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Learn exactly how to rent out your car (Complete guide)

  • August 14 2019
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Learn exactly how to rent out your car (Complete guide)

By Louise Chan
August 14 2019

Owning a car can be costly, whether you buy a brand-new or a used vehicle unit. The initial cost for a brand-new vehicle is already at the minimum of $10,000. Combine that with stamp duty, registration, insurance, as well as petrol and maintenance and repairs cost, and you’re looking at a significant sum of expense. 

Learn exactly how to rent out your car (Complete guide)

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  • August 14 2019
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On top of that, cars are depreciating assets, and you most likely won’t be able to sell it for a profit (unless you’re a flipper). With the rising costs of owning a car, car owners have been offsetting the cost of owning and maintaining their cars by renting it out to other drivers. 

Here’s what you need to know about the peer-to-peer car rental opportunity.

When should you rent out your car?

Ideally, you should rent out your car if you find that it’s sitting in your garage for most of the week. 

For example, if you only use your car during the weekend, you can consider renting it out for the weekdays. Vice versa, if you only use your car for the work commute and not so much during the weekend, you can consider renting your car out for the weekend. You might also want to consider renting your car out long-term if you’re going on a month-long holiday. 

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As long as your availability is consistent, you should be able to rent out your car with ease. 

How does insurance work when you rent out your car?

Car-sharing operators usually provide the following services to give car owners some peace of mind:

  • Comprehensive insurance
  • Roadside assistance
  • Identity and credit checks
  • Servicing and maintenance
  • GPS tracker*

Comprehensive insurance
Popular car-sharing operators usually offer comprehensive insurance to the renters of your car. This means that your car is covered for any accidents or thefts. However, it’s best to ensure that your car is covered by the compulsory third party (CTP) insurance for the rental duration. Having CTP insurance is already compulsory in Australia, so this should not be an issue to most car owners. 

Roadside assistance
24/7 roadside assistance is usually included in the deal for renters in case anything happens while your car is booked. This is great for renters but also works out for your car as it’s also taken care of. 

Identity and credit checks
Operators usually manage bookings through car-sharing platforms wherein registration is required. They’re also responsible for performing identity and credit checks to ensure car renters can be trusted so you know your car is in good hands. Make sure that the operator you’re entrusting your car to will provide the services above. 

Servicing and maintenance
If you’re renting out your car long-term and it is parked in a facility or garage managed by the operator during the time it’s not rented out, the operator will usually take care of the servicing and maintenance for you.

GPS tracker*
Some operators may offer car owners GPS tracker in their car as a way to ease their concerns, especially when it is rented for an extended period.

How can you list your car?

Listing your car with a car-sharing service is simple. All you need to do is find a legitimate and reliable operator in your area.

As the concept of car sharing is relatively new in Australia, there are currently three popular platforms to choose from: Car Next Door, Carhood and DriveMyCar.

Car Next Door
Car Next Door is a free online car-sharing community that allows car owners to rent out their vehicles to registered community members. It currently has active communities in Sydney, Melbourne and Brisbane.

Car Next Door assures that its car owners and renters can be trusted, which is why it also enforces a strict selection process for its members. For instance, having a satisfactory credit history is part of the eligibility criteria, to ensure that owners get paid.

For a vehicle to be eligible, it must satisfy the following requirements:

  • Should be a four-wheeled private passenger vehicle with a maximum seating capacity of 8
  • Mileage should be lower than 300,000 kms
  • Must be well maintained
  • Should be manufactured from 2001 and later
  • Not have been modified
  • Have a less than 200 kilowatts power rating (250 kilowatts for 4WDs)

Community members can simply park on their streets and potential renters will be able to locate the cars they book through the Car Next Door fleet map.

The platform offers the following to its members:

  • Comprehensive insurance
  • 24/7 roadside assistance
  • 24/7 member support

Carhood
Carhood is a peer-to-peer car-sharing service that focuses on renting out cars that are parked in airports. This platform a good option for those who are flying out for work or holidays because they can still earn money from their car instead of simply paying for airport parking fees.

Vehicles may only be up to a maximum of 14 years old and should be registered in Australia and in good working condition. If your car satisfies all three requirements, simply go to Carhood’s website, click share, and provide the requested information.

Carhood offers the following to its members for free:

  • Airport parking and shuttle service
  • Car wash
  • $35 million insurance guarantee for car owners and renters

DriveMyCar
DriveMyCar is the first and largest peer-to-peer car-sharing service in Australia. The online marketplace focuses on connecting private car owners with renters for short-term and long-term car rentals.

Listing your vehicle with DriveMyCar is also easy. Simply go to the DriveMyCar website and click “Join Now” to register as a user. Once registered, log in and go to “My Account”, then click on “Add Car”. Complete the form – including details on when the car is available to book – and upload photos of your car and you’re good to go.

DriveMyCar offers the following to car owners and renters:

  • Rental agreement
  • Insurance cover for accidental damage and theft
  • 24/7 roadside assistance
  • Servicing and registration (for long-term rentals)

The platform may also manage your car rentals for you under the ManageMyCar service if you’ll be away for extended periods or you’re too busy to go through the rental process for each booking.

Check whether your car is eligible by signing up and providing details and pictures of your car. Once your car is approved, you can start accepting bookings for your car.

There are also some new platforms, such as GetAround, but its operations are still limited.

Should you rent out your car?

You may consider renting out your car if you can relate to the reasons why people want to rent out their cars, such as:

  1. You want to help save the environment
    Renting out your car may mean someone else can think twice about buying their own. This means there may be less congestion and pollution on the road because there would be fewer cars on it.

  2. The car is often unused
    Just like any machine, your car can start developing problems or you may fail to detect issues if you don’t use it often. This may lead to expensive repairs on top of the usual maintenance and expenses you shell out for the car.

    Having someone else use your car as you earn from it may serve as motivation to keep it in top shape. Plus, your car won’t just waste away from being unused.

  3. You want additional passive income
    If you want to earn extra income but you already have a full-time employment and a family that keeps you busy, renting out your car may be a viable solution.

    You can just book your car during the times your family typically uses it then rent it out when you’re busy at work or when you reach home. This way, your depreciating asset is working to increase your income even when you don’t actively manage it.

  4. You like helping out the community
    Someone in your community may be in need of transportation but they may be unable to afford commercial car rentals. You, on the other hand, have a car you barely use in the garage.

Renting out your car could help a fellow community member meet their needs while also giving you a fair compensation. Since some platforms value trust within its community, you’ll still be assured that your car will be in good hands.

However, if you’re really uncomfortable with the idea of having someone else drive your car, know that the decision to rent out your motor vehicle is entirely up to you. Renting out your car is simply another income-generating idea you may take advantage of or pass up. 


Explore nestegg for more ideas to earn money.

Learn exactly how to rent out your car (Complete guide)
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About the author

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Louise is a content producer for Momentum Media’s nestegg who likes keeping up-to-date with all the ways people can work towards financial stability in 2019. She also enjoys turning complex information into easy-to-digest, practical tips to help those who want to achieve financial independence.

About the author

Louise is a content producer for Momentum Media’s nestegg who likes keeping up-to-date with all the ways people can work towards financial stability in 2019. She also enjoys turning complex information into easy-to-digest, practical tips to help those who want to achieve financial independence.

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