One of the things people love about our marketplace is the range and variety of cars available. Car owners are earning an income sharing everything from a single Yaris in Melbourne to an MX-5 (and five other cars) in Sydney. Reliable second-hand cars, vans or utes with low purchase and running costs are likely to bring a good return on expenditure over time.
What to look for when buying a car for sharing
Whether you’re looking to purchase a single car share vehicle or want to kick-start your car share business with a fleet, the cars that are most profitable:
- have relatively low purchase costs
- have relatively low running costs
- are appealing to borrowers and get steady bookings.
When looking to purchase, think about where your vehicle will be located and what borrowers in that area might be attracted to.
Many borrowers are looking for a fuel-efficient, automatic car that'll get them from A to B with no hassles. These cars generally have low to medium daily rates and get booked frequently, meaning you’re getting a constant return on your investment.
If a little luxe is more your style, convertibles and prestige cars (below our maximum market value threshold) command higher prices and are chosen by borrowers for a special trip or holiday. Whilst they may not get booked as frequently, borrowers are prepared to pay a premium for a unique vehicle.
Utility vehicles like people movers, utes and vans are popular with many borrowers as they need to use them now and then even if they already own a car of their own. They have high utilisation and frequent bookings compared with other car types. This can mean that you spend more time checking trip photos and communicating with borrowers, but having a well-set-up profile and instructions and a good system for checking your car photos will reduce your effort.
The more reliable your cars, the less you’ll be spending on repairs and the more time your car will be on the road working hard for you. Common makes and models are often significantly less expensive to service and will cost less in spare parts.
Look for cars:
- that have been well maintained, with full service records
- of a make and model that has a reputation for reliability and low servicing costs
- that are likely to be easy to source spare parts for - the more common the car, the easier it is to get spares
Newer cars, whilst more expensive, may give you extra peace of mind if they are still covered by a manufacturer's warranty.
If you’re a budding social entrepreneur and intend to make a profit, a simple strategy is to choose a car that's already experienced much of its depreciation, won't cost too much to run and service (remember, you need to pay for fuel and servicing out of your per-kilometre income) but is still in good condition, attractive and appealing to borrowers.
Read about the $4,000 Toyota Yaris that's earned over $37,000
That said, plenty of owners are running successful car-share businesses with brand new cars (like this entrepreneurial 24-year old student in Tasmania) or speciality cars like convertibles or people-movers. We provide the platform, and you provide the local knowledge, creativity and business smarts to make your own enterprise successful.
Do the maths and make sure you understand your car's running costs (fuel, servicing, tyres and batteries) so that you can set the right distance rate.
Make sure you talk to your accountant and claim all of the available tax deductions. It may be that the tax deductions available for depreciation make it more attractive for you to invest in a more expensive car.
After five years, Steve says he’s discovered his perfect car for sharing: a 5- to 8-year-old VW golf TDI or the equivalent Audi or Mazda. Based on maintenance and repair costs and borrower preference, these are the vehicles that provide Steve with the highest returns and the least hassles.
Steve started his car share business listing an eight-year-old Audi A3, which sits around the $9,000 to $15,000 mark on the second-hand car market. A crowd favourite for more than three years, it’s now done close to 500 trips and earned over $26,000.
Other pro owners have different strategies for growing their fleet. Some will always buy 10-year old Japanese hatchbacks under $10,000, and others look for reliable vans with 200,000+ km on the odometer that has already depreciated but still has a long useful life ahead of them.
If you've got an entrepreneurial mindset, you're sure to come up with a smart strategy for your own car sharing fleet.
Other resources you may find useful