The Pros and Cons of Renting Out Your Car for Extra Cash
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What is the main topic discussed in this episode?
Listen at schwab.com slash washingtonwise.
Here's your Money Briefing for Wednesday, August 9th. I'm J.R. Whelan for The Wall Street Journal. Yesterday, we told you about changes the auto industry has gone through, most notably rising prices, as a result of the pandemic. Today, we're focusing on ways people are using their cars to make ends meet.
There's a whole spectrum of cars, and people rent out everything from beaten-up old cars that are 10 or 15 years old to these high-end luxury cars or sports cars that people want because they want to splurge on something.
We'll talk to Wall Street Journal reporter Ben Eisen after the break.
Listen at schwab.com slash washingtonwise.
The latest version of gig work is people renting out their cars. But car owners thinking it's a quick way to make money are realizing there's more to it.
Who is renting cars from individuals and why are they choosing peer-to-peer rentals?
WSJ reporter Ben Eisen joins me. Ben, who are these people renting cars to?
It's really anybody who needs to rent a car. So, you know, you think of somebody traveling on vacation, someone who wants to get out of town.
It's almost like Airbnb for cars.
That's exactly what it is. It's people who have a supply of something that they don't need or want to rent out, and they're using that to compete with the likes of Hertz or Avis.
Yeah, there are a lot of places where people can rent a car, but what makes this an attractive option for potential renters?
For renters, there's a couple things that they might get from renting from an individual. You have a wider choice of cars. You can select exactly what you want. If you want an electric car, there are people who specialize in it.
What advantages do renters get by using Turo or Getaround instead of traditional agencies?
And it might be cheaper depending on who you're renting from and what the rate is.
So the type of car matters.
Absolutely. I mean, there's a whole spectrum of cars and people rent out everything from beaten up old cars that are 10 or 15 years old to these high-end luxury cars or sports cars that people want because they want to splurge on something.
So how do car owners find the potential renters?
Generally, they start on websites like Turo or Getaround, which are basically tech companies that act in a similar way to what Airbnb does.
How do car owners list and find customers — and when do hosts scale into fleets?
They connect people who want to rent out their cars to people who want to rent them, and they take a cut in the process. What you're seeing is that some of these hosts are actually... growing their fleets of cars. And instead of renting out one or two cars, they might have a couple dozen or even hundreds of cars. And at that point, some of them are fully-fledged companies. And then they start to have their own websites, and they kind of get off the ground as these sort of independent companies.
How lucrative a business is this for the car owners?
You know, it really depends on how you run your business. There are people who make a lot of money doing it, and there are people who lose a lot of money doing it. The common thread is that if you think of it as sort of a get-rich-quick scheme or some sort of purely passive income stream, you're probably going to be disappointed.
How profitable is renting out your car and what costs reduce earnings?
So when somebody rents their car out, are there fees and deductions taken by the sites like Turo and Getaround?
Turo and Get Around do take a significant amount of fees in the process, much like Airbnb or anyone else that kind of serves as a middleman. And those fees have stirred some grumbling among some of the people who rent out their cars on the website.
Yeah, you spoke to people who actually have done this and they learned some lessons along the way. But what did they tell you?
Some people just really burn out because they realize just how much work it is. If you have a bunch of cars, you have to clean them. You have to maintain them. They get into accidents. People do all sorts of things with rental cars. One guy had a car that was stolen and driven up to the Canadian border and abandoned there, and the owner had to go retrieve it.
It was stolen during the rental period?
Yeah, yeah. Cars get totaled, cars get beaten up, people smoke in them, people do all sorts of things.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:01–1:52
2
Who is renting cars from individuals and why are they choosing peer-to-peer rentals?
1:52–2:34
3
What advantages do renters get by using Turo or Getaround instead of traditional agencies?
2:34–3:08
4
How do car owners list and find customers — and when do hosts scale into fleets?
3:08–3:57
5
How profitable is renting out your car and what costs reduce earnings?
3:57–5:47
6
What real-world risks and problems do hosts report from renting out cars?
5:47–6:21
7
What best practices should prospective car-renters follow to treat it like a business?
6:21–7:31
Speakers
3 identifiedMore from WSJ Your Money Briefing
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