Do you have a spare vehicle sitting around collecting dust? Try renting it out.
Kiplinger magazine reports there are several websites that can help you get started as a 1-personal rental agency, with the possibility of generating several hundred dollars in extra income each month.
The reality is most of the time our cars sit idle. This is especially true in the case of frequent travelers and even daily commuters who leave their cars sitting unloved during the business day.
RelayRides.com, JustShareIt.com and Getaround.com are among several startups in different cities around the country that let you monetize that down time.
I also read about another one called Car2Go.com, which is active in Austin, Denver, Miami, Portland, Seattle, San Diego, and Washington, D.C. With this particular service, you can rent in one part of town and drop off in another different part of town. So you don’t have to make that roundtrip back.
The way all these sites typically work is you pay a nominal membership fee and then you can rent by the mile, the minute, or the hour.
As a renter, these sites could give you an unusual opportunity to rent older cars really cheap because it’s the antithesis of going to Hertz and getting a fancy 2 month old car! Be prepared for these peer-to-peer (P2P) rental agencies to screen you as a potential renter by pulling your driving record from the DMV database.
As an owner of a car for rent, you typically get to keep 2/3 of the money that the renter pays. The rest is kept by the P2P that also supposedly provides insurance that will protect your if that individual wrecks your car.
But what do insurers think?
The question of insurance has been a real stickler for a lot of people. The liability issue can be a fuzzy one because we’re still in early innings of this business model. I’ve read previously in The Los Angeles Times that RelayRides has supplemental insurance of $1 million that is supposed to provide an umbrella on top of your own coverage.
The New York Times reports that so far only two states have laws specifically that allow you to rent car and not be liable for what the renter does. They are Oregon and California. Everywhere else, who knows? We’re in the Wild West time with this idea.
The car-sharing services provide liability insurance, but most auto insurers are opposed to you making your car available for this, according to a separate article in The New York Times. Progressive is the only insurer who has at this time agreed to let its customers put their cars up for rent on these services. Of course, that could change at any time.
There’s definite risk if you have a lot of assets like a home and money in the bank. On the other hand, if you are somebody who rents a home and you have few assets, this might be a way for you to generate extra cash.
The benefits for renters and owners who rent their cars
As for how you get a renter physically in your automobile, well, it’s very high tech. “When [a] reservation [is made,] RelayRides uses global positioning technology to transmit the exact location to the client,” The Los Angeles Times writes. “When the renter gets to the car, he or she uses a smartphone application or series of text messages to unlock the vehicle and find a key hidden inside.”
Meanwhile, Kiplinger says typically you’ll make a couple of grand a year by making your car available for about 2 hours a day. This is not going to make you rich, but it could defray the costs of auto ownership. So far insurers have not weighed in on these new businesses by automatically canceling anybody’s policy, so that’s the good news!
From time to time, I see new ideas like these and I get jazzed about them even though it’s unclear whether I’m on to something or just on something! So it’s hard to know if this will be a Clark’s graveyard thing (where ideas that I loved go to die) or if it will catch fire. But I’ll be sure to keep you updated.
