How to Price Your Car Share Vehicle

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How to Price Your Car Share Vehicle

Pricing of peer to peer car sharing is tricky if you’re new to the game. There is a range of different considerations including location, demand, and competition, among others.

When you list on Yourdrive, one of your aims is most likely to make money by renting out your car. It is a balance between pricing too high - not getting any rental requests, and pricing too low and not covering the running costs.

Here are some factors to consider when deciding on how to price your car:

Location

If you're further out of the city, consider pricing your car slightly lower in order to attract people from further afield. People will be willing to travel to your car if the price is right. 

What else can I do if I’m not located near the centre?  

You can offer to bring the car into the city or meet them near the bus or train stop. Showing that you’re willing to make arrangements or meet the renter half way will encourage people to hire your car even if you’re further out of the city. You can add this to your vehicle description saying that ‘pickup and drop off can be arranged’.

Airport pickup and drop-off

For people near the airport, or just looking to get more rentals, offering airport pickup and drop off is a very powerful way to attract renters. Some of our owners are offering airport pickup and drop off by arrangement for an additional fee. This is perfectly OK with us as long as it is clearly communicated with the renter and the fee is agreed on beforehand.

Demand

Pricing will also affect the demand of your vehicle, so if you’re only after a few rentals a year you can keep your prices higher. However, if you haven’t yet reached the demand you were hoping for, try reducing your prices to encourage more people to rent out your car.

Competition

Competition comes in several forms: other cars on YourDrive, other rental car services and of course, public transport. The most important competition to consider is from other car hire companies. Rental car companies are the most visible to people considering where to hire a car from.

Rental car companies prices fluctuate depending on season and demand so it can be difficult to compare but prices are usually around $40 for budget cars, $60 per day for small hatches and $80 for larger sedans. Trucks, vans and 4x4 or 4wd vehicles are usually $80-120 per day.

In order to be competitive with these prices, you would ideally like to be at least 20-30% lower in price.

Seasonality

Rental cars change price considerably from summer to winter because of the seasonality of the industry. There is much lower demand for rental cars during winter, so prices are hugely discounted and can be up to three times less than during peak summer periods.

So consider setting lower price over winter to keep up the demand for your car. (See our blog on seasonality

The Actual Numbers ($50 vs $49)

The actual price number is also important in the psychology of the sale. As you will have noticed everywhere from your local supermarket to buying a new car, prices are hardly ever represented as a whole round number. So try avoiding pricing your car at $50 per day, instead list it for $49 per day and it will look more appealing to prospective renters. 

How booking fees are calculated

The booking fee is calculated as the lowest price for the combined number of hours and days that make up the rental period, minus any promo code discounts of long hire discounts. For example, if a car costs $10 per hour and $40 per day, the daily price ($40) will be charged for any booking longer than 4 hours but less than 24 hours, as our daily price is based on a 24h period. 

Length of hire discounts are automatically applied to bookings that exceed 5 days in length. For more information about long hire discounts, please see our 'What are the long hire discounts?' FAQ. 


Posted by Andrew Norman on 10th of June, 2016