Rent out your car is a strategic decision taken by an individual or family when cost reduction and making more money are considered necessary. The said car is given out to a driver through various methods to engage the vehicle for additional income to the owner.
Why will an individual rent out their car?
- Save money from the expenses of running the car
- Earn extra income from the funds from the rental car
- When there is more than one car for the individual
- You want to use alternative means of transportation
Save money from the expenses of running the car
The costs of running a car include the cost of fueling, maintenance, and wear and tear. Cars are often seen as assets to the owner; in retrospect, anything that takes money out of your pocket is a liability. When an owner who, out of a long saving, acquires a new vehicle for use and in the course of using the car realizes they are spending more, they may resolve to reduce such leakages by renting out the car to an Uber driver or other renting individuals or companies.
Earn extra income from the money from the rental car
An individual or family could want to earn extra income by renting out their vehicle, especially when there is an alternative means of movement. In the case of having extra income from the money from the rental car, the individual will decide to contact a car renting company or an individual driver and engage in terms for the period and amount to be remitted for the use of the vehicle. Other details such as fueling, parking space, maintenance and regular services are all agreed upon.
When there is more than one car for the individual
The decision to rent your car could be based on the fact that other cars are available for use. Instead of allowing the idle car to be parked unused, an individual or family may decide to rent out such a car for extra income, preventing the car from rusting and from depreciation as a result of being idle.
You want to use alternative means of transportation
There are several means of transportation such as the use of one’s car, use of public transport, use of train in developed countries and use of official vehicles. The use of trains and joining public transport are a few of the alternative means of transportation in most countries. In the United Kingdom, for instance, parking tickets and other related expenses in the use of personal cars could make someone choose to use the train or bus system, which the price may also be far lower than a private vehicle.
Methods of renting out your car
Answer: There are several methods of renting out your car, and it includes:
- Renting out on your own
- Hire purchase
- Renting through a transport or logistic company
- Provide to suit the company’s business
Renting out a car on your own
Although renting out a car on your own is surrounded by the risk of default in payment and loss of the vehicle, many individuals usually use this method when renting out their cars to another person. In some cases, the cars are given to friends and family members or referrals by friends and family. In most cases, there is no legal agreement on the terms and conditions of usage. In most developing countries, this arrangement hit a brick wall as the drivers take advantage of the non-existence of a contract. The driver, in most cases, will give excuses of why they could not work or cannot agree on the verbal agreement with the owner of the car.
Hire purchase
Hire purchase is the system where a vehicle owner gives the car to a driver on a hire purchase terms and conditions. A hire purchase term and condition is a situation where the owner calculates a percentage increase and includes that increase in the initial cost of the car and spread for one year or as agreed with the user. The hire purchase expects that upon the full payment of the said amount, the car belongs to the driver and stops to belong to the initial owner. While this method often makes a driver become the owner of the car after some time, fulfilling the terms and conditions as specified in the agreement is most difficult for either party. In some cases, the driver could default in payment after some time, and it becomes difficult to execute the contract or the driver loses the already paid amount when the initial owner performs such right of taking over the vehicle.
Renting through a transport or logistic company
Renting through a vehicle or logistic company could be termed “risk transfer”. Risk transfer means that all risk associated with operating the car is transferred to the company whose business is transport or logistics. The only inherent risk associated with this type of rental could be described as an inherent risk which means that should the transport of logistic business fail to operate tomorrow, the cars rented may also be among the assets that would wound up from the transport or logistic company.
Conclusion
While many people look forward to becoming an entrepreneur or intrapreneur, renting your car out could be one of such ways to commence a car renting business. The number of cars to rent out can start small, from one to several. Car leasing is also not limited to one location, primarily when it can be managed effectively. Some reasons for renting out one’s car are to save money on monthly expenses, earn an extra income, have other means of transportation, and have more than one car in your fleet of cars. The methods of renting your car out could be by renting it out by yourself, purchasing it, or renting through transport or a logistics company.
Frequent Ask Question
Question:
Why should I rent my car out?
Answer:
I can rent my car out to save money on monthly expenses in maintaining the vehicle, earn extra income, and when I have more than one car.
Question:
Which method can I use to rent out my car?
Answer:
You can do this yourself by looking for a competent driver that can rent your car and pay for it. You can give it out to a transport company or logistic company whose business uses several vehicles for interaction, and you can also give it out as hire purchase.
