Your car, sitting around unused, could be an untapped source of income. Renting it out through a peer-to-peer platform, like Turo or Getaround, could generate significant cash while breaking the idleness cycle. Here is a comprehensive guide on how to rent out your car and what you should look out for while renting it out.
Turn Your Idle Vehicle into Income: Rent Your Car Out
Like Airbnb, renting out your car will make you a part of the gig market. A supplemental income in hand is not very bad, is it? Furthermore, if you live in an area with ample public transportation, then it is certain that you might not use your car daily. So, renting it out can be a good option.
Companies like Turo, Getaround, and Hyrecar help you rent out your car. However, there is a checklist that you must consider before proceeding with renting out. What are the possible drawbacks of renting out your car? How much can you make if you rent your car out?
Convenience vs. Cost: The Pros and Cons of Renting Out Your Car
It is always advisable to run a benefit and risk analysis before venturing into something new. Here are the possible risks and benefits of renting your car.
Pros
- Generate passive income effortlessly while your car is idle.
- Flexible control over rates and scheduling through car-sharing platforms or private rental choices.
- If your car is of minimal use, allowing others to drive it can help maintain its condition. Potential eligibility for tax deductions if you operate car renting as a small business.
Cons
- Increased wear and tear due to extended use may lead to higher maintenance and fuel expenses.
- Despite not driving, managing the rental process, coordinating schedules, and meeting renters for key exchanges is necessary.
- Reviewing your insurance policy and additional coverage might be required.
- Check if the app offers coverage upon registration.
- There is a potential risk of car damage or the need for repairs when unfamiliar individuals use your vehicle.
How to Rent Your Car Out
- Through Rental Platforms
You can choose to rent your car out on your own or through rental platforms that help you display its availability for rent.
- Determining Eligibility
Not every car or every car owner can rent out their car. So, one must check if the car meets the required criteria before renting out your car.
- Auto Insurance
Firstly, confirm if your car insurance meets the minimum requirements of your state and the rental company. In addition, if you are opting for peer-to-peer car-sharing services, check for supplementary protection plans.
- Age, Mileage, and Title History
Every car slotted for renting out should be within the designated age and mileage limits. Similarly, a clean title history is essential without any trace of being a salvage car or a total loss.
- Car Value
If you own a car with a high value, ensure the value assigned is high, then check if its value matches what will be assigned in the chosen platform.
Image Credits: Pormezz on Adobe Stock
Notifying Your Insurance Company
Inform your car insurance provider about renting out your vehicle. For instance, some car insurance policies may prohibit commercial uses like car sharing. Therefore, notifying your provider about this can help you understand the possibilities and requirements and avoid unexpected cancellations.
Registering with the Rental Service
You should register your car on the rental platform once it meets the eligibility criteria and your insurance is in order. You should provide the necessary details as mentioned.
- Provide detailed information about your car.
- Upload photos or allow the rental service to handle this step.
- Specify the dates of availability.
- Attend training sessions provided by the service.
- Opt for the service’s insurance options for coverage during rental periods.
Monitoring Rental Requests
Upon receiving a request, you can approve or decline the rental. However, if you have accepted the order, coordinate the pickup and return details directly with the renter.
Inspection and Documentation
Conduct a comprehensive inspection of your car each time it’s returned. Document any damages promptly to report issues to the rental agency for necessary action.
This will help streamline the process of renting your car and ensure compliance with the rental service’s requirements.
What are some of the platforms which can be used to rent out your car?
Turo, HyreCar, Getaround, Uber, and Lyft are common platforms for renting a car.
| Car Sharing Apps | Which one should you opt for? |
| Turo |
|
| Getaround |
|
| HyreCar |
|
| Travelcar |
|
| Avail |
|
However, you can also use Uber and Lyft to rent out your car. For instance, both these apps partner with HyreCar to rent your car for these apps. Therefore, after listing it on HyreCar, if your car meets the Uber/ Lyft standards, it becomes eligible to be rented out.
Can I rent out a car on my own?
You can certainly rent out your car independently without going through car-sharing platforms. However, if you are taking this route, it requires a few extra steps
Firstly, finding potential renters might require extra effort, as you should find them on your own instead of on a rental platform.
Secondly, check whether you have enough coverage as you oversee the rental process. You’ll require rental insurance coverage to proceed with the process.
Furthermore, draft a rental agreement or contract with a legal professional outlining the rental terms and conditions, which will clarify and protect both parties involved.
Even though you’ll have more control over the process and the clients, it requires constant attention regarding marketing, insurance, and other legalities.
Car Sharing and Car Rentals: Spot the Difference!
- Pickup: Car sharing offers neighborhood flexibility, while rentals have designated locations.
- Vehicles: Sharing provides diverse owner options, while rentals offer standardized fleet choices.
- Cost-effectiveness: Sharing shines for short trips, while rentals fare better for longer journeys.
Bottom Line
Renting out your car is a feasible way to make some extra money, especially if you have a car that you seldom use. However, it involves paperwork, prompt insurance payments, and regular inspection after every ride. Furthermore, among the different platforms available, you should choose the one that aligns with your needs and demands and matches the value of your car and you as the car’s owner.
Can renting out my car be profitable?
Yes, renting your car gives you an extra income source. However, the amount you get will entirely depend on the demand for the car, location, pricing, etc.
Do car rental companies make money?
Yes, car rental companies make a good profit of approximately 6.7%, which is about $1.14 million annual profit.
Is it safe to rent out my car?
Yes, it is entirely safe to rent out your car if you take some precautions. Some important precautions to take before renting out your car are renewing insurance at the right time, checking about your renters, inspecting your car thoroughly after renting it out, maintaining a car in good condition, and continually checking the GPS location of your car.
How to rent out your car?
Sara Sam may not look like your typical car and finance expert, but don’t let that fool you. With over four years of experience in the industry, she knows all the ins and outs of cars, car insurance, and refinancing. You can trust Sara to help you navigate the often-confusing world of automobiles and financing.
