What You Need To Know Before Renting Your Car Out

Renting your car out can be a great way to make some extra income if you can limit the risks attached to it. Just remember – you’re operating a business and should always do your due diligence beforehand.

Choosing A Carshare Platform

Hosting your car on a carsharing platform is a partnership between you and that company, and you’ll want to make sure you’re partnering with the right one.

Here’s a list of the top 4 current US car-share companies:

1. Turo
2. Avail
3. Getaround
4. HyreCar

What Are The Risks?

It seems easy enough that you can just rent your personal car out and make some fast money, right? Well – anything that shiny may be worth taking a look at under the hood first. The risks range from “expected” to “worst-case scenario”:

Expected:

• Lots of milage on your car depending how often you rent it out and what you set the allowed milage limit to.
• Wear and tear on the interior and exterior.
• Scratches/blemishes that occur with increased highway and city driving.
• Accelerated depreciation from all of the extra miles and wear and tear typically seen on a rental vehicle.

Worst-case scenario:

• Your car gets totaled if an accident occurs and the damages are estimated to cost more than it’s current value.

• Damage that is not reimbursed/covered can happen if you cannot prove the damage was there before the renter took it or depending on your protection plan through the carshare service.

How Much Can You Make?

You can make up to $1,500+ a month per vehicle you rent out. But, that’s majority influenced by these 6 factors:

1. Which platform you’re hosting on
2. What city you’re renting in
3. The protection plan you choose
4. Car availability
5. The year, make and model of your car
6. What will you set the daily price at

Questions To Ask The Carshare Company

Here’s a list of some important questions you should consider researching about carshare platform’s before hosting your car on them.

• What protection plans do they offer? You’ll want to make sure they have multiple protection plan options to choose from. Especially a plan that offers a $0 out-of-pocket cost for covered damage to your car.
• Can you opt-out from young renters (18-25 years old) from booking your car? If you feel uncomfortable renting your car out to younger drivers due to a possible increased chance of a car accident or handling of your vehicle, this is one you’ll want to make note of.
• What is there ‘total loss’ policy? In the event your vehicle deemed a total loss, you’ll want to make sure they will cover up to the actual cash value (ACV) of the vehicle.
• Do they have 24/7 phone support? Having excellent customer service and phone support is critical when renting your vehicle out to others – especially when renters are running late, leave your car a mess, or put a few scratches on it. You don’t want to be forced to email support to receive a response in 3 business days if someone just damaged your car.
• What is the screening process for potential renters? How thorough are their background checks and what’s their driver acceptance criteria? You should want to know the approval process for all drivers that’ll be renting out your car. Because the last thing you want is renting your car out to someone you wouldn’t rent it to personally if you were doing the background check.
• Do they have a ‘car exclusivity’ policy? Some car sharing platforms have a policy that you must agree to host your vehicle only on there platform and may not list it on any other car sharing platform.

Questions To Ask Your Insurance Company

Don’t fly blind into assuming you’re covered in a “worst-case scenario” situation and make sure you’re protected through your personal insurance as well.

• Does your car have gap insurance? Because in the unfortunate event the renter totals your car – you may still be held accountable to pay off the auto loan on that vehicle if there was one.
• Is your gap insurance still valid if you’re renting it out commercially? Even if you have gap insurance, you’ll want to make sure that it’s valid because you weren’t the one driving the vehicle at the time of the total.

Make Sure Your Car Is Safe To Rent Out

On the flip side, you should want to assure all of your renters are safe driving your car.

Get a diagnostics test done to make sure everything is up to code and running smoothly before your rental goes out on the road – they are quick and fairly cheap to get done.

Other Things You May Want To Consider

• Switching from personal to commercial insurance
• Putting a GPS tracker on your car
• Set a max milage limit on your car listing
• Installing a car key lockbox