How To Turn Renting Out Your Car Into A Side Hustle
Wouldn't it be great if you could make extra cash renting out your car? Here, we'll be discussing the ins and outs of using this as a side hustle.
- Renting out your car is a lucrative side hustle opportunity.
- Platforms like Turo and Getaround make car rental easy and accessible.
- You can earn extra income without much effort or time commitment.
- Understand the risks and insurance coverage before starting.
Brett Helling is a gig economy expert who has been running his own small business for over 10 years.
Are you worried that your car might stop working properly because you haven't driven it in weeks?
You'll be relieved to know that there's a straightforward solution to your problem, and that is to rent out your personal car.
By letting other drivers borrow your vehicle for a set period, you can earn some extra cash, and be assured that your vehicle is active.
Let’s take a look at all you need to know about renting out your car to earn extra cash.
An Overview of Renting Out Your Car: A Primer
Back in the day, you could rent out your car to a friend or a neighbor for a fixed rate.
The problem is that it was much more difficult to find people actually looking to borrow a car in your close circles.
Now, you can take advantage of online platforms that allow you to showcase your vehicle to a lot of people at once.
From there, interested people can contact you and negotiate the details.
This is similar to Airbnb, which has adopted the rental arbitrage business model over the years.
You can do the same with car rentals, but it is a more advanced way of earning money and requires much more effort to get right.
On the other hand, car owners rent their vehicles out on free days so that the car is active and doesn't just gather dust in the garage.
How Much Can Renting Out Your Car Earn You?
The amount that you can make by renting out your vehicle varies drastically based on the car’s condition, its value, and the outstanding loan amount.
The overall amount will not be enough to replace your primary salary.
But, it can be a great side hustle as a means of secondary income.
According to Turo, one vehicle could generate upwards of $10,000 per year based on its value.
https://www.youtube.com/watch?v=A6g8PrHgLzg
How Much Does it Cost to Start a Side Hustle Renting Out Your Car?
Few car sharing companies actually charge you upfront when you rent out your vehicle.
Most companies charge a commission on the amount you receive.
Companies may charge anywhere between 15-40% as a cost of making money renting out your car.
Keep in mind that preparation for renting your vehicle may involve maintenance work, which may be a significant amount if the rental car isn't in proper condition.
Where Can You Find Gigs Renting Out Your Car?
There are various online car sharing services that connect you to potential customers who could rent your car.
One of the drawbacks of using a car sharing service is the commission they levy alongside their payout procedure.
You might be missing out on more money that you could have earned otherwise through traditional car rental methods.
To avoid this, you can try posting on Facebook groups, forums, and local communities which don't require you to sacrifice a portion of your earnings.
Here are some of the most popular peer to peer car sharing companies on the market:
- Turo
- Avail
- Hyrecar
- Getaround
- Carshare
- Zipcar
Why You Should Consider Renting Out Your Car As a Side Hustle
Having a car rental side hustle can be very beneficial in a number of ways.
Here are some of the most important reasons to consider starting a rental service:
- Passive Income: Since you just have to rent out your car to earn money, you save time and energy which you can devote to other areas of life, and the extra cash can go toward car payments or other expenses you have.
- Car insurance company problems: Most rental companies provide an insurance policy that covers any damage your car sustains when it is rented. Remember look at the protection plans before you choose a rental company.
- Renters are screened: Most major car rental apps pre-screen renters and also allow you to make your own examination (possibly at a parking lot) before the key handoff.
Problems With Renting Out Your Car
Like with any side hustle, there are drawbacks that you need to take into account.
Here are some of the major problems with putting up your car for rent:
- Problems with insurance: Some auto insurance coverage may be declared null and void if providers learn you're partaking in car sharing.
- Maintenance costs: The total cost of renting out your car may be spiked by maintenance expenses since it is the owner's responsibility.
- Accidents revoke access: If your car gets totaled, or sustains any form of damage, you may lose access to the car rental app for a prolonged period.
Although not a clear drawback, the amount you can earn by renting your car can reduce as time goes on, which is why calculating depreciation is important to know where you stand.
Frequently Asked Questions
What is the Most Popular Peer-to-Peer Car Rental Company?
Peer-to-peer carsharing companies connect car owners and renters through an online medium. Turo, Maven, and Getaround are some of the best peer to peer car sharing company options out there.
Why is Renting a Car From a Person Instead of a Company Cheaper?
Renting a car from a person is cheaper than from a company because there's no middleman involved. This means the owner gets the full rent with no hidden fees that hike up the costs.