Is it financially advantageous and safe to rent out my personal car?
The moment that you start to rent your car to strangers you are talking about using your car as a business. Will it be financially advantageous? If you can convince somebody to rent your vehicle for more than your required monthly payments then it might be. Of course you have to determine what would be the true cost of ownership for you. It could include your auto loan, and insurance, but you would be saving on the garage costs. Of course if you don't have it rented 100% of the time you will still have some costs. Your insurance company will need to know about your plan. They charge based on the risk. If you aren't honest about the situation they won't cover you if something goes wrong. The local government may want to know. They charge different car registration fees for businesses. If there are business taxes they will want that.  Taxes. you are running a business so everybody from the federal governemnt to the local government may want a cut. Plus you will have to depreciate the value of the item. Turning the item from a personal use item to a business item can have tax issues. If you don't own it 100% the lender may also have concerns about making sure their collateral survives. Is it safe? and from the comments to the question :  Should I do a contract or something that would protect me? Nope. it isn't safe unless you do have a contract. Of course that contract will have to be drawn up by a lawyer to make sure it protects you from theft, negligence, breach of contract.... You will have to be able to not just charge rent, but be able to repossess the car if they don't return it on time. You will have to be able to evaluate if the renter is trustworthy, or you may find your car is in far worse shape if you can even get it back. "I'm going to address a couple of extra issues over and above mhoran_psprep's great answer. Insurance A lot of the jobs you describe require that you have additional insurance over and above what you currently have, normally insurance that lets you drive for payment. You should insist that anyone you rent to has this insurance. If not, you may find yourself liable and uninsured. Also you should be aware of this story: ""Quebec Uber drivers have cars seized, fined up to $7,500""."
"My wife and I have been car-free since 2011.  We spent about $3500 on car shares and rentals last year (I went through it recently to flag trips that were medical transportation and unreimbursed work related for taxes).  This compares favorably with the last year of car ownership.  I had reached a point I started needing $200+ repairs every couple of months and the straw that broke the camels back was a (dealer mechanic estimate but still) $3000 estimate to pass emissions inspection.   Over 11 years the value went from $24000 to $3600, so it depreciated about 2k per year.   I was easily spending $40 per week on gasoline on my last commute.   I now use transit with the IRS commuter benefit so I do have a base after tax transportation expense of 1200 per year.  We use weekend rentals about 2x per month (and do use a warehouse club)  She uses rentals for her job about 12 times per year, and the medical transportation came in an intense burst.   Access: Our nearest carshare pod is 0.22 miles (3 blocks); there are two hotels with full service rental car desks about half a mile from our house and every brand at the Amtrak station a mile away.  There are concrete benefits to density, take every advantage. Insurance: I always take the rental company SLI daily insurance for $15 per day.  Certain no annual fee credit cards automatically include CDW.  Every time an insurance agent cold calls me, I ask for a quote for a ""named non owner"" policy, I'd probably take it if the premium was  $300 or less per 6 months.   Tips and tricks: a carshare minivan or truck rate is probably higher than a carshare car, but compared to a full service rental, may be much lower . The best value I spend no time in my life looking for a parking spot, and spend ""this hour"" tapping away on SE on a train instead of driving." "I would split the savings as you may need some of it quickly for an emergency. At least 1/2 should be very liquid, such as cash or MMA/Checking.  From there, look at longer term CDs, from 30 day to 180 day, depending upon your situation.  Don't be surprised if by the time you've saved the money up, your desire for the car will have waned.  How many years will it take to save up enough?  2? 5? 10?  You may want to review your current work position instead, so you'll make more and hopefully save more towards what you do want. Important: Be prepared for the speed bumps of life. My landlord sold the house I was renting out from under me, as I was on a month-to-month contract.  I had to have a full second deposit at the ready to put down when renting elsewhere, as well as the moving expenses. Luckily, I had done what my tax attorney had said, which is ""Create a cushion of liquid assets which can cover at least three months of your entire outgoing expenses.""   The Mormon philosophy is to carry at least one year's worth of supplies (food, water, materials) at all times in your home, for any contingency. Not Mormon, not religious, but willing to listen to others' opinions. As always, YMMV.  Your Mileage May Vary." "Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the ""primary"", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't ""purchase"" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank." Contacting a limo hire company is easy and hiring a car for personal use is also very easy. But it is seen in a majority of cases that those using these vehicles have no idea of what not do while using them. As a result, they fail to get the maximum benefit of the vehicle or the money. These days there are a lot of solutions which allow you to hire a car on the Internet itself. One of the major benefits of booking on the internet rental-car solutions is that you will preserve a fortune and ensure that things are effectively structured, thus saving sufficient time as well. We provide the Car rental services at a cheap price in the whole world. The best way to reduce costs and plan for local transportation when you are on a vacation is to book your car. "I've lived this decision, and from my ""anecdata"": do #3 I have been car-free since 2011 in a large United States city.  I was one month into a new job on a rail line out in the suburbs, and facing a $3000 bill to pass state inspection (the brakes plus the emissions system).  I live downtown.  I use a combination of transit, a carshare service, and 1-2 day rentals from full service car rental businesses (who have desks at several downtown hotels walking distance from my house).  I have not had a car insurance policy since 2011; the carshare includes this and I pay $15 per day for SLI from full service rentals.   I routinely ask insurance salesmen to run a quote for a ""named non-owner"" policy, and would pull the trigger if the premium cost was $300/6 months, to replace the $15/day SLI.  It's always quoted higher.   In general, our trips have a marginal cost of $40-100.  Sure, this can be somewhat discouraging.  But we do it for shopping at a warehouse club, visiting parents and friends in the suburbs.  Not every weekend, but pretty close.   But with use of the various services ~1/weekend, it's come out to $2600 per year.  I was in at least $3200 per year operating the car and often more, so there is room for unexpected trips or the occasional taxi ride in cash flow, not to mention the capital cost: I ground the blue book value of the car from $19000 down to $3600 in 11 years.   Summary:  Pull the trigger, do it :D" "I worked for a major car rental company (not Hertz, but comparable) for quite a while, taking reservations by phone. I completely agree that the reservation system is terrible, and is only vaguely based on the reality of their vehicles in stock at best. The problem is, from a strictly business perspective, taking more reservations than they have cars is currently considered the most profitable model for them.  To play devil's advocate just a little, switching to a ""take only one reservation per vehicle, reserve it to 100% lock it in"" model is a bit more complicated than it sounds. In order to guarantee a specific car for a customer at a specific time, they either have to leave that car sitting on their lot until you rent it (not making money), or keep renting it out to other people in the interim. If they rent it out to someone else before your rental comes up, that removes the vehicle from their control. Bordering on constantly, renters don't return the vehicle within their promised schedule or return it in a damaged or otherwise unsuitable condition. To be clear I'm not trying to make excuses for the rental car company (there are many reasons I no longer work there), but it's objectively hard for them to get a specific vehicle if, say, all but one of them were in wrecks the previous night, and the person renting the last one drove it across the country without warning the rental office and refuses to come back. Those problems all get solved eventually, but that doesn't help you when you show up and can't get the car you reserved.  So, they continue to take excessive reservations, and just give people whatever they happen to have when they show up, if they have any cars at all.   There's definitely better ways to do it for the customer, but like many businesses, they'll continue to do it whatever way they determine is best for their profits.  Edit: Words." Any way you look at it, this is a terrible idea. Cars lose value.  They are a disposable item that gets used up.  The more expensive the car, the more value they lose. If you spend $100,000 on a new car, in four years it will be worth less than $50,000.*  That is a lot of money to lose in four years. In addition to the loss of value, you will need to buy insurance, which, for a $100,000 car, is incredible. If your heart is set on this kind of car, you should definitely save up the cash and wait to buy the car.  Do not get a loan.  Here is why: Your plan has you saving $1,300 a month ($16,000 a year) for 6.5 years before you will be able to buy this car.  That is a lot of money for a long range goal.  If you faithfully save this money that long, and at the end of the 6.5 years you still want this car, it is your money to spend as you want.  You will have had a long time to reconsider your course of action, but you will have sacrificed for a long time, and you will have the money to lose.  However, you may find out a year into this process that you are spending too much money saving for this car, and reconsider. If, instead, you take out a loan for this car, then by the time you decide the car was too much of a stretch financially, it will be too late.  You will be upside down on the loan, and it will cost you thousands to sell the car. So go ahead and start saving.  If you haven't given up before you reach your goal, you may find that in 6.5 years when it is time to write that check, you will look back at the sacrifices you have made and decide that you don't want to simply blow that money on a car. Consider a different goal.  If you invest this $1300 a month and achieve 8% growth, you will be a millionaire in 23 years. * You don't need to take my word for it.  Look at the car you are interested in, go to kbb.com, select the 2012 version of the car, and look up the private sale value.  You'll most likely see a price that is about half of what a new one costs. I might be missing something, but I always understood that leasing is about managing cash-flow in a business. You have a fixed monthly out-going as opposed to an up-front payment. My accountant (here in Germany) recommended: pay cash, take a loan (often the manufactures offer good rates) or lease - in that order. The leasing company has to raise the cash from somewhere and they don't want to make a loss on the deal. They will probably know better than I how to manage that and will therefore be calculating in the projected resale value at the end of the leasing period. I can't see how an electric car would make any difference here. These people are probably better informed about the resale value of any type of car than I am. My feeling is to buy using a loan from the manufacturer. The rates are often good and I have also got good deals on insurance as a part of that package. Here in Germany the sales tax (VAT) can be immediately claimed back in full when the loan deal is signed. "Personally, I would: a) consider selling the car and replacing it with a 'cheaper' one.  If you only drive it once a month, you are probably not getting much 'value' from owning a nice car. b) move the car (either current or replacement) out to your parent's place.  The cost of a plane ticket is about the same as the cost of the garage, and your parents would likely hold on to it for free (assuming they live in the suburbs, and parking is not an issue) option b should lower your insurance costs (very low annual mileage) and at least you'll get some frequent flier miles out of your $350 a month. That being said: this is a ""quality of life"" issue, which means that there isn't going to be a firm answer.   If you are 25, have little debt, which you are paying off on time, have an emergency fund, and you are making regular contributions to your 401k, you are certainly NOT ""being seriously irresponsible"" by owning a nice car.  But you may decide that the $1000 a month could be better spent somewhere else." If you can generate a higher ROI by renting than by cashing out and investing, then you should rent it out. Please consider your risk tolerance as well. It's always a personal decision whether to assume higher risk for a higher return. The only reason to lend the money in this scenario is cashflow. But considering you buy a $15000 car, your lifestyle is not super luxurious, so $15000 spare cash is enough. I understand that, but there are so many mitigating factors now that I don't feel safe. It's more like thinking that airplanes are safe, but if you're walking through the airport and you notice the pilot at the bar and them see him with his shirt untucked as he bumps his head getting into the airplane you might not get onto that airplane.   I wouldn't give this advice to someone in their 20s, but we are in our 50s. We have enough to live on comfortably with savings and my husband's pension and social security and passive income from the rental. It's just not worth the risk. As it is I am retired and can travel and eat whatever I want whenever I want. And the rental property is our hedge against inflation. I just see no reason to risk that. You SHOULDN'T lease one if you are going to get an economy car, if you don't drive too much (<15K / year), and you want to hang on to the car for a long time.  Otherwise, if you are a regular driver, driving a leased new quality car can be cost effective. Many cars now have bumper-to-bumper warranties that last as long as the lease (say 80K). So there is rarely any extra costs apart from regular maintenance. The sweet spot for most new cars is in the 5th, 6th, or 7th years, after they are paid off. But at that point, you may find you have maintenance bills that are approaching an average of $200 - $300 per month. In which case, a lease starts to look pretty good. I owned a 7 year old Honda Accord that cost only $80 less per month in maintenance than the new leased VW that replaced it.  Haven't looked back after that. Into my 3rd car and 9th year of leasing. It's my understand that leasing is never the better overall deal, with the possible exception of a person who would otherwise buy a brand new car every 2 or 3 years, and does not drive a lot of miles. Note: in the case of a company car, Canadian taxes let you deduct the entire lease payment (which clearly has some principal in it) if you lease, while if you buy you can only deduct the interest, and must depreciate the car according to their schedule. This can make leasing more attractive to those buying a car through a corporation. I don't know if this applies in the US. The numbers you ran through in class presumably involved calculating the interest paid over the term of the loan. Can you not just redo the calculation using actual interest and lease numbers from a randomly chosen current car ad? I suspect if you do, you will discover leasing is still not the right choice.