Move over Avis! You might have heard about a new trend that has been popping up over the last few years – renting out your personal car for extra cash. We wanted to give you a quick rundown on how it works and what the risks are.
You’ll need to first apply by sharing the make/model of your car, proof of ownership, and a schedule of when you won’t be needing your car. Typically the companies will not allow you to list your car if is in poor condition or older than 10 years old.
Once you are accepted, the rental companies do all the marketing and leg work. Each company is a little different when it comes to exchanging the keys, but some of them even install electronic devices that allow the renter access to your car after they have made payment online and signed a rental agreement.
How Much Can You Make?
Companies like RelayRides estimate that you can earn more than $3,000/year by renting your car out for 10 hours a week. I’m suspicious of the large number, but perhaps if you live in a large city with million of potential renters, that could be a real possibility. However, even if you’re only earning a few hundred bucks, it’s certainly something to think about.
The amount that your car will earn per hour will largely depend on the type of car and its age. For example, on GetAround.com there’s an electric Tesla roadster being advertised for $50/hour, but a more common 2004 Acura is being advertised for only $10/hour.
There’s never any cash exchanged between the renter and the car owner. The companies act like a middle man by collecting the cash and sending you a paycheck.
What About the Risks?
Letting a friend drive your car is enough to make anyone nervous, let alone a complete stranger. Many of the rental companies have seem to take that concern to heart when crafting their rental agreements. To start – renters are required to buy large insurance policies, often in excess of $500,000, before renting your car. If you report that any damage has been done to your car, the renter is charged a deductible and the rental company sees that your car is fixed promptly by their insurance policy.
Renters who smoke in the car or leave it dirty are also charged a fee to have your car cleaned and detailed. In fact, it seems like most of the companies are hypersensitive to protecting the car owners from negative repercussions.
What Else Can You Rent?
Renting out you personal property is a trend we’ve been following all year here at The Penny Hoarder. It seems the poor economy has made this money making trick explode in popularity. If you’re curious about some of the other things you can rent, check out these articles:
Good Luck Penny Hoarders!