Pros and Cons of Renting Your Car to Others

Is renting your car out worth it? Yes, there are now services that allow you to rent your car to others. Commonly called “car sharing,” rentals between private individuals facilitated by third parties are a growing option for those who don’t own cars as well as for drivers who want to earn some extra money from automobiles that sit unused most of the time.

This is not to be confused with ridesharing apps like Uber or Lyft. Strangers would actually be renting your car and driving it themselves. So what are the pros and cons of renting your cars to others?

It’s estimated that there are about 26 different car-sharing programs within the United States. Between them, there are more than half of a million users who share thousands of cars. While there is the benefit of earning money by renting your car, it’s important to learn about the pros and cons of this process and what it means for your insurance coverage on your personal auto insurance policy.

Can you rent your personal car?

Car sharing is an alternative to traditional rental car companies that allows you to rent your own car. The difference is that drivers rent cars from individual car owners rather than from larger car rental companies. They may do a pick-up at a designated spot or ask you to do a drop-off at an airport or other location.

Renting out a car from a car share service may be best for renters who only need a car for a short amount of time and need it at any time. Drivers can find a vehicle for rent through a mobile app with most car-sharing platforms. Unlike traditional rental cars, these are not meant to be taken long distances. Some renters put mileage limits on their cars with a fee for every mile after. Renters cannot typically pick a car up in one city and drop it off in another.

Car owners can list their vehicles on a car-sharing marketplace in order to rent their cars out to others. The car must meet certain qualifications in order to be approved to be listed and rented on the platform. The qualifications and requirements can vary by car renting service.

A car rental service in this form can be convenient for both car owners and drivers looking to rent. The owners can make some extra money while they are not using their car. Renters have the convenience of being able to get a car quickly and at pretty much any time. The rental prices to rent a car through one of the car-sharing services available may depend on the types of cars you are looking to rent as well as your location.

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How to Rent Out Your Car

There are many car-sharing services available today with which you can rent your car to others. Some of the most popular ones are Turo, Zipcar, and Avail. A formerly car-sharing service, once known as Car2go and later as SHARE NOW began winding down operations in 2019.

Turo, formerly RelayRides, is the first and largest car-sharing marketplace. It is headquartered in San Francisco but with owners that rent their cars dotted across the United States, Canada, and the United Kingdom. As a rental company, Turo allows owners with automobiles under 12 years old and fewer than 130,000 miles to participate in their car-sharing service. Naturally, you must be a valid driver. You can purchase coverage through Turo, or provide proof of the appropriate commercial insurance.

Beyond those two requirements, the company also expects cars to have a fair market value of $150,000 or less and a clean title. Turo claims that car owners who list their car for rent on their car-sharing marketplace earn an average of $900 per month. Price and payment can vary based on a number of factors.

For example, let’s say you lived in Los Angeles and had a 2018 Ford Taurus. Using Turo’s car-sharing calculator, and renting your car out for 16 days per month, you would net about $54 per day or $894 per month. And that leaves you with almost half of the month to use the car yourself.

If you look on Turo now, you might see some cars renting for $706 a day. Prices vary widely based on demand.

In 2011, General Motors teamed up with Turo (then RelayRides) to allow GM car owners to leverage OnStar in their cars to rent their cars to others. OnStar’s connectivity solution allowed RelayRides’ members with increased security, reliability, and accessibility.

OnStar allowed car owners to lock and unlock cars remotely so owners would not have to meet and hand over their keys to the renter. A renter could use their smartphone to get access to the car.

General Motors launched its own peer car-sharing service in 2016 called Maven. Unfortunately, GM shut Maven down in 2020 as a result of the coronavirus pandemic.

How is my personal auto insurance policy affected when renting my car out?

Personal auto insurance policies typically don’t cover any incidences when renting your own car or for any other commercial use. However, most car-sharing services include car insurance coverage for when the renter is using the car. They may charge you an extra fee for it on each rental.

Don’t take a chance on your personal insurance denying a claim. While your insurance would cover family members borrowing your car or even damage due to theft as long as you have the right coverage, they are not obligated to cover business ventures and risks.

Before listing your car, make sure you understand the insurance coverage and limitations as well as if there is a fee you will need to pay for insurance. You should make sure there will be no gaps in your personal car insurance policy and the insurance options offered by the car-sharing service. Make sure your state’s insurance requirements are met. The company will let you know if any other insurance options or additional insurance coverages are needed.

The insurance coverage offered by the car-sharing companies typically includes liability insurance, uninsured/underinsured motorist protection, personal injury protection, and comprehensive and collision coverage for the renter up to certain limits. Turo provides insurance through Liberty Mutual.

Car sharing platforms also tend to offer roadside assistance to those who rent a car through their platform. Both Turo and Getaround offer 24/7 roadside assistance in case of emergencies.

Pros and Cons of Renting Your Car to Others

So what are the pros and cons of Turo and other car-sharing organizations? Check out the lists below to find out.

What are the positive aspects of renting your car out?

What are the negative aspects of renting out a car?

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