By Nico Strydom
A new concept that had everybody talking recently, is the possibility of renting out your car for an extra income.
A vehicle-tracking company is considering a so-called “Airbnb option” that will enable you to make money out of your car.
Car owners are, however, warned to check their insurance policies before trying to make money out of their cars.
“It is quite understandable that people want to earn an extra income,” says Vera Nagtegaal, CEO of Hippo.co.za. “However, make sure that you check the terms and conditions of your insurance policy before you do anything else.”
Nagtegaal explains that even something like a car pool could land you in trouble with your insurer. “Should only one person’s car be used and money is involved, the insurer could possibly regard it as a commercial transaction, especially if the money you get is more than the operating costs.”
According to Nagtegaal it could be seen that your car is being used for business purposes and that you should therefore have a different type of insurance cover. “Perhaps you may even need a special permit to sit in the driver’s seat.”
Due to the rising cost of living people are increasingly using their possessions to earn money, such as making their houses available for holiday accommodation on websites like Airbnb. To some people the logical further step is to try and make money out of their car.
However, Nagtegaal warns motorists first to check their insurance policies for any terms in this regard.
Most people are already familiar with transport services such as Uber and Taxify, and now there are also initiatives such as CarTrip and Rent-My-Ride through which you can rent your car out to make money.
“Although the options seem wonderful to people who want to earn a few extra rand, motorists should also look at how it is going to affect their insurance policies.
“A concern such as Rent-My-Ride offers its own liability cover, but car owners should still check with their insurers whether they are running the risk of having no cover under their current policies or should change or upgrade it.”
According to Nagtegaal these initiatives offer exiting new opportunities to people who want to earn extra money. “However, it does not mean that the rules are changing and people should consider the consequences before they tackle something like this.”