Idea: Buying a Car for Short-term rental and then Re-sell?

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MortgageOnBlack
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Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

My fiancee and I are planning a destination wedding in CA that we would like to include our dog on. Flying is not an option for us at this point and a midsize SUV/crossover is the perfect size for what we want to do (we don't mind the cost in gas for the road trip experience). We have found that midsize SUV rentals are going for around $1400-1800 for the amount of time we will be traveling to/from CA (about 2 weeks). Although the idea sounds a little crazy, is there any possibility that we can buy a vehicle with the intent on "using" it for 2 weeks to a month and then reselling it? I can't imagine that that it would depreciate too much, but I am concerned about the costs involved with registering it/taxes. Would this still apply if we kept it for a short amount of time? The other thought of buying this vehicle with the intent of using it on Turo for a while has crossed my mind as well (still an option)

Our vehicles are not adequate for a long roadtrip (all older) and renting one for the trips seems to be the best idea. Of course, my mind is starting to wonder if there is an opportunity to buy/resell it instead. I realize vehicles are depreciating assets, but I can imagine the value would drop that much on a used vehicle for the amount of miles we would put it on it (especially with the rise in used vehicle prices). I appreciate any ideas.
Thanks
28fe6
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by 28fe6 »

Definitely not worth it vs. $1800.

Don't forget that in many states you have to pay sales tax on a car purchase, and you don't get that refunded when you sell it.

I do wonder if you could somehow avoid ever getting a proper license plate...most states give you up to 30 days to get a car licensed after you buy it...there may be a loophole there, but I would not advise driving across the country on temporary plates.
bubbadog
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by bubbadog »

The sales taxes on a relatively new vehicle, capable of a long road trip, will likely cost as much or more than the price of a rental.

For example, a $23,000 vehicle at 7% sales tax is about $1,600.
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gwe67
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by gwe67 »

Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
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leeks
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by leeks »

Better plan is to just upgrade one of your cars to a new one now (suitable for all your future vacations, since the dog will continue to be an issue) and sell the old one. If you want the space for this trip, you will want it for the next one too. I would not mess with Turo.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by interwebopinion »

A friend who was in the area for a month did this, but with a used car. This was a few years ago. He spent ~$5k for an older Civic, used it for a month, and then had his friend sell it for him. He actually managed to sell it for slightly more than he bought it for.

Not sure if that's an option for you, but with the current solid used car market situation, I wouldn't expect prices to drop significantly over a month.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by Watty »

leeks wrote: Wed Jun 09, 2021 1:28 pm Better plan is to just upgrade one of your cars to a new one now (suitable for all your future vacations, since the dog will continue to be an issue) and sell the old one. If you want the space for this trip, you will want it for the next one too. I would not mess with Turo.
+1

You should also be able to get top dollar for one of your older cars that you sell or trade in. You might be surprised but what sort of price CarMax, Carvana, Vroom, etc will pay for it.

I bought a new Subaru Forester about a month ago and they did not seem to be charging a premium price them because of the chip shortage, but I had to shop around and the market may have changed in the last month.
Last edited by Watty on Wed Jun 09, 2021 3:02 pm, edited 1 time in total.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by sec_vol »

gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
There's a mileage maximum CarMax allows within the 30 days to avoid this.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by galawdawg »

gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
You aren't really suggesting that the OP do this, are you???? Wow.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by 2tall4economy »

You’ll pay taxes and the dealer margin (which they pretend is depreciation). So the car value won’t change but you’re losing as much as 20% of the purchase price to tax and dealers.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

It really feels like I need to get a really good price on a vehicle to make this deal worth considering. I'll probably to move forward with the rental, but it really bothers me to throw this much money for a rental that can be used to purchase something newer. Rentals seem very expensive this time of year.

Also, we'll be driving pretty close to 3,000 miles round trip (for reference). Reliability and comfort (AC) is a high priority.

We have an SUV (15/17mpg), but looking for something with much better gas mileage that can fit my fiancee, myself, and our large Golden Retriever. Not to mention we will also have a few things of luggage. The Subaru Forester we rented for our Yellowstone trip was perfect and had great gas mileage.
Last edited by MortgageOnBlack on Wed Jun 09, 2021 3:31 pm, edited 2 times in total.
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gwe67
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by gwe67 »

galawdawg wrote: Wed Jun 09, 2021 3:02 pm
gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
You aren't really suggesting that the OP do this, are you???? Wow.
Is that illegal? OP may like the vehicle so much that he/she keeps it. OP also didn't mention the mileage to be put on the vehicle. The taxes/fees for returning it to Carmax may be comparable to cost of renting, but with the bonus of a long test drive with option to keep.

If OP is 100% sure he/she would not under any circumstances keep the vehicle, then no, skip the Carmax idea.

And....I was recently burned by a vehicle "reservation" with Enterprise. When I arrived to pick up the vehicle, none were available.
Last edited by gwe67 on Wed Jun 09, 2021 3:30 pm, edited 1 time in total.
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MortgageOnBlack
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

gwe67 wrote: Wed Jun 09, 2021 3:29 pm
galawdawg wrote: Wed Jun 09, 2021 3:02 pm
gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
You aren't really suggesting that the OP do this, are you???? Wow.
Is that illegal? OP may like the vehicle so much that he/she keeps it. OP also didn't mention the mileage to be put on the vehicle. The taxes/fees for returning it to Carmax may be comparable to cost of renting, but with the bonus of a long test drive with option to keep.

If OP is 100% sure he/she would not under any circumstances keep the vehicle, then no, skip the Carmax idea.
Just edited my other post.... close to 3,000 roundtrip is expected for this trip (about 1,200-1,300 each way plus driving in California)
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

It is of great concern that the midsize SUV we have reserved from Enterprise won't be available (or worse yet, a completely full size SUV with terrible gas mileage). Purchasing a vehicle will ensure we get exactly what we will be happy with for this trip. Gas mileage risk is of great concern and does help justify taking the plunge on a vehicle.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by hudson »

MortgageOnBlack wrote: Wed Jun 09, 2021 12:24 pm My fiancee and I are planning a destination wedding in CA that we would like to include our dog on. Flying is not an option for us at this point and a midsize SUV/crossover is the perfect size for what we want to do (we don't mind the cost in gas for the road trip experience). We have found that midsize SUV rentals are going for around $1400-1800 for the amount of time we will be traveling to/from CA (about 2 weeks). Although the idea sounds a little crazy, is there any possibility that we can buy a vehicle with the intent on "using" it for 2 weeks to a month and then reselling it? I can't imagine that that it would depreciate too much, but I am concerned about the costs involved with registering it/taxes. Would this still apply if we kept it for a short amount of time? The other thought of buying this vehicle with the intent of using it on Turo for a while has crossed my mind as well (still an option)

Our vehicles are not adequate for a long roadtrip (all older) and renting one for the trips seems to be the best idea. Of course, my mind is starting to wonder if there is an opportunity to buy/resell it instead. I realize vehicles are depreciating assets, but I can imagine the value would drop that much on a used vehicle for the amount of miles we would put it on it (especially with the rise in used vehicle prices). I appreciate any ideas.
Thanks
MortgageOnBlack,
I vote: rent
Buying a car is a pain; selling is a bigger pain. Chances are you would take a large haircut on the buy-sell deal. I wouldn't do it even if I made a profit.
If appropriate, buy it and keep it for 10 years?
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

Just realized… we also have another 4-5 day trip planned for Yellowstone in August (our dog is coming too). Makes purchasing something sound better and better
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by leeks »

MortgageOnBlack wrote: Wed Jun 09, 2021 3:35 pm Just realized… we also have another 4-5 day trip planned for Yellowstone in August (our dog is coming too). Makes purchasing something sound better and better
If you were happy with a prior Forester rental, just buy one and keep it.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by SuzBanyan »

If you decide to rent, make sure you understand the agency’s pet policies. Some may require the dog to remain in a crate whenever in the car.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by Jack FFR1846 »

Dealers make $2k or more selling a used car. So if you plan to buy, drive it, then sell it to a dealer, expect to lose that $2k plus the tax, registration, title. On a $15k car in my state, that's $1072.50. So now you'd be out three grand. I would agree with many other posters.....sell or trade in one of your old cars, get this SUV and keep it.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by anon_investor »

Jack FFR1846 wrote: Wed Jun 09, 2021 6:08 pm ... I would agree with many other posters.....sell or trade in one of your old cars, get this SUV and keep it.
+1.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by slidecreek »

If you live in a no sales tax State, this could be worth it.

I know somebody who would buy a newish vehicle in Oregon each spring and drive it to Alaska for their seasonal job. At the end of the summer, they were always able to sell it for more than they paid and then fly home.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by sureshoe »

gwe67 wrote: Wed Jun 09, 2021 3:29 pm
galawdawg wrote: Wed Jun 09, 2021 3:02 pm
gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
You aren't really suggesting that the OP do this, are you???? Wow.
Is that illegal? OP may like the vehicle so much that he/she keeps it. OP also didn't mention the mileage to be put on the vehicle. The taxes/fees for returning it to Carmax may be comparable to cost of renting, but with the bonus of a long test drive with option to keep.

If OP is 100% sure he/she would not under any circumstances keep the vehicle, then no, skip the Carmax idea.

And....I was recently burned by a vehicle "reservation" with Enterprise. When I arrived to pick up the vehicle, none were available.
There are lots of unethical activities that aren't illegal. People go to Disney and ask their children to fake disabilities so they can skip lines. Not for me, but to each their own, Carmax knows it's a cost of doing business. Disney had to change the policy. Is what it is.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

Surprisingly, I was able to get a 30-day rental for around $1750. It seemed the rate on a month long rental was more favorable than booking my two trips separately. As it stands, I will stick to this, but keep checking back to see if I can get a better rate. Of course, the prospect of buying a car I would be happy with keeping is not completely off the table. For it to fit the bill, I need a hatchback style vehicle with enough space for a large dog (90 lbs!) and some luggage (including a wedding dress) - great gas mileage and long-term reliability. A cost of around $15k-20k max... needs to have rock solid AC and be trust worthy enough to not leave us stranded.Will window shop for a bit...
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by Stinky »

galawdawg wrote: Wed Jun 09, 2021 3:02 pm
gwe67 wrote: Wed Jun 09, 2021 1:28 pm Carmax gives you 30 days to return a purchased vehicle. I don't know what taxes/fees you might be out if you did this. Also don't know what tax rate your state uses for vehicle sales.
You aren't really suggesting that the OP do this, are you???? Wow.
CarMax has a 30 day return policy, 1500 mile maximum.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by eye.surgeon »

MortgageOnBlack wrote: Wed Jun 09, 2021 12:24 pm Our vehicles are not adequate for a long roadtrip (all older)
If your current vehicle(s) aren't adequate for your needs maybe upgrading it is the best option.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by TexasPE »

MortgageOnBlack wrote: Thu Jun 10, 2021 1:15 pm Surprisingly, I was able to get a 30-day rental As it stands, I will stick to this, but keep checking back to see if I can get a better rate.
Suggest you input your reservation data into

https://www.autoslash.com/track

Autoslash will track your reservation and let you know if a better price is found.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

pick-up is 7/6/2021, 5:30pm... drop-off is 8/6/2021, 5:30pm.
waiving the insurance from the Car Rental company to use my credit card insurance (Chase), but noticed a clause "Vehicle rental periods that do not exceed nor intend to exceed 31 consecutive days"

Perhaps, I'm taking this literal, but we will be right at 31 days with the times mentioned above. Do they count 7/6 at Day 1? If so, this will be a 32 day rental and my insurance will be void. Any concerns for this? This is for the damage to vehicle. Of course, I am going to check my auto insurance for liability for other vehicle/medical, etc...
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by gwe67 »

MortgageOnBlack wrote: Thu Jun 10, 2021 7:09 pm pick-up is 7/6/2021, 5:30pm... drop-off is 8/6/2021, 5:30pm.
waiving the insurance from the Car Rental company to use my credit card insurance (Chase), but noticed a clause "Vehicle rental periods that do not exceed nor intend to exceed 31 consecutive days"

Perhaps, I'm taking this literal, but we will be right at 31 days with the times mentioned above. Do they count 7/6 at Day 1? If so, this will be a 32 day rental and my insurance will be void. Any concerns for this? This is for the damage to vehicle. Of course, I am going to check my auto insurance for liability for other vehicle/medical, etc...
What is "Plan B" when they tell you that there are no vehicles available?
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by MortgageOnBlack »

gwe67 wrote: Thu Jun 10, 2021 7:14 pm
MortgageOnBlack wrote: Thu Jun 10, 2021 7:09 pm pick-up is 7/6/2021, 5:30pm... drop-off is 8/6/2021, 5:30pm.
waiving the insurance from the Car Rental company to use my credit card insurance (Chase), but noticed a clause "Vehicle rental periods that do not exceed nor intend to exceed 31 consecutive days"

Perhaps, I'm taking this literal, but we will be right at 31 days with the times mentioned above. Do they count 7/6 at Day 1? If so, this will be a 32 day rental and my insurance will be void. Any concerns for this? This is for the damage to vehicle. Of course, I am going to check my auto insurance for liability for other vehicle/medical, etc...
What is "Plan B" when they tell you that there are no vehicles available?
Picking up 7/6, but won't need until 7/9. Have a backup rental at Enterprise for 7/9 pick-up that I will cancel if not needed. Also, if no vehicles available, I can put pressure on Budget to have one ready by 7/9 that is acceptable in the class we desire. I imagine this should be something I can pull off. Plan C? Maybe buying an impulse car and enjoy it.
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Re: Idea: Buying a Car for Short-term rental and then Re-sell?

Post by gwe67 »

MortgageOnBlack wrote: Thu Jun 10, 2021 7:20 pm
gwe67 wrote: Thu Jun 10, 2021 7:14 pm
MortgageOnBlack wrote: Thu Jun 10, 2021 7:09 pm pick-up is 7/6/2021, 5:30pm... drop-off is 8/6/2021, 5:30pm.
waiving the insurance from the Car Rental company to use my credit card insurance (Chase), but noticed a clause "Vehicle rental periods that do not exceed nor intend to exceed 31 consecutive days"

Perhaps, I'm taking this literal, but we will be right at 31 days with the times mentioned above. Do they count 7/6 at Day 1? If so, this will be a 32 day rental and my insurance will be void. Any concerns for this? This is for the damage to vehicle. Of course, I am going to check my auto insurance for liability for other vehicle/medical, etc...
What is "Plan B" when they tell you that there are no vehicles available?
Picking up 7/6, but won't need until 7/9. Have a backup rental at Enterprise for 7/9 pick-up that I will cancel if not needed. Also, if no vehicles available, I can put pressure on Budget to have one ready by 7/9 that is acceptable in the class we desire. I imagine this should be something I can pull off. Plan C? Maybe buying an impulse car and enjoy it.
Pre-paying for the rental may help. I only had a "reservation" which wasn't sufficient to get me a vehicle.

Seinfeld - What's the Point of a Reservation
https://www.youtube.com/watch?v=ZTvtSKXwu0o
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