Car Finance - PCP Sharing Lease

Anders_Theet

Hi all
Came across a company called carmi.co yesterday. Had a chat with them and they sell cars on special PCP leases that allow you to rent the car out on airbnb-like sites for cars like hiya car, ridelink and easy car club, so that you can make money from renting the car out.

I am however not sure about their claim that you cannot rent your car out on a normal PCP lease the same way. Does anyone have any insights into if you are actually allowed to rent your car on a "normal" PCP lease?

Nearlyold

A normal HP, PCP, will not usually allow use for "hire and reward" such as renting out, taxiing, chauffeuring etc. I have known cases of the finance company taking the vehicle back in such circumstances.

Anders_Theet

@Nearlyold, thanks a lot for your answer. It is a bit surprising I must admit. Do you know why finance companies do not allow it? Also do you know how Carmi are able to do it if no one else is doing it?

Nearlyold

Its not that no one else is doing it, of course you can get finance for taxis, rental cars etc but its priced accordingly to reflect the risk.

One of the reasons that "normal" consumer lenders don't like it is because such vehicles tend to do a higher mileage, the cars are often outside the control of the borrower and what they particularly don't want is the risk of a Voluntary Termination once the borrower has paid 50% of the total payable with the car coming back with a monster mileage - losing the lender a shedload of money.

Anders_Theet

Alright, so a bit of news after having spoken to Carmi again. With regards to milage, they have given me an offer on a car with 15000 miles a year included. I do maybe 6000-7000, so there should be plenty of milage left for renting it out. Also they offered me a lower milage at a slightly lower price, but the difference from that to 15000 was only £12 a month, so figure I might as well take the slightly larger one.
They told me that there is no extra charge on the lease itself, it works like any other PCP lease otherwise.

They also explained to me in detail how it works, so the car is sold through a big dealer on a carmi finance lease underwritten by a big finance house. When I get the car, it'll be put on sharing platforms and I can rent it out whenever I don't need it. In terms of the safety, it seems that I and whoever rents the car will be insured fully through the platform that the rental is facilitated by.

Does anyone else have experience with Carmi, or any similar concepts?

fwor

Anders_Theet wrote: »

In terms of the safety, it seems that I and whoever rents the car will be insured fully through the platform that the rental is facilitated by.

Not so much a matter of safety but (for most people anyway) a matter of legality. There's not much point in hiring your car out to random people unless they are insured to drive it.

It's a bit odd that you use the word "seems" here, though. Is insurance for you and hirers bundled into the cost or not? I would expect that to make it very expensive, given that they would have to assume the worst about any random person who might want to hire your car?

Anders_Theet

@fwor, good point. As I understood it was included, but would def need to get a clear understanding before proceeding.

jonesMUFCforever

I was going to ask about the insurance - is it included in the lease or do you have to insure it yourself.
If you have to sort out the insurance you could find yourself un-insurable.

Anders_Theet

Ok, spoke to the guys at Carmi again about the insurance part. Insurance is completely covered by the platform where you rent your car out. Carmi directed me to Linkshare and Hiya car, where the insurance part is described in detail, insured by Allianz. Both driver and owner are insured by this and it doesn't affect your car insurance otherwise-

jonesMUFCforever

To be honest I would not touch this with a barge-pole.

forgotmyname

So your going to get a new car on a lease and then allow strangers to go and thrash the living daylights out of it?

Check the insurance, you will need your own policy. Their insurance covers the drivers renting your car. But who pays out when there is a dispute?

Rather lacking on details on their example. £150 lease on a Fiesta owner made £26. woopee. How much time was it spent available or being used by someone else?
£26 to push you closer to the next service when you find the brakes and clutch all shot. All wear and tear sir so payup.

I wonder how your insurance will view it? Giving your keys to strangers. What if one of them clones your key?