To work out your earnings after expenses, and so understand the true financial benefit from renting your car out, you'll need to subtract your car's running costs from your share of trip earnings.
We can't include this in your invoice, because each type of car has different running costs. However, it's easy to work it out yourself.
Step 1: Find your share of trip earnings and kilometres driven
To work out your profit, start by finding, on your monthly invoice:
- Your share of trip earnings; and
- The number of kilometres driven by borrowers.
Your share of trip earnings is at the top of the first page. This is your share of all of the time and distance income that your car has earned in the invoice month. It's the most important figure to look at on your invoice (rather than 'closing balance').
Borrower kilometres is on the second page (if you have more than one car listed, each car has its own breakdown on your invoice).
Step 2: Work out your car's running costs per kilometre
The other number you need for your calculation is the cost of driving your car for a kilometre.
- The simplest way is to look up your car type in one of the car running cost guides online, such as the RAC running costs guide for 2023 (PDF).
- Look at the running costs only (from page 7 of the RACQ document). These are the costs that vary with your car's usage: fuel, tyres and servicing.
- You may need to pick a car that's similar to yours if you can't find your exact make and model. For example:
|Small, e.g Suzuki Swifit
|Medium, e.g. Toyota Corolla
|Large, e.g. Nissan Pathfinder
If you're really keen, you could also do this by keeping your own record of everything you spend on fuel, tyres and servicing over a year (making sure to spread the cost of any parts over their expected lifespan) and recording the total kilometres driven over that period.
Step 3: Subtract your running costs from your share of trip earnings
Now, just multiply (distance driven) x (running cost per kilometre) and take that off your share of trip earnings to get your total profit.
Let's try an example.
|Owner's share of trip earnings
Multiply the distance by the running cost:
(1,811km x 0.14c/km) = $253.54
Now subtract this from the owner's share of trip earnings:
$752.75 - $253.54 = $499.21
The result is the total profit.
So $499.21 would be the owner's total profit in this example.
Why can't I just look at what gets deposited into my bank account?
Your 'Closing Balance' is the amount that goes into your bank account, but it isn't your profit. This is because your personal costs (which may include tolls and trips taken in other cars) are already taken out; and because it includes all the fuel charges, which may be higher or lower than the cost of fuel used by borrowers. See how borrowers pay for the fuel they use.