Buying cars to rent them, the booming business of these individuals

While working on a master’s degree in economics at the Sorbonne, Ayman projected himself into finance. He saw himself working in bank compliance for a large corporation. Since then, his plans have changed. In March 2020, while in master 1, he bought a used Renault Modus for 5,000 euros to rent it out. Others will follow. And what was supposed to be an extra income has become… a full-time professional activity.

The 24-year-old young man threw himself fully into the adventure with Pierre, a friend who was then employed in a real estate agency. The duo rents its vehicles on Getaround (formerly Drivy) and OuiCar, two leading peer-to-peer car rental platforms in the French market. Drivers can rent vehicles there for a few hours, days or weeks. Among the owners registered on these sites, two profiles: those who rent out their personal vehicle that they do not use daily to amortize the cost of acquisition and maintenance, and the others, such as Ayman and Pierre, who buy vehicles without drive. them, to obtain a profit.

They are established in several cities. Very quickly they realize that there is a strong demand and increase their fleet. Today they have no less than 22 vehicles (city cars, utilities and station wagons) and aim for 34 during the summer. “We didn’t imagine it could be such a success”, smiles Pierre, 28, who has resumed work-study studies in property development. To support them, they employ a part-time administrative assistant.

Connected boxes for simplified control

Their vehicles are parked in Brest, Quimper, Limoges, Poitiers, Orléans, Dijon, Besançon… If this logistics is possible, it is thanks to the connected boxes that the platforms offer. These allow renters to unlock the vehicle with their smartphone, collect the keys and return them at the end of the rental without meeting anyone. Enough to offer great flexibility that traditional rental agencies don’t necessarily have.

Of course, this service comes at a price. Getaround’s connected box costs 19 euros per month per vehicle – costs are borne by the owners. In order to benefit from it, the vehicle must, among other things, be less than 10 years old and less than 150,000 kilometers on the odometer. With OuiCar, you count 29.90 euros per month for a box.

If these boxes amputate their income, the duo will find their account there. “It gives us a rather passive management”, enthused Pierre and Ayman, who still have to travel across France to clean their vehicles once a week. They can now count on the help of Ayman’s brother, Mehdi, a civil servant, who has joined them.

Luke, 34, prefers to do without the till and hand over the keys. He can afford it because his 15 vehicles are concentrated in the Toulouse urban area, near his home.

He is also dedicated to his rental business. When he started in 2019, he was a project manager in aeronautics and wanted to generate additional income. Laid off in the summer of 2020 in the middle of a pandemic, he decided to devote himself to it together with his wife, who left her job as a switchboard.

Sub-rental of cars

Their cars are rented out on OuiCar, Getaround and a site the couple has set up. “We make enough profit to be able to live decently, Luke explains. I earn about the same as in my previous job, and my wife a little more. » And to add: “With the difference that now we manage our time, our investments, that we have a better quality of life. »

To achieve this, they dipped into their savings and reinvested all their earnings in acquiring new vehicles. But not everyone who rents out cars on platforms owns them.

Emile, a 27-year-old developer based in Paris, didn’t have enough savings to buy the five vehicles he wanted. So he found a leasing company that he leases cars to…sublease them.

He pays 250 euros a month for each of the five rented Volkswagen Polos. In addition, 100 euros for parking in Paris and in the suburbs and 150 euros for insurance per vehicle. This is a cost of around 500 euros per month and per vehicle. “I rent them out for 50 euros a day. After the 11e rent day, so the money is smoking in my pocket. » Over a year, he aims for 15,000 euros in profit with five vehicles, or 3,000 euros per car. He intends to increase his fleet and become its owner in order to “to earn enough income to hire someone to take care of it”.

Taxation and restrictions

Of course, taxation erodes profitability. Owners who lease vehicles must declare the income they receive from them for tax purposes. From 8,227 euros per year, they must register their activity (according to the general scheme, as micro-entrepreneur or self-employed) and pay social security contributions.

And this activity requires some logistics. Emile vacuums each of his vehicles at least once a week. He must also transfer the fines he receives to the motorists and regularly go to the workshop, in case of breakdown or damaged bodywork. Insurance policies for Getaround and OuiCar, included in the 10% commission they deduct from the price quoted by the rental companies, generally allow him to repair his vehicles without incident.

In the event of a serious accident, the vehicles may not be put back into service and may be scrapped. It happened with several of Luke’s cars whose tenants had been in an accident. “In these cases, we have to buy a car immediately with our savings and wait for the insurance to reimburse – which takes a month and a half on average. But if we don’t have cash, we give up cash flow for weeks…” Another element to keep in mind: unlike real estate, where the seller of a property can make money on resale, cars see their value decrease.

Some people are saved from buying cars they would use a little

Tom, owner of three cars

Despite these limitations, this type of investment is attractive. Tom, a 22-year-old salesman, took the plunge in the summer of 2021. He owns three vehicles bought for a total of 28,000 euros and rented in Vaucluse. “I didn’t have enough to invest in real estate, and it turned out to be a good investment! » He generates about 600 euros in profit every month. Beyond the monetary stake, he insists that this investment seems virtuous to him: “We prevent some people from buying cars they would use a little. »

What reassures him in this business: being able to bounce back easily if profitability collapses. “All you have to do is remove the vehicles from the platforms with a few clicks and resell them. » But this is not relevant. For now, the young man hopes to increase his fleet… for him too, why not make a living from it.

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