Peer to peer car lending: making money with your car
Tired of long waits and boring options at the car rental counter? Learn why peer to peer car lending is a great alternative. We’ll cover the basics of car lending, including what it is, how it works, and why you’d want to let a stranger use your car. Then we’ll profile Turo, a popular car lending service, highlighting what you should know before using it and why it might become your new favorite way to travel.
What is peer to peer car lending?
Peer to peer car lending (or peer to peer car rental) connects travelers who need a car with car owners who have a car they’re not using. If you’re looking to rent, peer to peer car rental can keep you out of the line at the rental counter and give you more time and mileage for your money than you would get from a standard rental company. If you have an extra car, this system lets you make money with your car instead of watching it take up room in your driveway. The car lending service benefits by taking a fee for facilitating the rental, often a percentage of the money exchanged by owner and renter.
Car lending services use their websites to bring potential borrowers and lenders together. Car owners join a peer to peer car lending service and list cars online. Renters who are members of the same service can then view the descriptions of possible rental cars, complete with the location, the make of the car, and the rental price. Once the car renter and car owner make an agreement, they arrange for the car’s pick up or delivery (some options, depending on the service and the individuals involved, are for the owner to drop the car off at the airport or for the renter to pick up the car at a prearranged local spot). Then the renter is free to hit the road for the prearranged rental period.
Does borrowing a car from someone you’ve never met sound risky? Car lending services such as Turo have systems in place to keep the risk down. Members of the car rental service must meet certain eligibility requirements—for renters this includes a good driving record and for owners it involves verifying that cars meet certain age and safety criteria. Car sharing services also offer insurance to both owners and renters.
Peer to peer car lending, as described above, is a form of the growing movement toward car sharing. An article in the New York Times that discusses car sharing includes this figure: over 1.5 million people in more than 27 countries use car sharing services. This figure only includes the type of car sharing service that relies on a fleet of cars owned by the service, such as Zipcar. This excludes a wide swath of car sharing models. Services like Turo (which changed its name from RelayRide in 2015) and GetAround rely on peer to peer lending, forgoing a standardized fleet in favor of letting car owners rent out the vehicles in their driveways. Other services operate as a peer to peer version of a taxi, connecting drivers and passengers. Uber and Lyft are two big names in this realm. Add the users of these car sharing models to the figure above, and you have millions of people all around the world relying on car sharing to get where they need to go.
Has peer to peer car lending piqued your interest? The rest of this article looks at the car lending service Turo to walk you through what to consider and how to get started.
Renting a car through Turo
According to the Turo website, changing from a standard rental car user to a Turo traveler only takes a few steps. You need to sign up as a Turo member, which you can do conveniently using Facebook, Google, or a basic email account. Next, you’ll go through an identity check and a process to confirm that you’re eligible to use Turo. You must be at least 21 years old, own a (working!) cell phone, and meet the criteria for Turo’s auto insurance score.
After you’re approved to start renting through Turo, you get to look for the car you want to use during your trip. Some owners list their cars as available to book instantly—in that case, you can pick your car and move forward right away. Other owners want an opportunity to approve their renters before making an agreement. If you choose a car that cannot be booked instantly, the owner will still respond to you within 8 hours.
As you’re deciding which car to book, make sure to consider mileage along with the kind of car and its location. The mileage that an owner includes in the rental price is listed with the price. If your trip takes you farther than this number, you’ll need to pay extra for those additional miles. You’ll need to pay for gas to refill the car’s tank to where it was when you got it. Turo will also add a fee for their service and for the protection plans they offer.
Turo offers three levels of protection in case you get in a car accident or run into other trouble while you have the rental car. If the owner of the car has also opted to use the protection that Turo offers, you may also be able to use national roadside assistance if you find yourself in need during your travels.
Once you’re ready to get your rental car, you’ll need to arrange where and when with the owner. Some owners are willing to deliver, including to the airport, while others ask you to pick up the car at a spot they’ve set. You’ll need to show the owner your driver’s license, as well as take a brief look at the car together to see if there are any preexisting dents or other issues.
You can ask the owner of your rental car for a rental extension while you’re on your trip if you realize that you need more travel time. When you reach the end of your rental period, you’ll be responsible for parking the car safely (and legally) in a spot you and the owner have agreed on.
Lending your car through Turo
If you’re thinking of renting out your car, Turo makes the process simple. In addition to signing up for Turo, you need to make a car listing that includes the relevant details about your vehicle. To list your car, you must have personal insurance and keep your car maintained to Turo’s standards. You’ll also need to decide on the rental price you’re asking, or let Turo provide a price for you based on information about your car.
When you’re listing your car, you’ll have the opportunity to accept the protection Turo offers or to provide your own commercial insurance. Turo offers three levels of protection. For each level, Turo will deduct a different percentage from the money that renters of your car will pay.
You’ll also be able to choose whether to allow potential renters to book your car instantly, or give yourself the opportunity to confirm a traveler’s request after asking any needed questions.
Thinking about peer to peer car lending?
If you’re looking for a cheap, flexible way to get around on your next vacation, or if you want a simple way to make money with the car in your garage, joining a service like Turo might be a great move for you.