Can I Rent Out My Car To Make Money?

People can make on average $706 per month renting our their cars according to Turo, the largest peer to peer car-sharing marketplace.

That number certainly caught my eye.

If you are not using your car all the time and you don’t mind renting it out to the public, then car sharing, which is basically like Airbnb for car rentals, may be for you.

There seem to be two major players in this space, Turo and Hyrecar.  We will look at both and compare them, but first an intro to car sharing.

Table of Contents

What is Peer to Peer Car Sharing?

Car sharing is the practice of offering a car for rent to a community of interested borrowers.  Peer to peer car sharing platforms, like Turo and Hyrecar, allow you to rent out your car to a large pool of potential renters through their online platforms.  

Short-term car sharing services, like Zipcar, also fall within the definition of car sharing, but they differ from peer to peer car sharing in that the cars are owned by the company and are usually rented out for very short periods of time (i.e., per hour).

Essentially, you can offer your car for rent through Turo or Hyrecar and if someone browsing through their website sees it and wants to rent it, then you can coordinate with them to seal the deal and you rent it out. 

And when that person returns your car, you rinse and repeat.  You get paid the agreed-upon price each time you do so.

How Does Turo Work?

Turo is the biggest player in the space and they seem to have a pretty streamlined process.  You sign up and then give details about the car you want to rent out. 

Eligibility Requirements

There are some eligibility requirements, including the age of the car (can’t be more than 12 years old), price of the car (can’t be over $150,000), the number of miles on the car (can’t have over 130,000 miles), and clean title (no salvaged, branded, or total loss cars).

Insurance Coverage

You determine the rental rate and choose among the various insurance options offered by Turo.  There are five levels of coverage: 60, 70, 75, 80, 85.  Each of these numbers signifies what percentage of the rental fees you get to keep. 

As you can imagine, the better the protection plan, the less you get to keep of the rental fees.  If you want some specifics about each plan, check out Turo’s summary page on this.

Drop Off and Pick-Up

Logistics play a role here too.  If you live near an airport, you may get a lot of requests from renters who are visiting your city and they may want you to drop off the car at the airport. 

You can select whether you offer drop-off services or whether the renter must come to you (or wherever your car is parked).  Of course, you can charge for delivery and pick-up as well to make up for the hassle and costs associated with this option.

Mileage Limits

You can also set mileage limits.  This is similar to when you lease a car and you have mileage allowances.  If the renter goes above the limit, you can charge them for the overage.

Protecting Your Car

Turo lets you place GPS trackers (tracks location), Telematics (which track driver behavior, like speeding, hard braking, acceleration, etc.), disabling technology like Lojack, Dashboard cameras, and cameras with a view of the exterior. 

Installing some or all of these options may give you more peace of mind when renting your car out.

How Much Can You Charge?

A nice feature of Turo is they have a “Carculator” that gives you a sense of how much you can make with your specific car in your specific area.   Play around with it and see if your car would be a good candidate for rental.

woman holding keys to car

How Does Hyrecar Work?

Hyrecar has a similar registration process.  You create an owner account and follow the steps.  They include providing the car’s make, model, year, and mileage. 

Eligibility Requirements

The vehicle must qualify as a rideshare vehicle in your area (which usually means it has to have at least 4 doors, can’t be more than 10 years old, and needs 5 seatbelts). 

I get into why Hyrecar requires this a bit later, but it relates to a very important distinction between Turo and Hyrecar.

You get to set the rate and you can offer long-term rental discounts to prospective renters.  

Mileage

Mileage limits are also available, although you tend to see much higher limits on this platform because of the driver demographic.

Insurance

Their insurance options differ from Turo’s – they offer three tiers of coverage: Basic, Standard, and Premium.  They permit owners to keep 85%, 80%, and 75% of the rental fees respectively.  

As with Turo, the coverage improves the more you pay.  For more details about what is covered, check out Hyrecar’s summary page on insurance coverage.

Protecting Your Car

Hyrecar’s Terms and Conditions also seem to require that all vehicles be equipped with a GPS tracker.  This is probably a good idea whether you list your car through Turo or Hyrecar.

Your car is a valuable asset and you should know where you can retrieve it at all times.

Demographic Differences Between Turo and Hyrecar

Turo seems to target users who want an alternative to the standard rental car companies. They offer a broad range of vehicles, including high-end cars (I have seen some pretty expensive sports cars and SUVs on their platform). 

This is likely to attract renters who need a car when they go on vacation, go on a road trip, or even want to test drive a fancy car for a few days.

Hyrecar is a platform designed for drivers who want to rent cars longer-term because they want to use it for a side gig that requires one (think Uber or Lyft drivers or other delivery gigs, like Postmates, DoorDash, Instacart, etc.).  It’s a very different demographic. 

This will likely result in your rental arrangements lasting much longer.  I have heard tales of people renting through Hyrecar for months at a time.

This difference may play a role in deciding which platform is better for your car.  For example, a reliable, low cost, and fuel-efficient vehicle (think a used Toyota Prius) may be a natural fit for Hyrecar, whereas a high-end convertible sports car may make sense to list on Turo if you live in a sunny tourist area.

For me, this difference between the two platforms seems to be a key factor in determining which one to use.  It directly plays into which type of car you are going to list, what type of insurance plan makes sense, and which type of renter you feel comfortable with.

Conclusion

Making side income through car-sharing is an intriguing concept.  Just by checking out the available cars on these platforms in my local area, I have noticed that there are people who own fleets of cars and seem to run this as a real business. 

But it can start with something as simple as renting out your car on the weekends to tourists.  Whether you are looking to create a massive car-sharing empire or just want a few hundred extra bucks to spend each month, car-sharing seems like something worth investigating.

Young M.

Young M.

Young is a lawyer working in the financial services industry and writes about real estate investing, personal finance, passive income, and starting businesses. He owns and manages 9 rental properties, has started several businesses, and enjoys learning about financial matters, especially anything off the beaten path.

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