If you have a car that spends most of its time in the driveway, then you could be cheating yourself out of a whole new income stream.
Cameron Gowing says he’s started earning $15,000 a month from renting out private vehicles after starting , with a 2014 BMW X5 that he thought was spending just a bit too much in the garage.
Last July he decided to begin renting out his BMW with hopes of earning himself an extra $10,000 a year. However, he was surprised to find that it booked up almost immediately. It didn’t seem to mater what the price was, some of his renters took the car for days.
“It left me a bit short actually,” he told the Financial Review. “I had to ride my bicycle everywhere because I had no way of getting around.”
Almost a year after initially renting out his BMW, Mr Gowing has been busy buying a used car off Facebook marketplace about every one-and-a-half weeks, continually expanding his car rental business.
He now has 40 cars in rotation, earning him a cool $15,000 a month, at an average of about $1500 a car.
“I keep an eye on what the car rental companies are charging, and I adjust my prices in real time.”
“It takes about four to five months to recover the purchase price for each car, and because it’s all on the web, I rarely interact with customers themselves, only when they need something specific.”
Steve Connolly also shared a similar story with the Australian Financial Review.
Mr Connolly owns an Audi A3 that was gathering a little too much dust. After renting it out, it earned him $13,000 in a year. He then purchased five more cars and is now raking in more than $80,000 annually.
These peer-to-peer car sharing companies are filling a timely gap in the market.
After the pandemic hit, many of the big players in the hire car market hit the panic button and started shedding their fleets. For example, Thrifty sold 40% of its cars after the pandemic hit.
However, domestic tourism and regional travel came back sooner than most anticipated and car rental companies were unable to meet demand, meaning low availability and higher prices.
This means it’s a great time to get into car sharing and once international travel is allowed again, that will spell a whole new market of potential renters, with the car sharing model allowing people to undercut the prices of the big companies.
Whether you see yourself building a car sharing empire or simply want a few extra dollars on the side, here are a few tips to get started in the game.
Tips for renting out your car
You’ll need to make sure your car is safe and comfortable to drive, has appropriate CTP insurance, that its specifications are in line with your chosen car sharing platform and be willing to do a bit of housekeeping to get your car ready to go. For Car Next Door your car cannot be older than a 2001 model.\
Pick a platform
The major car sharing platforms in Australia are Car Next Door, Drive My Car and Carhood. Drive My Car operates throughout all of Australia, Carhood is only out of Sydney, Melbourne and Brisbane airports and Car Next Door operates all through New South Wales and Victoria, as well as Brisbane, Gold Coast and Canberra.
A service such as Car Next Door will install your car with a GPS, key lockbox and calendar system, so you don’t need to meet each borrower and do a handover. However, each service has its advantages and disadvantages so you should read up on their policies and make a decision.
You can also try and do it yourself through self-marketing or a platform such as Facebook marketplace, but this will make issues like insurance and credit checks a lot more difficult to deal with.
How much will you earn?
The average car on Car Next Door earns $3500 a year, which rises to $5,089 in Sydney. Smaller cars earn less, around $250-350 a month and utes and vans can often up to $750 a month. It will obviously depend on how often you can make your car available, what type of car you have and what demand there is in your area, but $3500 is a rough starting point.
Drive My Car guarantees $2500 in the first 12 months if you can meet their basic criteria for rental. They have a calculator here where you can estimate what you’ll make.
Maximising your income
First make sure to take really great photos of your car, dress it up nicely and scrub it clean, make sure you highlight its best features. Write an eye-catching description, getting into what makes the car particularly useful or special, whether that be boot space, fuel efficiency, safety features or anything else.
Try to make your car available when people will need it most, meaning weekends, particularly long weekends and school holidays. Ensure it’s listed for booking anytime you’re not using it to take advantage of last minute bookings.
If you equip the car with nice smelling air fresheners, charging ports or any other personal touches, you’re more likely to earn yourself repeat business and maximise income.