2/8/2011 11:56 AM ET|
Need cash? Rent out your car
Neighbor-to-neighbor rental programs are springing up in several cities. Instead of just sitting there, your vehicle can make you money.
Tahra Makinson-Sanders of San Francisco expects to net between $3 and $5 an hour by renting out her car when she's not using it. Makinson-Sanders lends her 2006 Subaru Outback through Spride Share, a personal car-sharing network that, after a pilot period, began full operations in San Francisco in January.
It's an innovative way to help pay for the high cost of owning a car in the Bay Area, including her $250-a-month parking spot. "We're all looking at our budgets more closely," says the 42-year-old photography studio executive. "Every little bit helps."
Through a partnership with City CarShare, Spride Share cars can become available to more than 13,000 screened City CarShare members once hardware is installed that tracks usage and gives renters access via an electronic key fob. Owners designate when their car is available. Rental rates depend on the car: economy, premium, specialty, luxury. No beaters, please.
A Toyota Highlander SUV might command $9 an hour, while a late-model Honda Civic could rent for about $7 an hour, says Spride Share CEO Sunil Paul. Owners clear roughly 40% of rental rates. Spride Share estimates that sedan owners renting their car out 15 hours a week might typically earn $2,200 a year; premium vehicle owners, $2,800.
A different critter than Zipcar
The individual owner renting to the individual customer is how Spride Share and its brethren differ from Zipcar, which, with 500,000 members and cars in 28 states and Great Britain, is the dominant force in the car-share business. Instead, Zipcar has about 8,000 company-owned vehicles it parks in neighborhoods and rents out to nearby members.
Another neighbor-to-neighbor network, RelayRides, has been up and running since June in Cambridge, Mass. Owners set their own rates (Relay suggests $8 an hour for, say, a late-model Corolla, up to around $12 for an SUV.) Relay gets 15% off the top, then 20% for insurance.
Relay marketing director Boris Mordkovich says owners made about $250, on average, one recent month, while Relay's top earners brought in more than $600. Relay is signing up about 200 new borrowers a month in the Boston metro area, and launched in San Francisco in December.
Getaround, another San Francisco outfit, is testing its service in other California cities. All of the companies envision eventual expansion to major metro areas such as New York, Chicago and Washington. The trend is already global, with WhipCar operating in London and Communauto in Canada.
Insurance is key
The essential ingredient in a peer-to-peer rental fleet is the proper insurance. Spride, RelayRides and Getaround provide supplemental insurance -- through national carriers -- that covers the car and owner in case of an accident, up to $1 million per incident with RelayRides and Spride Share. Renters are covered, too, after a $500 deductible.
In most cases, you don't even have to own your vehicle outright, meaning loan-free, to rent it out. Most lenders don't object, although lease agreements occasionally nix subleasing. And, yes, the income generated is taxable.
Is it for you?
Of course, you have to get over the fear of lending your car to strangers. But renters who become members of the car-sharing network are screened, and their driving histories are checked. Penalties are assessed if cars come back late or dirty. Feedback systems allow owners and borrowers to rate other borrowers. Still, some car owners choose to rent only to friends and family.
The wear and tear on your car might be less than you think. Renters typically drive just five or six miles for every rented hour. Some 80% to 85% of RelayRides rentals last from two to four hours.
Drivers mostly run errands: picking someone up at the airport, or making runs to Ikea, Costco or a grocery store, says Mordkovich. "I like the idea that my car might get used more often by people who can't afford a car," says Spride Share car owner Makinson-Sanders. And a little extra in her own piggy bank doesn't hurt.
The article was reported by Anne Kates Smith for Kiplinger's Personal Finance magazine.
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What an asinine article. You people should know better than to post garbage like this. Did you have a deadline to meet or something?
NO WAY is a personal auto policy going to provide coverage when one RENTS out their vehicle. Loaning the vehicle? Sure (on a lot of auto policies, but not all). Seriously!
If you want to give people ideas on how to make a little extra money in a struggling economy, don't suggest something that can possbily leave them in financial hot water. Advise that they sell their blood or have neighborhood garage sales or something... NEVER suggest that they rent out their personal auto!
This is an ill informed and unresearched article. DON'T do it! Your insurance company will deny the coverage and drop you if an accident should occur. Sure, the $1 million policy provided by the car sharing company may sound enough but it is not when there's a fatality or someone ends up being paralized. Your coverage then comes in but since it will be denied, guess who will be receiving a letter from the personal injury lawyer? Last, so you loan out your car to earn how much? $600-$1000 a year.
I usually reserve personal attacks but cannot do so since this is a effing article. Can't believe Kiplinger even puts this out there. STUPIDITY will land your personal **** in jeoapardy!
I have made several comments about how asinine and irresponsible this article is. Advising people to rent their cars out? You must be out of your mind.
Here's an interesting idea to line your pockets. Someone, rent out your vehicle and when something happens and the insurance policy doesn't cover the damages, then file suit against the author, or whoever is responsible for running this idiotic article.
Perhaps this will stop this article from being run all the time... IDIOTS.
What a stupid idea!
Another wasted MSN story about nothing.
The writer should rent out his keyboard or better yet sell it to the lowest bidder.
Thank you Blerina81...as I thought...a VERY stupid idea indeed! Who comes up with this junk…and why would they post a suggestion that could rapidly lead to massive legal issues?
Rent me your car...I'll have it in a Tijuana chopshop by noon!!!!
I recommend you rent out your spouse...far more lucrative and less hassle.
Seems like a fad to me, driven by a bad economy. Most of us don't want strangers driving our cars, as most will get dinged or harmed worse, and potential personal liability is a deal killer.
If this works at all, probably most of the "rentals" are banged up junkers no one would want to drive. Seems a low end deal to me and I don't see it working over time.
This just smells of an advertisement for the bay area rental. Think about it. When i rent from traditional companies, I can purchase all that extra insurance or I can use my AAA. So, for some of that, if there were an incident, I could be liable for several thousand of the incident if I did not opt for the ins. Okay, a big company mght be able to absorb the person who decides to opt out of the additional insurance., but me renting out my car, and someone totalled it, I would then be without a vehicle, and set up for all sorts of legal nightmares trying to get money back from the people, and prevent getting wiped out financially for someone else's driving my vehicle. How many of you have gone to a store and put a big item in your vehicle, only go get home and see a black spot or crease on the interior? What about the piece that doesn't fit in so they rig it and go down the freeway, and it doesn't hold and kills the people behind. I say never. Not a cost-efficient vs. risk way to use my car.
Besides, Ikea, Sears,Big Lots, JCPenney, and any other company has deliveries. Pay the 30 to 65 bucks to have them deliver it. or wait until they have a free delivery sale or rent from Hertz Rder, Uhaul and truck it yourself.
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