Car Rental

[mitbrille]

Hi everyone,

I am planning on buying a car for the family and rent it out on Turo/Hiyacar.
Although it is not particularly a business idea but a plan to cover the cost of running the car; insurance, parking etc. So I can spend the money on something else.

Would you recommend starting a rental company or only register as sole trader for renting the car out? Or do it as many others do as an individual?

I am asking mainly for insurance purposes and claiming expanses in the tax returns.

There may be some other sides of the plan I can not fully understand. Feel free to make any suggestion.

 

[Scalloway]

I would suggest doing it as as a sole trader. Putting a car through a limited company may not be cost effective if their is private use.

 

[Naheed Mir]

In my opinion, the good option is to register as a sole trader for renting the car out. However, it would be best if you compare the cost-benefit of all available options

 

[Mitch3473]

In my opinion, the good option is to register as a sole trader for renting the car out. However, it would be best if you compare the cost-benefit of all available options

...and the risks. Your new car returned to you in a box.

 

[JEREMY HAWKE]

This is the maddest idea on here today .It will cost you more than the revenue that you bring in

 

[ecommerce84]

I can’t disagree with Jeremy, this gives me a headache thinking about it, I dread to think how much paracetamol you’ll get through if you go through with it.

A much better idea is to buy a car you can afford.

 

[AllUpHere]

Sounds like a terrible idea. I don't even let the Mrs drive some of my cars; the only way I'd let a stranger take one anywhere would be if they left me with substantially more than the full market value in cash.

 

[Socio South West]

I await the OP's follow up on this proposed venture with some interest.

How do you like your parking tickets and speeding notifications? Poached, scrambled or sunny side up?

 

[mattk]

Don't forget, you can earn £1,000 per year tax free from "trading income". I would see if you use that first before thinking about anything more complex.

I am fascinated by the likes of Turo and have considered using it a few times, but always resorted to the recognised car hire firms.

Please report back on how you get on.

 

[jimbof]

I've given up on car ownership and am doing the reverse of this, and use Norfolk Car Club (run by Co-wheels) for my motoring. I've rented out my drive instead through Justpark which just scrapes under the £1k / year limit and is much less trouble than renting a car out...

I used to drive 30K miles a year but since getting my own business with office a couple of hundred metres away from home I just don't need a car other than occasional trips. Maybe an hour or 2 a week with the occasional day hire for business (charged straight to the business).

My comment would be that many folk renting cars are generally not careful or courteous in their use of them, which is why folk like Hertz have squads of valets.

I reasonably often arrive to find a car club car not where it should be / running on fumes / a bit dirty / left with seats down from being used to move stuff / smelling of dog (despite "no dog" rules) / with new scrapes and dings / wheel trim or parcel shelf missing / etc. Still, it's good enough for my use, and significantly reduces my motor "access" costs for new cars, but I absolutely would not do this with a vehicle I owned.

Of the cars I use regularly, over the course of 2 years 2 out of 8 have been written off...! It also leads me to think that many who use this sort of service are often not accomplished drivers, being folk who don't drive very often and are not very practiced at... not hitting stuff.

I think perhaps if I was stuck with a car which through change of circumstance I couldn't afford I might consider it - but perhaps better move it on instead, but other than that, seems like a brilliant way to have a ton of headaches.

If you were in a position to do it as a business in an area with high demand for many cars you treated as a business, and didn't have to get in yourself after I guess the spread of the risk and higher rates might make it worthwhile (I'm sure the car club probably make money). but I don't think an individual with one vehicle which they may depend on the rest of the time is a good idea.

 

[Mitch3473]

Having spent 7 years in the car rental business from an owners point of view...unless you're made of very stern stuff, are completely heartless and have a small fortune waiting to be spent, go for it. Having one car, your pride and joy is asking for trouble. There are loads of idiots out there who treat a hire car as it should be treated. I hope you're fully covered in every department and then completely covered in every other department.

 

[jimbof]

There are loads of idiots out there who treat a hire car as it should be treated.

Fastest car on the planet is a hire car...

 

[ecommerce84]

Sounds like a resounding thumbs up UKBF then!

 

[JEREMY HAWKE]

Fastest car on the planet is a hire car...

Drive it like you hired it

Thats what we say

 

[mitbrille]

Thanks to everyone for their thoughts.

Many comments warned me about damages to the car and careless drivers. Don't you think there are ways to mitigate the risk; comprehensive cover, age limit of 23?

Sharing economy is not your cup of tea here. I do not have a problem with that. Probably many of you won't rent out my car.

Thanks for your suggestion of "you can earn £1,000 per year tax free from "trading income"".
I am planning to double or even triple that figure annually. I am not sure if it's even possible or realistic.

Is there any other obstacle I should look out for?

I guess finding a reliable and cheap insurance will be a nightmare. Any thoughts on that?

Thank you again for everyone.

 

[Darren_Ssc]

Don't you think there are ways to mitigate the risk; comprehensive cover, age limit of 23?

Insurance is a great way of mitigating a risk until you make a claim and then the cost of mitigating further risks becomes much more costly, especially at your level. You may even find that insurers don't want the business.

For a potential few grand a year there are better things you could do, a part time job for a start.

 

[jimbof]

I thought the likes of Hiyacar handle the insurance themselves, though the list of exclusions is worrisome.

https://help.hiyacar.co.uk/en/articles/3648149-what-is-is-not-covered-by-our-insurance
So you'll be on the hook - or have to recover it from the driver somehow - if they:
Leave keys in the car at a petrol station and someone pinches it
Mis-fuel
Have an accident under the influence
Go offroad to the beach and damage tires etc
Kind of stuff that is usually excluded in most policies.

How you as an an individual could insure against those risks for drivers unknown for a very small fleet (1!) economically, I'm not sure. Sounds likely to be very specialist and expensive. What exactly the recovery process looks like through someone like Hiyacar would be if it does go badly wrong, I wouldn't like to find out.

You'd be surprised how often I pick up the car club cars and they've clearly been to the beach as they're full of sand, or seats have stains from a McD drivethrough, etc. All stuff that would drive me up the wall with my own vehicle. For what it is worth I don't think age is a good reckoner - most of the folk I see taking out the carclub cars are middle-aged. There are slobs and careless types of all ages out there.

Anyway, it does sound like you're kind of mind made up on this so I wish you good luck.

 

[mitbrille]

@jimbof: I am not 100% sure about this. It is an uncharted territory for me. The more problems you mention the more I will be able to find a solution for. It may not seem like I do appreciate all suggestions.

 

[jimbof]

@jimbof: I am not 100% sure about this. It is an uncharted territory for me. The more problems you mention the more I will be able to find a solution for. It may not seem like I do appreciate all suggestions.

No worries.

The Turo T&Cs and insurance information looks even more fun to navigate, with their mix of US, Canada and UK requirements. When you find the UK one, it looks like a bit of a doozy...

Wonderful little nuggets in there are that if your car is rendered unavailable due to accident they don't hire you a car, instead they give you Turo credit to hire a car from them with - and not a very generous credit at that. Are there enough Turo cars around your area that this would work for you if (when?) someone prangs your motor?

Also there is no way to cover loss of hosting income in the UK it seems (so dangerous if you are at all reliant on the income). And unlike a typical UK insurer, they don't even guarantee the quality of repair work if the do get the vehicle repaired for you!

Their definition of wear and tear (which is not covered under their insurance agreement) includes dents and scratches of less than 3 inches (!) diameter to the interior and exterior. See https://support.turo.com/hc/en-us/a...xplanation-of-host-protection-plans-in-the-UK

One other thing I guess to consider is whether this is a vehicle you're in a position to buy outright, or whether it is a vehicle you are having to lease / hire purchase / etc. If the latter, I woudn't like to bet that terms of most agreements will allow you to rent it via such a service.

I'd suggest checking the Trustpilot review site for some pretty bad reviews from owners who have been left high and dry by both services when hires have gone wrong.

I'm certainly quite into the sharing economy concepts, and use both a carclub for car access and Just park to rent my own driveway out, but this would be a solid miss for me.

 

[Financial-Modeller]

I guess the proceeds from this for a single car might not cover the costs of operating a company for the sole purpose of renting out a single car. for a fleet, it probably makes more sense.

Have you considered alternatively renting a car to a local minicab / Uber driver? @mitbrille

 

[mitbrille]

Yes, I have.

My Plan B: Uber drivers are paying around £150-200 a week for renting a car. For that, I need a relatively new car, higher insurance and less money spent on service. Although it is less flexible for me but still an option.

Thanks for mentioning it.

 

[jimbof]

Out of interest, if plan B could be an option - how often do you actually need a car? Could some pay per use type model like the car club I use not work for you?

I've really enjoyed the experience of not having a piece of metal depreciating on my driveway after 20 years of car ownership. In my case I've found it very practical and versatile - in a 10 min walking radius of my house I have Ups, Golfs, Corrolas, Qashqi cars, plus Transporter, Crafter and Caddy vans. I know not every city has them, but I think they're becoming more and more popular.

 

[bodgitt&scarperLTD]

Jesus, just get a motorbike.

 

[alan1302]

Jesus, just get a motorbike.

Or maybe a unicycle.

 

[AllUpHere]

Jesus, just get a motorbike.

Bikes are expensive toys, not cheap transport these days. I just spent nearly 200 quid on a rear tyre that will be knackered in a couple of thousand miles.