Earning extra income has become a priority for many people, especially as rising costs put pressure on monthly budgets. One increasingly popular option is renting out a personal vehicle through car-sharing platforms that connect owners with drivers who need short-term transportation. Understanding how car rental platforms work, along with the responsibilities involved, can help you decide whether listing your vehicle is a practical way to boost your income.
How It Works
If you’ve ever used AirBnb (or a similar home-sharing service), you’ll know the basics. You take photos of your vehicle, list any important specs or key features, and set a rental price. You could rent it out by the hour, day, or even a week at a time. You can also unlist your vehicle during times when you need to use it yourself.
After that, random users can login to their accounts and browse available vehicles. If they select yours, the app facilitates payment from them to your account. You then make arrangements for the renter to pick up your keys and vehicle.
Why You Should Rent Out Your Car
Simply put, cars are expensive. We’re talking oil changes, gasoline, routine maintenance, renewing your license plates, and regular insurance premiums. So if you can off-set those costs by renting out your vehicle, why not take advantage?
There may be periods where your car is just sitting in your driveway, collecting dust. For example, maybe you take transit to work every day to avoid traffic and nightmare parking situations. Listing your car for rent from 9-to-5 while you’re at work doesn’t inconvenience you in any way. Same goes for when you leave the country on vacation for three weeks.
Lastly, renting your car could be seen an environmentally friendly. If those who already own vehicles are more willing to share with those who don’t, the demand for new vehicles would drop slightly. And the less vehicles we have on the roads, the happier the planet will be. Sure, we may be stretching a little bit to reach this reasoning, but it’s still a factor to consider.
Why You Shouldn’t Rent Out Your Car
Although earning some extra money is always nice, there’s a couple good counterpoints to renting out your car. First and foremost, you’re letting a complete stranger drive your vehicle. You have no idea if they’ll drive carefully, smoke inside, or leave coffee stains on your upholstery.
Your car insurance is a major factor, too. Most car-sharing networks suggest that your personal auto insurance policy will be the primary source for paying out any claims that may result from renting out your vehicle. However, most standard auto insurance policies also forbid using these car-sharing services in their fine print.
The Insurance Situation
If someone crashes your car, you could end up in a tricky legal situation. Your insurance could claim it’s not their responsibility. The car-sharing company might say the same thing. The driver who crashed your car will claim that it’s not their liability either, since they don’t own the car (or the insurance policy). So now what?
Well, you could wage a couple of exhausting court battles to try and get repaid the value of your car. You can also pre-emptively change your insurance policy to one that allows ride-sharing. However, you’ll likely see your premiums go up, eating into some of the profit you hoped to make renting your car in the first place.
How Much Can You Make Renting Out Your Car?
Since earning extra money is really the only reason you’d want to rent out your car to strangers, one burning question remains — how much can you make? Unfortunately, the answer varies widely depending on a number of different factors. Where you live is a big component, as different cities or states have different supply and demand ratios. The biggest factor, of course, is what kind of car you own.
If you own a powerful muscle car, reliable pick up truck, or exotic luxury vehicle, you’ll be able to charge more than if you own a basic sedan. Many people want to rent cars for a specific reason, whether they are moving to a new house or just want to drive a fancy car on their wedding day.
You can check out this calculator tool to see how much your specific type of car might earn in your local area. On average, though, these companies suggest you could earn somewhere between $5,000 and $30,000 a year. You should make sure you deduct the depreciation that these extra miles will have on the value of your vehicle though.
Minimum Requirements
Every one of these car-sharing services has a set of minimum requirements your vehicle must meet before you can rent it out. These rules are to make sure that people aren’t trying to rent out their broken down beaters, leaving customers in a potentially unsafe situation.
While each service is slightly different, your car typically needs to be less than 12 years old and have fewer than 125,000 miles on it. Some companies also require a clean title and must have a market value of under $200,000. Some exceptions can be made for specialty vehicles, but you’ll have to contact the company directly for a custom inspection.
Car Sharing Apps To Rent Out Your Vehicle
There are two main car sharing services. They depend on exactly what type of vehicle you have, and the needs of the person renting. There are general purpose apps, like Turo. There are also apps that suit very specific needs, like only providing cars at airports. Here are some of the best options for renting out your vehicle, if you want.
Turo
Turo is the largest and most popular car sharing site. They operate is all 50 states, in addition the Canada and the United Kingdom. You can find vehicles of all shapes and sizes on Turo. They do offer their own insurance (up to $2 million liability in Canada), but your take home revenue will take a hit if you opt for a low (or zero) deductible coverage type.
With Turo, you can rent your car out for a few hours, a few days, or even multiple weeks. Like home-sharing services, you’ll be able to see previous reviews of both the vehicle owners and those who rent them. It’s free to list you car and set your own price, but Turo takes a cut as the middle man.
Getaround
Getaround is pretty similar to Turo, except not as prevalent and only operates in Europe. While it has similar requirements for which vehicles are eligible, it’s a bit costlier. Why would you pay those extra fees? Well, Getaround’s main business model is to attract “power hosters.” That’s their name for people who have multiple cars (even a small fleet) to rent out. If you’re thinking of renting out a handful of separate vehicles, Getaround might actually make more sense.
The Bottom Line
You absolutely can make some extra money by renting out your car during times when you’re not actively using it. How much, though, depends entirely on the kind of car you own and where you live. Supply and demand is always a factor, after all.
Before you rent out your vehicle, though, you should carefully weigh the pros and cons. While some of these services do offer their own insurance or protection plans, you’re still giving up your car to a stranger. If something goes wrong, it’s likely going to create headaches — even if you do eventually get reimbursed for any damage.
