Is it Smart to Lease a Car for Rideshare or Deliveries?

Whether you should lease or rent a car for gig app work comes down to whether you can make a profit and how much risk you’re taking on.

Personal Car Rentals

Just walking into a rental car agency and renting a car like you’re going on vacation or your car’s in the shop is probably a bad idea. Most rental agreements don’t allow rideshare, deliveries, or similar types of work.

While you can probably get away with using a rental car for gig work, there can be big consequences if something happens. If something happens to the car, you may not be covered by insurance — even if you bought the rental car coverage.

Some rentals also have mileage limits, and you may get charged steep fees for excessive miles.

Personal Car Leases

Personal car leases often don’t have as many restrictions are rental cars. You can usually do what you want with the car.

The big thing to watch out for is the mileage limit. Most rideshare and delivery drivers drive far more than the average commuter. That could lead to big overage charges when you turn the car in.

You also need to maintain the right insurance coverage. That will often mean getting a gig economy endorsement on your auto insurance policy.

Gig Economy Car Rentals

Some rental car companies have rental specifically for gig economy drivers. This includes both mainstream rental car brands and specialized companies focusing only on gig economy drivers.

In the short-term, the math is easy. Figure out how much you can make in a week versus how much it costs to rent the car.

Know that there’s a chance that you might make less in some weeks, but you may make up for it in other weeks.

The main thing to watch out for is that it’s harder to predict what can happen in the future. Your earnings could go down when rates increase, leaving you looking for a new way of getting a car or new work.

Gig Economy Car Leases

Gig economy car leases also start as a simple math problem of earnings versus expenses.

The problem with these leases is that they usually lock you in. You could face expensive break fees if:

  • Your earnings drop and you’re no longer making a profit with this arrangement
  • You want to move to a different type of work

You’ll also need to account for the fact that you may want to take off time for vacations or sick days but will still have to pay for the lease during that time. So you’ll want to earn a little more to cover this during the weeks you’re working.

If you’re thinking about doing a lease, think about:

  • How hard is it to get out?
  • How hard are you locked in for?
  • What maintenance and repairs are you responsible for?
  • Are there potential charges at the end like excessive miles, damage, or wear and tear?
  • What insurance will you need?
  • How predicatable are your future earnings? Does the platform you’re considering have a history of cutting rates?

There’s no one-size-fits-all answer on whether it’s smart to lease or rent a car to do gig economy work. You have to carefully study what you can make in your area and then do the math on the specific program you’re considering. Think about both short-term income versus expenses as well as any risks you’re taking on by being locked into an agreement.

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