How to make money by renting out your car
The costs associated with car ownership can add up over time. So, if you’re not using your vehicle on a daily basis, you may be interested in finding out how you could recoup some of these costs by renting it out.
Depending on where in Australia you are located, you may be familiar with car sharing services such as GoGet and Popcar. These kinds of car sharing services have their own fleet of vehicles that they rent out to drivers who need access to one for a short period of time.
But did you know there are also peer-to-peer car sharing services that facilitate sharing between car owners and other drivers?
Platforms such as Car Next Door, DriveMyCar and Drive mate allow car owners to list their vehicle for rent at times when they have no use for it.
Opting to rent out your car can be a strategic way to help cover the costs of car-related expenses such as registration, insurance and depreciation. But only if it’s the right fit for your personal circumstances.
How do I know if my car is suitable for car sharing?
Whether your car may be suitable for car sharing will depend on a number of factors, including:
- How old your car is – Different sharing platforms will have different requirements, with some accepting cars up to 15 years old and others up to 20. But, generally speaking, the newer your car, the more you may be able to earn from renting it out.
- Where you are located – First, you’ll need to confirm whether there are peer-to-peer car sharing platforms that operate where you live. Then, you’ll need to consider how much demand you could expect in your area. For example, if you live in or close to a city centre, you may find you’re able to rent your car out more regularly than if you live in a suburban or regional location. The reason for this is that plenty of people who live in the city find it impractical or unnecessary to own their own car and instead rely on car sharing when needed.
- When you are able to make it available – If you use your car most weekends and several days during the week, it may not be suitable for car sharing. This is because most of the demand for car rental will likely be on the weekend, or for a week or so at a time. In contrast, if you travel a lot (for work or leisure) and are away for weeks at a time, your car may be the ideal candidate for car sharing, as you can make the most of renting it out instead of leaving it to sit in your driveway or an airport carpark. Where you sit on this spectrum may help you determine whether car sharing will suit your lifestyle.
You’ll also need to provide evidence that your car is registered and is covered with compulsory third party (CTP) car insurance.
How can I sign my car up for car sharing?
Different car share services will likely have slightly varied processes for getting started. Some of the steps you may need to take include:
- Providing details of your car including its make, model and year, as well as photos that show its condition.
- Sharing its availability and specifying how much you are willing to rent it for. Keep in mind, some services will have a set price or maximum price you can charge.
- Managing your bookings and providing access to your vehicle. Depending on the platform you choose to list your car with, you may have the option to either attach a key lockbox to your car or meet the driver at the time of the booking.
How much can I earn from renting out my car?
The amount you may be able to earn from renting out your car will vary depending on a range of factors, including:
- The service you choose to list your car with
- The make, model and age of your car
- Your car’s location
- Your car’s availability
All of these factors will contribute to how much demand you may see from drivers, and ultimately how much you’re able to earn.
Most car sharing services will have a form on their website where you can input your car’s details for an estimate of how much you could earn. Plus, some will guarantee a minimum earning amount if you meet certain criteria.
Disclaimer
This article is over two years old, last updated on July 15, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent car loans articles.
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