We've all had that friend who rents out their apartment, condo, or house on Airbnb while they're not using it. But have you ever considered using a car rental company or app to make somewhat passive income?
In this article, I’ll cover what peer-to-peer car sharing is, the benefits and drawbacks of using a company like Turo or Hyrecar (and more) to make extra money, and whether or not you should rent your car out.
What is Car Sharing?
Car sharing is a relatively new concept that allows you to rent out your car when you're not using it — kind of like an Airbnb for cars. Renters list their cars, and rentees select what they are looking for.
How Does Car Sharing Work?
You rent out your car almost exactly the same as a traditional car rental company. However, instead of meeting up with another person on the side of the road, customers rent through an online app and communicate directly with you!
How you rent is also up to you. You can rent by the hour, day, week, month — it's up to you and what you think would be a fair price for your car and interested customers.
Personal car rental may seem a little scary, but it's a great way to make extra money! All you need is a decent car and the willingness to open your car up to strangers. This has its benefits and drawbacks, of course.
Car Sharing vs. Car Rental
Both car share and car rental companies offer a similar service: providing cars temporarily for those who need it. There are a few key differences, though. Large car rental companies own their own vehicles, known as a fleet. On the other hand, car sharing allows individuals to rent out their personal vehicles through a company or app and is typically cheaper than traditional rental companies.
Which is better? The answer isn't so cut and dry: it depends on the needs of the renter and rentee. Car share rentals are typically cheaper, and some companies are more lenient about the age of the rentee. Car sharing is great for people who live in cities who do not own a car and need one here and there. While most car rental companies have a minimum age of 25, some car-share companies allow adults as young as 18 to rent a vehicle.
Traditional car rental companies usually have a larger selection of vehicles and locations, offer rewards programs, and oversee regular maintenance on their vehicles.
How to Rent My Car
Do your research and sign up with your preferred car-share company or app. They will evaluate if your car is eligible by checking your vehicle mileage (they prefer low miles), condition, history, and any other unique requirements they may have. Once approved by the company, your car will be added to the website, where your vehicle will be listed to potential rentees.
If interested, a renter will then contact you through the website and rent your car based on the car share company's guidelines and procedures. When rent is complete, payments are usually handled through the company or app.
4 Best Peer-to-Peer Car Rental Companies
Car share rental companies are not all created equal. Check out a few options below that have gained popularity over the last couple of years.
Hyrecar is a car sharing company that allows car owners to list their vehicle on the Hyrecar platform. Signing up is free and can be completed in just a few minutes. Listers will create a description for their vehicle and can include pictures for renters.
In order to rent out your vehicle, you need to ensure that your registration is up to date, your car has a current state inspection, and is insured. Additional insurance coverage can be taken out. The amount of additional insurance coverage affects how much Hyrecar keeps as a commission.
Car owners set a rental price and coordinate pick-up and drop-off with interested renters. Once the car owner approves the renters application, the renter is charged and the direct deposit is on its way.
Turo, previously called Relayrides, allows car owners, referred to as hosts, to list their vehicle for rent on the Turbo App. Once you set a price and maximum travel range for your vehicle, prescreened renters can select your vehicle. Turo includes $750,000 in Travelers insurance, in addition to other plans hosts must choose from to protect their vehicles. The insurance plan you choose affects the money deducted from the renter's trip price.
According to Turo's website, renting out one vehicle brings in an average of $10,516 per year. To list your car on Turo, it cannot be over 12 years old and cannot have more than 130,000 miles. When signing up, you must provide your vehicle's VIN number, make and model, a least one picture, and current mileage.
Getaround offers both hourly and daily rental options. Car owners set specific criteria such as rate, availability, and vehicle description on the app for renters to choose from. Getaround offers protection for car owners through their "Getaround’s Connect system," where GPS is used to track and communicate with renters. This system is used to lock and unlock the vehicle, and comes with an engine lock in case any questionable activity is detected.
To qualify to rent out your vehicle, your car must have less than 125,00 miles and be at least a 2005 year model. Once you apply, create a listing and start connecting with renters. Both owners and renters are prescreened. Getaround keeps 40% of earnings and charges a $20 fee every month. Owners are also responsible for the $99 cost of the Getaround Connect System.
Avail is another car-sharing company where individuals can rent out their vehicle. Unlike the other companies in this article, Avail specifically targets airport locations. Car owners can earn up to $25 dollars while away on vacation if someone chooses to rent their vehicle.
Automatic gas-powered car models 2013 and newer with less than 125,000 miles are eligible. Avail does not accept electric cars, pick-up trucks, or two seater vehicles. Avail monitors your car's location at all times while being rented and provides up to $1 million in liability insurance. All car owners need to do is set up their account and register when they are away to allow renters to book the vehicle.
Cars can be rented to adults 18 or older as long as they possess a valid driver's license. Renting with Avail comes with Allstate insurance where renters can take advantage of roadside assistance if needed. Renters are only able to drive up to 150 miles per day without the cost per mile increasing.
Considerations for Renting Out Your Car
When renting out your vehicle, you want to make sure you are appropriately compensated. It is wise to consider costs associated with using your vehicle as a source of income. Renting your car out can increase maintenance costs and costs to cover cleaning or damage left by the renter. When choosing a company or app to rent out your vehicle, make sure you understand how much you will walk away with after any additional maintenance projections, additional insurance policies, and/or commissions or fees taken out of your pay.
When researching, be sure to investigate if any additional insurance policies will need to be purchased or deducted from your income.
Pick-up and drop-off are important factors to consider. When renting out your vehicle, it is reasonable to want renters to return the car in the same condition they borrowed it. Not everyone respects property in this way.
Many car-sharing companies and apps prescreen renters, however, all renters may not be ideal. Be sure to review the car-sharing company's guidelines and protocols for renters who have caused damage, returned the vehicle in unsavory conditions, who have stolen property, or who may have used the vehicle for any illegal activity.
Legal and Liability Issues
There is potential for confusion around who is liable in the case of an accident. Be sure to check with the company's guidelines and review any contracts or forms before signing to see if you are liable for any injury or damage and if you have to take out additional insurance.
The Final Word on How to Rent Out Your Car
Car-sharing is an emerging market, so it's difficult to say who the best providers are. You should keep in mind a few things when renting your car out: insurance policies, vehicle cleanliness, legal issues, and profitability. When choosing a company or app to rent out your vehicle, make sure you understand how much you can make in addition to the associated costs. Do your research and let me know how it goes!
Renting out your car as a rental vehicle can be profitable, but how much you make depends on factors such as the type of car, how often you rent the car out, how many cars you have (if you have one or more), and costs that must be deducted from the rental income.
A luxury vehicle will typically make more money than a personal vehicle or truck. A long rental period will bring in more cash than a short one. Time of year will also affect rental prices. For example, holidays will increase potential earnings. Generally, renting out your vehicle is best used for passive income.
Some car-sharing companies claim that you can make up to tens of thousands of dollars per year in extra income renting out your vehicle. However, there are many factors at play. Typically, individuals making that much per year renting have multiple cars to rent and rent these cars out very frequently.
Many car-sharing companies provide coverage but require car owners to buy additional insurance policies.
Yes, it is possible to rent your car out for advertising purposes. However, this typically does not pay as well as other rental options.
Yes and no. Uber has approved partnerships with rental companies. Only these approved companies can be used if an uber driver needs to rent a car. Car-sharing is unlikely to be an approved partner.