If you decide you want to rent out your car in South Africa over the holidays, there are four principal outlets currently. Namely, RentMyRide, Bolt Fleet P2P, Zipcar and CarShareNova, go check them out. As we know, South Africans love a good side hustle to make a bit of extra cash. Especially if you have a spare car lying around and tourists are descending in droves.
And this is perfectly acceptable, as long as you take necessary precautions. The idea to rent out your car in South Africa through a P2P scheme was born from the success of companies like Airbnb. Former Bolt employee, Themba Mgimeti, explains that P2P is making the rental market ‘more affordable and accessible.’
TIPS TO RENT OUT YOUR CAR IN SOUTH AFRICA
“Traditional rental companies face massive costs. Overheads like owning fleets of cars, secure depots, staff operations and managing car handovers. All those costs get passed onto customers. However, when you rent out your car in South Africa, all of that is zero cost to the renter. This results in lower prices, more choice, and now anyone with a (spare) car can benefit,” Mgimeti says.
However, when you rent out your car in South Africa, what assurances are there it will be returned in one piece? Big rental companies typically insure their cars under a large commercial or fleet insurance policy. And will ask if you wish to purchase extra cover. But when you rent out your car in South Africa, the onus is not on the P2P company, but rather you, the owner, to ensure it is comprehensively insured.
INSURANCE CONCERNS
Ernest North of Naked confirms that a typical personal vehicle insurance policy will not payout if you are earning an income through P2P rental. This is because of the risk attributed when a car is used as a business asset. More or less, the owner is more likely to take care of their own car and not damage it, than a third-party renter.
Worse still, due to the relative newness of P2P rentals, there are no bespoke policies that cover it. Therefore, you’ll typically need to take out a commercial or fleet insurance policy when you rent out your car in South Africa. These are a lot more expensive to cover the risk factors. So, many early adopters of P2P simply rely on existing personal insurance, or none at all, and hope nothing untoward happens. Which is risky …
SO, SHOULD YOU RENT OUT YOUR CAR IN SOUTH AFRICA?
The temptation is high to rent out your car in South Africa, particularly over the holiday season. Estimates on how much you can earn vary greatly depending on the condition of the vehicle and time of year. Experts say R200 per day, or R3 000 a month, out of season. And as much as R700 per day, up to R12 000 per month, in peak holiday season.
However, this must be tempered with a suitable insurance policy. And acknowledgment that if your car changes hands every few days, the nature of the risk also increases. Also, it is important to disclose that your car is being used for rental. Otherwise your insurer can decline a claim for theft, damage or liability. Potentially costing your tens or even hundreds of thousands.
But what do you think? The festive season is coming up, would you like to rent out your car in South Africa? Let us know in the comments section below …
