Nobody expects to make money parking their cars at an airport when they go on holiday. In fact with an average rate of around £20 a day you’re spending £200 when you leave your car at an airport like Gatwick for a 10-day break.
But one entrepreneur is trying to change all that with Car & Away, a peer-to-peer car rental provider. Andy Hibbert, founder and CEO of Car & Away describes his offering as the ‘Airbnb of cars’ and plans to disrupt the car hire sector by taking on stalwarts Hertz and Avis.
He points out that the concept of private car ownership is broken because cars just sit idle: ‘The average UK car is used just four per cent of the time, at an annual cost to the owner of £5,000 – it’s a painfully inefficient model that our peer-to-peer car sharing service is designed to fundamentally overhaul.’
Car owners can make between £80 to £200 a week through Car & Away depending on the make, model and condition of their cars
With this business model there’s no need for Andy to buy his own fleet of cars to hire out and add to the world’s rapidly increasing stock of one billion cars.
Convinced that there is a smarter way to own and rent cars he went about building a peer-to-peer car sharing community. The business model means he simply capitalises on assets that already exist.
He was aware that the car rental industry suffers a bad reputation, particularly when it comes to service, extra fees and hidden costs.
Andy says: ‘There are hidden charges to car rental. You can see a booked price but by the time you get to the counter the price triples. Simple stuff like an extra driver or satnav will cost extra.
‘The biggest scam is the insurance with the excess waiver which typically maxes out your credit card which you need for your holiday.
‘We have a deposit which is £250 – we block that on the card to cover for congestion charges, speeding fines and damage. We make sure you get the exact car you book and not “similar”.
‘Our service means car renters finally have an alternative to expensive, poor service rental options while owners can earn some cash at the times when they genuinely have no use for their vehicle.’
Andy Hibbert is the founder and CEO of Car & Away which launched with a collaboration with Gatwick Airport back in 2017
Making money while on the beach
Car owners using the scheme get to take 60 per cent of the earnings from the booking. Currently, Car & Away is offered at Gatwick and Bristol airports so car owners can make money when they go away on holiday from these bases.
However, there are plans afoot to expand the business to the rest of the UK as well as overseas to service renters and owners at the likes of Holland’s Schiphol Airport.
Car & Away, meanwhile, take 40 per cent commission including VAT. A flat fee of £39.99 is also charged to the car owner but there are some free extras. A valet is thrown in so the car owner comes back from their holiday to a shiny, clean car.
Andy explains: ‘You will get a free car wash if it’s not rented and sweets for the kids, so it’s a great experience.’
Do I pay tax on my car rental income?
Yes you do. Car & Away advise that you may be able to offset some of your vehicle’s running costs against the income in generates. The amount of tax you pay will all depend on your own tax status and the company recommends you take advice from a professional to determine what you need to pay to the HMRC.
Andy adds: ‘As far as we’re aware the UK government is pioneering the shared economy as the first £1,000 earned in a year is tax free.
‘So when your rental income goes over that you have to include it in your tax return.
‘We create a statement of annual earnings to support tax returns. It will be easy to track.’
Owners can make around £80-£200 a week depending on the size and make of the car.
Andy says that, ‘We send a statement and the cash is in the bank the day after it comes out of our service.’
It is Car & Away that sets the rental price and not the car owner.
The company says that it bases this on using market and seasonality plus the vehicles make, model, features and condition.
Andy says: ‘Smaller cars such as a Fiesta or Polo can get you up to £80 a week while larger SUVs can earn you up to £200 a week.
‘Premium carriers and cars such as Volvos, Range Rovers, Audis and Mercs tend to get more money for owners.’
Car owners can, however, set limits on mileage done per day. It can either be set as unlimited or Car & Away recommends a limit of 250 miles per day.
The model, explains Hibbert, creates winners on all sides. Besides the car owners benefiting, airports can make extra cash too as it allows them to re-sell car parking spaces at peak times.
What happens if there’s an accident?
Car & Away does offer comprehensive insurance in the event of an accident under an Allianz policy which covers the replacement value of a vehicle up to the value of £50,000. It works in parallel with car owners’ existing policies but any claims made during the rental period are made to Car & Away’s policy.
Andy explains: ‘We will fix everything. We have great partners behind the scene. RAC is for recovery. They will fix cars on the roadside and fix 90 per cent of cars.
Car & Away are not the only peer-to-peer car lender in the UK. Andre Haddad, the CEO of Turo, says his company is the world’s biggest peer-to-peer car sharing company (see below)
‘If it needs a bigger repair we’ll work with owner to get that done and sorted. In the event that there is a damage and need to be repaired and this hasn’t happened yet, we will give owner a courtesy car for as long as they need it.
‘Car owners will get an equivalent car to what they have. They won’t, for example, get a small car if they have an SUV.’
Car & Away achieves £3.5m in funding
Car & Away launched in collaboration with London Gatwick Airport in 2017 and recently opened its Bristol service. In July it announced that it has raised £3.5million in investment.
Andy says the funding round will allow Car & Away to develop a pioneering instant-book car-sharing platform, enabling any car owner to rent out their vehicle from their home or parking whenever it is not being used with use of keyless technology.
Which cars qualify for Car & Away?
1. Your car has to be nine years old or younger
2. It must have less than 100,000 miles on the clock
3. It must be comprehensively insured in the UK
4. It may not be a company car UK registered vehicle
5. The replacement value of the car must be no more than £50k
6. The car must not have had any custom modifications
7. The expiry date of vehicle tax and MOT must be more than 30 days away
Andy explains that the tech will enable any car owner to rent out their car at any time. If the car is parked at train station car parks the rental income itself could fund the parking as well as the commute of the owner. However, this part of the service is not available yet.
But with the latest funding round it appears the business has the funds to develop this part of the service. The tech needed to develop the business further costs £750,000.
Andy says this will be used to build apps, front end and integrating technology in cars and building a scalable platform. It will also be used to fund its airport infrastructure.
He adds: ‘It gives us time to run the business for up to two years when it would need the next investment to further our growth. We want to be the leader in peer to peer car sharing.’
The company says that rentals from official airport parking have grown by 35 per cent, while vehicle supply has grown by 30 per cent a month.
Andy says that when the ‘At Home’ model launches car owners could earn around £700 per month from joining the venture.
He explains the model hasn’t taken off for others because of certain barriers. ‘Car & Away will install keyless technology into the car. This is very important because without keyless technology, someone needs to be there to hand over the keys in person.
‘That means if the owner is not available at the times the car could be rented out, renting a car won’t be possible. This is a barrier to car sharing as for owners who work in offices etc., being there in person is obviously not an option.
‘Car & Away need to install the keyless technology so that we take this friction away and build Europe’s first “on demand” peer to peer car sharing platform.
‘On demand means if it’s available you can search for it, find it and book it instantly – walk up to the car and unlock it and start it without needing the owner to be there.
‘At home – the idea is that the car will rent multiple times, up to 50 per year, so every weekend for some people, and they could earn up to £700 per month doing so.’
Car & Away is not the only UK car rental or sharing disruptor.
Turo: It describes itself as the largest peer-to-peer car sharing marketplace, boasting 11 million in its community. Over 400,000 cars are listed on its platform across the US, Canada, Germany and elsewhere.
It has a UK presence and the new service aims to boost its car numbers. There are 140,000 user sign-ups and 7,000 vehicles already listed to share spanning 638 models in the UK.
Drivy: Drivy also enables car renters to unlock your car through an app. Drivers set the price and mileage is capped at 100 miles.
Renters pay more if they go over this limit. Drivy also charges a £3 service fee per trip at renters for using the platform.
Zipcar: Not peer-to-peer but a short-duration car-hire club with a fleet of vans and cars parked in dedicated spots around major cities. You can choose between three price plans: a basic is free, Smart is £6 a month and Plus is £15 a month. It’s offered to renters in major metros like London, Bristol, Cambridge and Oxford.
Rent a car through the Flex (one way service) or the round-trip option, starting from £3 or a daily rate of £33.