Car owners could earn money by renting out their vehicles, with several apps offering to help match them with nearby drivers.
Apps such as Turo, Hiyacar, Karshare and Getaround are making it easier to hire out your car for a fee. Some owners we spoke to said they earn an extra £400 a month.
Here, Which? explains how you can rent out your vehicle and what you need to consider before signing up - including how this move could impact your insurance.
How do car rental apps work?
Once you’ve chosen the car rental app you want to use, you'll be able to list your vehicle - its make and model, location and pictures.
You'll also need to indicate the dates your car is available. You can usually set your own rental prices, and any rules in addition to the standard ones outlined by the app.
When a guest books your car, you’ll usually have to organise handing the keys over to them. Some apps are able to set up keyless entry, which means you won’t have to be around whenever a driver wants to rent it.
After the trip, you’ll get paid the rental fee (after the app's commission rate has been taken), and reimbursed for any fuel and mileage beyond your limit.
- Find out more: 47 ways to make money
'I earn £400 a month'
John Peate, 68, is semi-retired and spends long stints away from home visiting his grown-up children, who both live abroad.
This means his Range Rover Evoque, which he owns outright, is often not being used. While he's away, John uses the platform Karshare to rent it out.
‘I have regular bookings where people from the local area hire my car, and it brings in a steady monthly income for me.
'It means the £400 per month can be for me and my wife to enjoy. We still both work part-time, and I receive a pension. The extra money is supplementing our retirement income, and allows us to live a bit more comfortably.’
John told us he would recommend renting out your car if you’re retired and don’t need your car everyday.
'I've made car rentals a full-time business'
Leah Alli rents out several cars using renting app Turo.
‘I was a stay-at-home mum and wanted my own money so I could treat myself,' she says. 'My car was sitting on the drive not being used very much, so I Googled "renting out a car".’
Leah initially rented out her custom-made Land Rover Discovery Sport. As the car was on finance, she had to check whether she had permission to do so first. In her best month in 2020, she made £1,200.
Since then, Leah has gradually added more cars to her fleet, and even though she successfully rents them out as a full-time business, she has warned others to do their research before jumping in.
‘It’s rewarding - I’ve become a stay-at-home boss. I'm self-employed and I can spend the profits’, she says. 'But this is not for everyone - and a lot of people may learn that the hard way.
‘With every car you feel that nervousness for the first few trips, but most of the time it comes back in great condition. The more experience you have dealing with damage and any issues that arise, the more confident you'll feel going forward.’
Car rental companies compared
In the table below, we compare some of the most popular car sharing rental firms, including the fees they charge, as well as the level of car insurance and breakdown cover they offer. They are listed alphabetically.
| Car rental company | Commission rates | Insurance cover | Breakdown cover |
|---|---|---|---|
| Getaround | Charges a 40% commission on all trips booked. | Trips are covered by Allianz, which provides coverage against third-party liability, damage to the vehicle, fire and theft. In the event of an accident during the trip, the driver pays the repair costs within the limits of the excess. The insurance pays the rest. | 24/7 roadside assistance with the AA in case your vehicle breaks down and needs to be towed while being rented. |
| Hiyacar | Charges 30% of the rental fee you set. | Insurance covers your vehicle for up to £40,000, and if there is third-party property damage it's covered up to £20m. It also covers accidents and theft. | Owners can buy a discounted policy from the AA through Hiyacar to cover their car on and off-hire. Renters can ring Hiyacar to be put through to AA assistance if the car breaks down while they are renting. |
| Karshare | Karshare charges a service and insurance fee of 30%. The renter is charged for fuel they've used if they haven't topped it up. | Fully insured by QBE. Karshare says your own car insurance will not be affected by choosing to rent. If your vehicle gets damaged while rented out, Karshare will carry out an investigation and take care of repair work, with replacement value up to £50,000. | Karshare's RAC membership will cover renters while they are driving your vehicle, but this is not applicable to owners. |
| Turo | Charges 10-40% of the trip price. You will be reimbursed for fuel if the borrower hasn't topped it up, tickets and toll costs. | Two plans offered by Aioi Nissay Dowa (65 plan or 75 plan) - both cover your vehicle up to £20m for third-party liability insurance. You're also covered for damage to your car, although on the cheaper plan, you (the host), would be billed a £250 excess. | Available 24/7 for accidents, breakdowns, and other issues if you’ve bought a 75 or 65 plan. |
Correct as of 11 November 2022
6 things to consider before renting out your car
Earning money from your car could be an easy way to make some cash, but it won't suit everyone - so make sure you've considered the following before handing over your keys:
1. Find the right provider to suit you
Before deciding which rental app to use, it’s best to check which are available in your area as some currently only cover larger cities.
You should also read the apps' reviews and compare the prices, as some charge extra for keyless technology if you don’t want to do manual handovers.
2. Will your insurance be affected?
Although all the car rental platforms provide insurance to cover your vehicle while it's being rented, you should also check with your own insurer in case renting out your vehicle invalidates your own cover.
For example, your policy could be compromised if your vehicle ends up covering more miles than it’s insured for.
A spokesman for The Association of British Insurers told Which?: ‘If you are considering listing your car on a car sharing platform, we would recommend that you check your policy details carefully, as this type of cover may be excluded in some policies.
‘You should let your insurer know if you do decide to use these platforms, and be sure you have the right level of cover.’
Likewise, if your car is on a finance agreement, you should also check with your leasing company if they're happy for you to list it on a car rental platform.
- Find out more: best and worst car insurance
3. Will wear and tear eat into your profits?
If your car is being used more regularly, the vehicle will experience more wear and tear damage, and could leave you with higher garage bills as a result. These kinds of repairs often won't be covered under insurance policies, so you may want to put some money aside from what you earn for vehicle maintenance.
Leah estimates her cars will do around 20,000 miles a year, which means you could end up shelling out for additional tyres, window wipers and brake maintenance. You may also may have to spend money cleaning the car if it’s returned looking dirty.
- Find out more: how to find cheap car insurance
4. Will you need your car at short notice?
You may be charged a fee if you cancel a rental booking, so make sure you only make your car available to rent when you know you won’t need it.
If your car is only available for a few hours a day, it may be less appealing for renters and you might not earn very much. Have a think about whether you'll be able to rent it out often enough to make the process worth it.
5. Read the terms and conditions
Make sure you check the rental app's terms and conditions carefully before signing up, so you know what to do if something goes wrong.
For example, many platforms will reimburse you for speeding tickets and congestion charges picked up by someone while renting your car, but you’ll need to send a picture of any bills or charges to the company straight away.
Make sure you also understand the claims process if you notice your vehicle has been damaged.
- Find out more: car premiums rise - how to get the best deal when renewing
6. Will your income affect your tax bill?
You can make up to £1,000 tax-free as part of the 'trading allowance' but if you earn any more than this, you'll have to declare the income to HMRC via a self-assessment tax return, and - depending on your other sources of income - you may need to pay tax on what you've earned.
- Find out more: tax-free income and allowances
source https://www.which.co.uk/news/article/rental-apps-like-turo-hiyacar-and-karshare-could-help-you-earn-extra-cash-from-your-car-should-you-rent-it-out-a9cgz8j6RPuB