Drive My Car & Car Next Door

Has anyone looked at leasing out cars through a peer-to-peer service as a form of investing?

 

Ive had some friends with experience with carnextdoor. After petrol costs, registration, insurance, racking up kilometres on your car - i don't think the return would be great. It's more like reverse mortgaging your car at an attractive rate, than your car working as an investment.

But as a way to have less cars on the road, it's great! And make a small profit after covering all the costs of running your car, which I think is pretty great. Probably saves you $3000+ pa on car costs, but with some hassles. Apparently its just annoying to have to remember to book your own car and not great if you have to leave things in your car.

 

Been a few different types on shark tank recently

 

What about insurance costs and damage to your car?

Recently I had to use a hire car as my beloved Commodore was off the road.

Let me tell about the insurance. The insurance excess was $2800 per claim. I reduced it to $500 by paying an extra $25 per day (nearly as much as the hire cost per day).

But wait, there's more, If the car is damaged by hail or if it's damaged from hitting a person/animal, or any damage to the roof/undercarriage or if I'm involved in a single car accident (eg run off road and hit a pole) THEN there is no insurance cover at all.

Needless to say I kept off the footpath with that hire car.

I think with these peer to peer leasing the big risk is that you will end up with a wreck of a car in no time at all.

Unless you got the type of cover the hire coys have. And then you'll have huge arguments over damage and claims.

 

@datto that is an interesting point especially now it's becoming more popular. Your car is on the care of tenants rather than ppor people we all know how that ends

Be interesting to see how they cover it

 

this would be running a business not an investment. you would find it hard to justify buying a depreciating asset as an investment

 

Some great points from others. Insurance being a biggie. I doubt there are many consumer insurance policies that would cover this type of enterprise.

 

For carnextdoor at least, the insurance is covered via the sharing company itself. The company has all the borrowers credit card details, people have to take 4 photos before and after they borrow it, to prove they haven't caused any damage, etc etc.

Like Uber etc, it's built around the use of smartphones

 

Haven't paid the excess in ten years. As I hire cars around 20 days a year I reckon I am $5,000 in front, and would still be well in front if I did have an accident where I had to pay.

If you are going overseas and you get the right travel insurance you don't pay either. I get annual travel insurance for around $300 a year and did have one scrape but finished up not paying $0.01.

 

We hire cars on a weekly basis. Never pay the insurance reduction

 

I average three or four accidents a year so for me insurance is a big issue. especially if my name is on the policy lol, I'm blacklisted by most companies lol.

 

Across a company or just you individually? Why so many?

 

I always assumed you were a male! My mistake

 

Await the wrath of all female members!! ... you are playing with fire mate...

 

I'm a keen fisherman but i don't even own a rod!

 

Hi there, I'm from Car Next Door. The system isn't really set up as an investment / profit-making platform (though some car owners do make a profit): it's more for offsetting the costs of a car that you already own, and being able to drive it yourself when you want to without having to wear all of the costs of ownership.

Average car owners earn around $2,000 - $2,500 a year after the costs of the borrowers' driving are taken into account. For many people, that covers the standing costs of owning the car. Utes and vans earn their owners around $4,500 a year on average. Top-earning vehicles on the platform earn $7k to $10k a year. The aim is to reduce the number of cars that sit around idle all day in our cities, though, and not to get people buying more cars to rent out.

[Response: Yes, you have to remember to book your own car and take your personal belongings out. But compared with other ways to earn money, it's not that much of a hassle - you can just do it from your smartphone.]

Lots of other questions about earnings, insurance etc are answered in our FAQs: Car Owner FAQs – Learning and Support Centre

 

You'd think I was legally blind.lol.

No serious accidents though. Things like hitting wheelie bin(s) for six, the odd fence post and the usual carpark bump and scrapes.

I suppose three or four accidents a year may be an exaggeration but you'd be surprised how many bingles you have a year.

If you average 20 thousand km per year and you never have a scrape you're doing real good. Take a walk around your car and you'll be surprised how many small car park hits your car has taken without your knowledge.

I have made some some insurance claims, sure, and I do pay a good premium each year but I'm still with the same insurance company for the last five years.

 

Awesome replies (For some frustrating reason I don't get alerts when people respond to my posts! - If anyone knows how to fix this I'd love to hear!!)
I think it's an interesting concept - Drive my car seems to be more suited to investors - They do much longer term hire though.

The concept that it's a "business" not an "investment" is probably more accurate though - given that the car is going to depreciate in value.

I imagine it making sense with an older vehicle that's already experienced a lot of depreciation and has some minor dents or scratches already.

I'm certainly not leasing out my Alfa

 

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I had a client who owned a reasonable Sydney car hire business. You would be surprised at the judgements he had in his favour. All court notices came to our office as the reg office. Best one was a 4t removal truck - Drove off with backdoor flapping open. Hit a porsche going around a corner which was brand new - A lot of damage but it then struck a merc parked on road. Porsche was uninsured and so was the Merc. His insurance was classified as overbody damage (its anything above the base of the truck body !!) and cover was declined. This is a standard clause. Car hirers have a load of them. The hirer had a $54,000 judgement awarded against him. He had a few of these a week and used a law firm that specialises in this work for all the major car hire companies. (Mascot based!!)

Insurances cover both vehicles. I would take the insurance if I were you. Or an annual domestic + international travel policy for excesses.

 

Trucks are a different matter to a car. I do take out the excess with a truck.