How can I rent my car out in Australia? Top questions answered

How can I rent my car out in Australia? Top questions answered

Do you spend hundreds of dollars a month on a car that sits idle for most of the week? You’re not alone. Owning and running a new small car can cost nearly $8000 a year. You’ll pay a bit less if you don’t drive it every day, but the bulk of the cost is what you spend just to own a car: the depreciation, rego, insurance, servicing and repairs. By renting out your car, you can save money by turning it from a drain on your wallet into a money maker.

You can rent out your car in Australia if:

  • It is safe and comfortable for people to drive
  • It is available a fair amount of the time - i.e. you don’t drive it every day
  • It has registration with appropriate CTP insurance
  • It is located in an area where there is a peer-to-peer car rental platform operating
  • It is not too old (the age limit depends on the platform, but it should generally be no older than a 2001 model)
  • You are willing to do a bit of housekeeping to keep your car ready to borrow
  • You don’t have a criminal history and have a good credit history

There are a few different options when it comes to renting your car out to someone in Australia, from basic “key handover” type arrangements to integrated systems where you don’t need to meet borrowers at all. Providers typically organise to install a GPS tracker in your car, organise insurance which covers borrowers and manage payments for you. You have the ultimate control over when you want to rent out your car.

If you’re thinking about whether or not you should rent out your car, there are a few questions you should ask yourself before you list your car on a car sharing platform. We’ve gathered and answered the top questions we get when members apply list their cars on our platform.

Why Joy rents her car out with Car Next Door

Renting out your car to someone

1. What kind of condition does my car need to be in to rent it out?

2. How available does my car need to be to rent it out?

3. Can I rent my car out in my area?

4. How much money can I make by renting out my car?

5. How does the insurance work?

6. Is renting out my car really a good idea?

1: What kind of condition does my car need to be in to rent it out?

Most importantly, your car needs to be safe. Secondly, it needs to be comfortable for people to drive. Your car should be:

  • Roadworthy – Your car must be in safe, reliable, working order. If you are unsure of how safe your car is, have it checked by a licensed mechanic. This is essential for your own safety, even if you aren't renting it out!
  • No older than a 2001 model - Cars manufactured before 2001 don't necessarily have all the features we would consider standard these days (like airbags), so many peer-to-peer car-sharing schemes set a limit on the age of the car. The limits vary from scheme to scheme, so you should check if your car is eligible with each of them.
  • In good condition - A few small scratches here and there are fine, but the car should be in good working order.
  • Clean - Nobody likes the feeling of being in a dirty car! Your car should be kept clean on the inside and outside.

2: How available does my car need to be?

Nobody will be able to rent your car out if you are always using it. Your car should be available for at least half the time each week for you to make a decent income, but the more available your car is the more you'll earn.

  • Is your car available on weekends? Most bookings are made on weekends, so if you don't use your car much on Saturday and Sunday you could get some good bookings from Borrowers.
  • Is it available at the same place all the time? Borrowers book cars that are close to them. If you take your car to work some days but it sits at home other days, bororwers won't be able to plan ahead and know that your car will be at the right place when they need it.
  • Do you want to rent your car out long term? With some car-sharing options like Drive My Car, you can rent your car out for months at a time when you go overseas or don’t need your car for an extended period. Other car-sharing services let you rent out your car by shorter periods of time.

3: Can I rent my car out in my area?

If you want to rent out your car it needs to be in an area where a peer-to-peer car rental platform is operating.

There are three major peer-to-peer car sharing operators in Australia:

1. Car Next Door:

  • Operates throughout New South Wales and Victoria, and in metropolitan Sydney, Newcastle, Brisbane, Gold Coast and Canberra.
  • Car Next Door install your car with a GPS tracker, key lockbox and calendar management system so that you don’t need to meet Borrowers.
  • You manage the car's calendar and make it available to Borrowers whenever you’re not using it. You can block out the car for times when you need it yourself.
  • Members can borrow for just an hour, or weeks at a time.
  • Membership includes insurance and roadside assist for borrowers; you need your own policies to cover your car at other times
  • You’re reimbursed for fuel that borrowers use
  • You set the rates for your car
  • Borrowers are screened for ID, driver’s licence, credit history and criminal history. No provisional drivers.

List your car with Car Next Door

2. Drive My Car:

  • Operates Australia-wide
  • Long-term car sharing option: minimum of 2 days, up to a year.
  • Key handover model means you will need to arrange to meet with the borrower to rent out your car.
  • You set the rates for your car and agree to an included number of kilometres for the booking.
  • GPS is optional.
  • Insurance for borrowers only, you still need your own comprehensive insurance.
  • Borrowers are screened for ID, driver’s licence, credit history and criminal history. No provisional drivers.

3. Carhood:

  • Operates at Sydney, Melbourne and Brisbane airports only
  • Park your car at the airport when you are travelling and get free parking
  • Your car is rented out while you are away and you’re paid around $10-15 per day
  • Short to long term. No hourly rates for borrowers.
  • GPS is optional
  • Insurance for borrowers only, you still need your own insurance
  • Borrowers are screened for ID and driver’s licence. No provisional drivers.

4. How much money can I make by renting out my car?

How much you'll earn depends on the type of car you have and where you live, but the average owner on Car Next Door makes around $3,500 a year. Small cars earn about $250-350 a month, large cars and SUVs around $300-500 a month and vans and utes can earn between $350 and $750 a month.

A lot of our owners earn enough to cover all their car's expenses, meaning they can own their car for free!

List your car with Car Next Door

5. How does the insurance work?

In most peer-to-peer car-sharing schemes, you keep your own insurance and the platform provides insurance to cover Borrowers.

It's rare for cars to be damaged - on average, a car would need to be rented out through Car Next Door for over two years to experience any minor damage, and about 20 years to experience major damage. If the worst did happen our repair process would kick into gear to sort out the insurance claim and organise the repairs, and get your car back in tip top shape as soon as possible.

6. Is renting out my car really a good idea?

We think so! It's an easy way to reduce your car's costs, reduce waste, and help your neighbours. Car-sharing isn't for everyone though so if you think your car is eligible but you're still a little unsure, take a look at the top reasons people rent out their cars to find out if it's right for you.

List your car with Car Next Door


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