Ted has been a mechanic for more than 40 years. He knows cars. But more than that, he has access to a steady stream of reliable, well-priced vehicles too. And one thing he’s always wanted to do was rent these out to grow his passive income.
Talking to friends who worked for traditional hire car companies, the main hurdle has always been the insurance he'd need. “Insurance has always been the unknown. The grey area.”
When Ted looked into Uber Carshare and realised that the on-trip damage and loss cover was all taken care of, it sealed the deal.
So he found the right vehicle at the right price, servicing it thoroughly for long-term reliability and peace of mind, then listed it to share.
How'd it work out, after all those years of wishing it were possible?
The vehicle paid for itself in just three months.
Building a fleet
Ted now has three cars listed on Uber Carshare and has made a detailed business plan. He’ll form a separate company, aiming to own and share 10-12 vehicles within the next 12 months.
From the beginning of our chat, Ted felt like someone you could share a beer and a yarn with. Switched on, but open and welcoming. We couldn’t resist picking his mechanic brain for free advice. How does he choose his vehicles to buy and share?
As it turns out, his advice was pretty simple – get an automatic Toyota.
“I rarely see Toyotas in my workshop. And when I do, parts are readily available at good prices. You’ll keep your costs down and get your car back on the road quickly. Just make sure it’s easy to drive and has a little bit of wear and tear on it already. So you don’t have to be too worried about it.”
The other thing he stressed was to make sure you get it at the right price.
“I can have an asset that might have cost me five grand, and it’ll earn me about $1,000 a month in profit. Someone else might have spent 20 or 30 grand on a similar vehicle, only newer, and it still earns them the same net amount per month.”
Obviously, this may differ between vehicle types, but Ted’s borrowers need utility vehicles, not flash ones.
Finding the right car (when you’re not a mechanic)
Now we’re not all mechanics with Ted’s established connections to well-priced, reliable cars. But that doesn’t mean you can’t hunt down a bargain for yourself. Here are some tips for you:
- Know the market value of the vehicle you’re looking at.
- Don’t be swayed by emotion when you’re buying.
- Have your vehicle checked by an independent mechanic before you buy.
- Be patient, the right vehicle will come in time.
Websites like Redbook can help you learn more about market value.
Enjoying an impressive passive income
On average, Ted sees about $1,000 a month of profit per vehicle. He says that while there are risks and expenses involved in owning a fleet, like any good business, they can be managed.
“You can minimise the risk by purchasing the right vehicle to begin with, and keeping it well maintained with regular services and check ups.”
But Ted reminds me that you can do everything possible to reduce your risk, but something might still go wrong. It’s just life.
“I had one breakdown the very first time it was shared. And I drove that car for 500 kilometres before I put it out there.” So, expect the odd blip. That’s business after all.
Sharing in the regions
Ted spaces his vehicles out, but not so much that it becomes a long commute for him to access and maintain them. This helps him keep costs as low as possible.
“We went to the club last night to watch the footy. I dropped a mate off on the way back and swung past one of the cars. Had a quick look down the sides. Everything's in order. Today, it's getting shared.”
Living in regional NSW, he plans to stretch those limits eventually, and park a vehicle at the city limits to trial the longer distance. Although as things stand, the local area provides plenty of demand.
Ever the considered business venture, Ted is strategic about location choices too, choosing places where large numbers of people have easy access to the vehicles.
Balancing business with Uber Carshare
As an in-demand mobile mechanic, time isn’t something Ted has a lot of. We asked him how he finds the workload and balance between maintaining his Uber Carshare fleet and his established business.
“I’m 57. And you know what? I can still work like a Trojan. But I don’t want to. I work a bit smarter now."
"If I had to manage sharing the cars as well as dealing with the customer and dealing with damage and loss cover, I'd be struggling to do three or four vehicles. But all I’ve got to worry about is the vehicles. I don't have to worry about the person sharing, and definitely not the cover. So if I had the financing I could manage 20 vehicles.”
He explained a bit more, “Uber Carshare manages the people. They get them to the car and open the door. I just present the vehicle. The rest – that’s not my thing. I’ll go and do what I do best. And get the right people to do the other things. It’s perfect for what I need. Absolutely perfect.”
Interested in putting your car to work or starting a business like Ted? Learn more about sharing your car.
Hero image by Brina Blum from Unsplash.