How to make $15,000 a month sharing your cars

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Cameron Gowing, a semi-retired motoring executive, doesn’t like to see cars sitting around.

So last July he decided to rent out his 2014 BMW X5, hoping it would make him $10,000 in the first year and save him the trouble of seeing it idle in his Cairns driveway.

But within weeks he found it was constantly rented, for days at a time, at whatever price he seemed to set.

“It left me a bit short actually, I had to ride my bicycle everywhere because I had no way of getting around,” he says.

But the consistent demand sparked an idea, and almost a year later Gowing is now buying a used car on Facebook marketplace every one-and-a-half weeks to expand his car rental business.

There are now 40 cars on his books, comfortably netting Gowing $15,000 a month, or an average of $1500 a car.

“I keep an eye on what the car rental companies are charging, and I adjust my prices in real time,” he says.

“It takes about four to five months to recover the purchase price for each car, and because it’s all on the web, I rarely interact with customers themselves, only when they need something specific.”

Fleet management software

Among the many market oddities thrown up by the pandemic, rental cars have become both elusive and prohibitively expensive.

Renting a car from a big player in Cairns this school holidays is likely to set you back $150 a day, as companies scramble to build back their fleets after widespread stock liquidations during COVID-19.

Gowing is one of a growing number of people using the fleet management software from CarNextDoor.com.au to take advantage of the market, renting cars from between $25 to $150 a day.

When Sydney-based Steve Connolly, who works in the yachting industry, listed his eight-year-old Audi A3 on the platform, he estimated it would make him $2000 a year, covering its expenses.

“In the end, it was closer to $13,000, making it a viable business in itself,” he says.

Connolly quickly bought more cars, and now rents six shared vehicles on the platform, returning him more than $80,000 annually.

It was the same story for Glenda Hamilton in Tasmania, whose 2010 BMW X5 was solidly booked out due to the dire shortage of hire cars. Hamilton now rents three more vehicles: two Cherokee Jeeps and a 2000 Mazda MX5 convertible.

Seeing the entrepreneurial car-sharing wave on the platform, Car Next Door chief executive and founder Will Davies began redesigning the software to better help users manage multiple cars.

“It allows individual players, or entrepreneurial car sharers to run a fleet of cars, much like a rental service, but at a fraction of the cost,” Mr Davies says.

When international and domestic tourism ground to a halt at the start of the pandemic, the panicked hire car industry sold off much of its fleet to stay in business.

Thrifty, ranked in the top three for market share, slashed its fleet by 40 per cent, with some major players even cutting back 80 per cent of their cars.

But as domestic tourism rebounded quicker than expected, rental car companies struggled to buy enough new replacement vehicles, due to disruptions in the global supply chain.

“As soon as regional travel picked up again, everyone was trying to book cars and not able to get any,” says Mr Davies.

Gowing, who has progressively reinvested about $150,000 into his Cairns car rental business over the past 12 months, now spends four to five hours a day maintaining and cleaning the fleet, which has quickly become one of the biggest in the city.

“Fortunately, I developed the skills to do this at 17,” he says. “I’ve always liked maintaining and keeping cars.”

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