuss with your tax advisor which method benefits you the most. For some, claiming the individual expenses may make more sense, in which case your insurance costs are tax-deductible.
Get Help With Turo Taxes
In addition to Turo insurance, you may be able to claim other deductions like parking as long as it is 100% related to business. You may also be able to claim marketing expenses. For example, if you hire a photographer to take professional pictures of your car so you can attract more users, this expense can be deductible. The best way to know if you are getting all tax deductions that are available to you is by working with a tax advisor.
A tax advisor can help save you money on your taxes and also ensure that your taxes are filed correctly and on time. Talk to a certified tax pro from Shared Economy Tax today to get an expert take on your Turo taxes. Get started today with a one-on-one strategy session with one of our certified tax experts today! For even more Turo tax tips, subscribe to our free newsletter.