If you’re not using your car very often or if you have an extra car, you might be tempted to rent it out. Some apps like the car sharing company Turo and Getaround will connect you with people who need to rent a car. But is renting out your car worth it?
Car sharing is an alternative to traditional rental companies. It allows you to rent your own car to people.
Car owners list their vehicles on a car-sharing app like Turo. Your car must meet specific qualifications to be accepted to be listed.
Car sharing can be beneficial for the owner. Owners can make a lot of money. Many report they make up to $1,000 monthly with just one car.
It's also beneficial for the renter, who can often rent a car share vehicle cheaper than through a traditional rental company.
Car sharing has become very popular in the global market and is worth $2.9 million in value. It is expected to grow 20 percent by 2032.
Turo has exploded since the COVID-19 pandemic. That’s because, during the pandemic, rental car prices were at their highest. Traditional car rentals were often more expensive and less flexible compared to peer-to-peer services like Turo. Although prices are lower now, they have increased by 34.8 percent since 2019.
Car sharing is often necessary for people who live in more urban areas. They usually rely on public transportation and don’t own a car. The result is that they need to rent a car when they want to take a trip. Car sharing is less expensive than traditional rentals.
Remote workers found themselves with unused cars sitting in their driveways. They saw they could make money by renting out their vehicles. This made apps like Turo popular.
Turo is a car sharing service that allows private car owners to rent out their own cars to travelers and locals alike. This platform provides an alternative to traditional car rental companies by connecting car owners with people who need a vehicle for a short period. Operating in several countries, including the United States, Canada, and the United Kingdom, Turo offers a wide range of vehicles, from economy cars to luxury and vintage cars.
To use Turo, car owners create a listing for their vehicle, including details such as the make and model, year, and rental price. Potential renters can then browse the listings and book a car that suits their needs. Turo handles the booking and payment process, providing a range of tools and services to help car owners manage their rentals efficiently.
When renting out your car on Turo, it’s important to understand the fee structure and insurance options. Turo charges a rental fee to car owners, which varies depending on the type of vehicle and the rental period. This fee typically ranges from 10% to 40% of the rental income and is deducted from the owner’s earnings.
In addition to the rental fee, Turo offers a range of insurance options to car owners, providing protection against damage or loss. Car owners can choose from three different insurance plans, each with varying levels of coverage and deductibles. These plans are designed to offer flexibility and peace of mind, helping to mitigate the risks associated with renting out a vehicle.
Listing your car for rent on Turo is a straightforward process that can be completed in a few simple steps. Here’s a step-by-step guide to get you started:
By following these steps, you can create an attractive listing that will appeal to potential renters.
Renting your personal car out may sound like an easy decision to make. But there are pros and cons to doing it. It’s wise to look at all the facts and make a sound analysis.
Renting out a car is an excellent form of passive income. Once you hand the keys over to the renter, you don’t have to do anything. You can go about your everyday life.
Car-share apps vet renters so you will be assured of having safe drivers behind the wheel.
The best part is that with many car-sharing platforms, as a Turo host, you set your rates and schedule. Rent when you don’t need the car. And many owners have reported making up to $1,000 on one car.
Your car will have more miles on it, which means extra wear and tear. You’ll need to pay for additional maintenance.
And although most of the time it’s passive income, you’ll still have to manage the process. For example, you’ll need to set the schedule and meet drivers to exchange keys. The alternative is to have a lockbox with a code.
Insurance may also be a problem. Many apps offer collision and comprehensive insurance while the renter is using the car. This may come at an additional cost. Insurance plans vary with different apps, so compare them before signing up for one.
Your regular insurance may frown on this activity and cancel your coverage. Specifically, your personal auto insurance policy may not cover rentals through platforms like Turo, leading to potential gaps in coverage and additional costs. So, check your policy to ensure renting your car won’t result in cancellation.
Plus, if your car is damaged and repairs have to be made, you will miss out on renting or using it for personal use.
Although the app is supposed to pre-screen the renters, including DMV and background checks, some owners have reported that criminals or poor drivers have been renters.
Once you know all the benefits and risks, you’ll need to run the numbers to see if it’s worth it.
Turo offers several advantages over traditional car rental companies, making it an appealing option for both car owners and renters. Here are some key benefits:
However, Turo also has some limitations compared to traditional car rental companies:
Check your contract if you are leasing or still paying off your car. There may be restrictions on renting your car out to people.
There are rules with the apps. For example, Turo wants exclusivity on your car. This means you are married to them while you’re renting.
Take photos of your car before renting it out. That way, you’ll see immediately if there’s any damage when it’s returned.
Ensure you set parameters with your entries. These could include:
Review your insurance coverage. Ensure there aren’t restrictions to car sharing. It’s wise to discuss this with your insurance agent.
And finally, determine how you’ll be handing off keys. Are you giving them in person or through a lockbox?
Turo has significantly impacted the car rental industry, introducing a new and innovative way for car owners to earn extra income. Here are some of the key effects:
However, Turo has also raised some concerns among car owners and rental car companies:
Overall, Turo has disrupted the car rental industry, providing a new way for car owners to earn extra income while also raising important questions about liability, regulation, and the impact on traditional car rental companies.
There are many pros and cons to renting your car out to strangers. Run the numbers and risks. If you’re comfortable with the risks and you feel the money is worth it, then it may be the right decision for you.
