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Im interested in how this works on the dealer side. Most dealers don’t own their inventory, they’re financed through “floor planning” companies like AFC. Deale
by blhack 7y ago
Im interested in how this works on the dealer side. Most dealers don’t own their inventory, they’re financed through “floor planning” companies like AFC.
Dealers pay substantial fees for the short term credit required to keep these things on their lots.
It seems like bad business to pay a huge finance fee only to rent the car out and have it not be on your lot anymore.
I’m also pretty curious about the tax and registration implications here. Dealers currently enjoy very different insurance, tax, and registration modalities than consumers do. State regulatory bodies are really sensitive to fraud in this space (getting a dealers license so you don’t have to pay tax on your super car is a common structure). If you are now buying/financing vehicles for the purpose of renting them out, it seems like you’re in a different classification than an automotive dealer.
Seems to me that targeting consumers a la Turo is much smarter. Curious the rationale surrounding this model.
- amosgewirtz 7y agoOnce floor planning and depreciation are factored in, it still makes sense to put certain new cars on our platform, because off the lot depreciation is less substantial and rental revenues thus offset these costs. On other cars, namely luxury cars, you're absolutely right that it's not profitable to put new cars on our platform (though it still makes financial sense for used luxury cars). The reason we're targeting institutional owners (i.e. dealerships) rather than individual owners a la Turo is because it's generally less expensive to acquire dealership cars (i.e. much easier to onboard a dealership group with hundreds of cars than to get consumers one by one).
- vl 7y ago> to put certain new cars on our platform “New” cars? Wouldn’t the act of renting them out transform them into used cars and illegal to sell as new?