How to Make Money with Renting Out Your Car

In this article we will examine all the pros and cons of renting out your own car, discuss rental agreements, as well as the practice of car rental and how to make money with your car and whether it's worth doing at all.

Does it make sense to rent out your car?

This question, like any other, has two sides, so as many people as there are opinions about it. We'll say that if your goal is to earn income from renting - you should definitely rent out my car.

Models for renting out your car

All models of car rental, in general, can be classified according to the rental term:

• per-minute or hourly - for several hours or minutes. Mainly characteristic of free-floating or station-based carsharing services, less common in peer to peer car rental and practically never in car rentals;
• short-term rental - from 1 day;
• long-term rental - from 1 month;
• operational leasing - from 1 year.

Separately, car rental is classified by the nature of vehicle use by the consumer:

• car rental for commercial needs - cargo transportation, people;
• car rental for taxi;
• car rental for private purposes.

Sometimes rental is distinguished depending on how the car is obtained:

• without driver - i.e., regular car rental;
• with driver - this is actual passenger transportation at a fixed price, but often this transportation is defined as car rental with driver, vehicle rental with crew, transfer, etc. Definitions depend on legislation and licensing conditions.

Depending on the nature of placement, offering the car, rental can be divided into:

• rental through platforms for private rental (peer to peer car rental, etc.);
• car rental through classified ads boards;
• car rental through car rental companies;
• car rental through carsharing companies;
• car rental through personal contact, advertising, creating a car rental company.

Renting Cars Through Private Rental Platforms

 We would include separate websites that offer to place your car for subsequent rental among such platforms. A striking example of such a model is peer to peer car rental. When the owner places their car or cars, receives an order through the platform, and then meets with the client and rents the car. The platform receives its percentage for the client, provides certain security and insurance guarantees to the car owner.

Striking examples of peer to peer car rental platforms can be: American service TURO and European service (formerly French) Getaround.

This model has its positive and negative characteristics.

*It's futile to think you can lure clients through these services, as soon as you violate anything, you'll be blocked forever without any explanations.

Renting Cars Through Classified Ads

Classified ads are internet sites that specialize in automotive topics or generally offer a wide range of advertisements. For example, in Ukraine a quite popular resource is OLX, in Georgia - myauto.ge, and in Germany - kleinanzeigen.

Renting Car Through Car Rental Services

Some car rental companies accept cars for rental with management and subsequent transfer of cars for rental. Such companies, as a rule, provide full vehicle service and unlike private rental platforms or classified boards, the vehicle owner has more advantages.

Renting Your Own Car for Taxi

Want to rent out my car for a taxi? This has both advantages and disadvantages, due to which some people don't want to rent their car for a taxi. Let's consider all pros and cons of this method of renting your own car.

Conditions of cons and pros may differ if you rent a car for a taxi through a company that manages a fleet for taxi car rental.

Renting Your Own Car Through Getmancar Carsharing Service

One possibility is renting your own car through Getmancar carsharing service. This method may be similar to some other types of rental but has hybrid conditions.

Opening Your Own Car Rental Company

Opening your own company is one of the alternatives. If you dream or consider this business, then perhaps you should immediately open your own car rental.

Pros of launching your own car rental company:

• independence
• full-fledged business
• prospect of own independence

Cons of car rental business:

• full involvement in processes
• significant capital investment - shouldn't start a company with one car
• onboarding, maintenance, insurance and everything else

Comparison Table of Best Car Rental Methods

For your convenience, we created a summary comparison table about all types of car rental from people and how involved you are in processes 👇

Main Advantages and Risks of Car Rental

Regardless of all circumstances, renting your own car is always risky, like any business, but of course it can be something riskier than other types of capital investments.

What Risks Can You Get Renting Cars?

1. car destruction - when a car gets into an accident so it's impossible to restore. Opposite to this statement, you can say insurance will pay for it if you insured the car.
2. technical car breakdown - really possible, that's why you should choose a car for rental by principle "the newer, the better" and always should timely maintain the car or entrust it to professional service.
3. car theft - such risk really exists, so you should immediately agree with service through which you rent a car about risks.
4. lack of demand - this happens in different territories, so have several options for reinsurance.
5. car is not real estate, so can be easily damaged and has greater depreciation.

Advantages of Car Rental as Thing Thanks to Which You Get Income:

1. this is additional or main income of your family
2. A car is a movable thing, so this income source can be moved to any point. Unlike real estate, you're a little tied to a specific region.
3. A car has higher profitability than many other investment sources. For example, it's more than real estate, than deposit, etc.
4. here income is lower than speculative, for example when you invested in altcoin and it grew, but definitely fewer risks, car remains today and tomorrow with +/- understandable cost
5. A car always has value, even in a completely crashed state it's sold for parts, as documents, etc.
6. asset sale speed is quite high, you'll sell cars much faster than apartment or office space.

How Much You Can Earn: Realistic Income Calculation

This is an interesting question, but it depends on many factors, such as:

• how we rent for taxi, rental, ourselves...
• rental/rental period
• degree of car wear
• car model and brand
• where we rent (in which city, country)

Income of course depends on whether you make money with your car - VW Passat or Chevrolet Spark, Mercedes-Benz S class or Mustang, what year your car is, whether it's 17 years old or less than 1 year.

For your understanding, we'll take a simple car example, it will be a used car worth about 13,500 euros. So, how much would we earn on average per year how to rent out my car.

Average monthly income and mileage of car worth 13,500 euros, when rented to different services.

Average monthly income is net income before tax payment, calculated for established company and service, income may be lower, for example, if you just started a company. Also income may be higher in seasonal months and lower in off-season.

💰 When you'll recoup your money: with average income of 450-500 euros per month from car worth 13,500 euros, full payback comes in 27-30 months. But this is without considering depreciation, repairs and insurance cases. Real payback period is 3-4 years with active use. Therefore, consider this as long-term investment, not quick earnings.

Requirements and Car Preparation for Car Rental

Depending on how and to whom you rent the car, there are different car requirements. We recommend familiarizing yourself with them to prepare your car.

Car Odometer Condition/Car Mileage

Don't abuse and don't try to deceive your clients by "rolling back" car odometer readings. A technically bad car will show itself. At Getmancar we always see this, because equipment connected to cars for carsharing service work immediately determines real car mileage.

General Technical Requirements

Car must have acceptable requirements to be transferred for rental. If you think you can i rent my car out - old, slightly broken car, you're greatly mistaken, because:

1. nobody will rent such car
2. if you manage to rent car, its breakdown risk is very high
3. car will break somewhere quickly and you'll be forced to take car on tow truck and bear additional time and money costs.

Car Maintenance

1. change engine oil, and if mileage has come, then in gearbox too,
2. check brake pad condition and brake system serviceability
3. check your tires, whether signal indicator has worked there, should replace tires so it's safe for renter to use car
4. should replace or check battery and alternator load so they don't fail during rental

Always remember that you bear responsibility for car condition as owner, so in case of incident where bodily injuries are caused, car will always undergo examination and if some unit malfunction is proven, owner may bear criminal responsibility. That's why keep car you rent in proper condition.

🛑 Signals to stop rental: If your car started breaking more often than once a month, or repair costs exceeded 30% of monthly income - time to stop. Also worth stopping if car stands idle more than 50% of time without orders for 2-3 months in a row. This means the market is saturated or your model has lost relevance.

Additional Technical Requirements

Some countries may impose additional requirements on cars rented for taxi, namely:

1. special registration - license plates
2. additional insurance
3. technical inspection
4. car color
5. car age
6. additional equipment like taximeters or other.

Always check local legislation for additional taxi car requirements.

Also additional requirements apply to cars transferred for rental through car rental companies. Usually these are:

1. age - no older than 5 years
2. mileage - no more than 100 thousand km.
3. specific car model or brand
4. availability of seasonal tires

Step-by-Step Car Preparation Checklist for Rental

For your convenience - step-by-step checklist how to make money with your car:

agree with service where you'll give car, clarify all questions

prepare car technically - do maintenance

replace car tires

paint or polish car if you're going to hire out your own car used and it has paint defects

buy third party insurance

think or buy CASCO insurance for car rental

prepare details and conclude contract if renting to service or prepare own contracts if you'll rent car independently

transfer car

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Read in our next article about what Personal Rental Cars Agreements exist and their templates.