What it costs to own a car for rideshare

Thinking about joining the booming rideshare industry and becoming your own boss? It's an exciting venture, offering flexibility and the potential to earn great money. But before you take the wheel of your driving career, it's crucial to understand the real costs involved in buying and owning a rideshare car.

This guide will walk you through all the expenses and hidden costs you need to consider to make an informed decision, so that from the choosing & buying experience, to when you’re on the road there are no surprises and it’s smooth driving all the way.

Costs you need to consider in buying and owning a vehicle for rideshare

The upfront cost of the car

The first, and most obvious expense when buying a rideshare car is the upfront cost of the vehicle. This includes the price of the car itself, taxes, and any dealership fees.

No ordinary car

When buying for rideshare, the initial outlay can be significant. After all, this isn’t just a runaround for weekends or driving to work and sitting in car parks – it’s an earning machine that’s on the road constantly and needs to please customers by being safer, cleaner, more reliable and (for today’s eco-conscious) also greener. To that end, if you're looking at newer models that offer better reliability and fuel efficiency – or the latest Electric Vehicles – they tend to be premium vehicles with higher price tags..

For example, a coveted EV for rideshare is the Tesla Model Y with a retail driveaway price (RRP + on road costs such as dealer delivery, stamp duty, licence plates and registration) starting from just over $60,000. Petrol Electric hybrids like the Toyota Camry Hybrid are a more affordable option, with driveaway retail pricing around $46,000 – just to give you an idea of the numbers involved.

Right for rideshare

Choosing the right car for ridesharing is crucial. It should be comfortable for passengers, have ample space, be fuel-efficient, and have a good reputation for reliability. Many rideshare drivers opt for vehicles known for their dependability and low running costs. Many too, are considering the ongoing benefits of purchasing an Electric Vehicle, which can save the average driver $6750 per year on fuel costs compared to driving a petrol-powered car – and help them stay utilised as today’s eco-conscious consumer books them more and more.

The cost of finance

Cars are expensive items, and most people need finance to purchase them – rideshare drivers included.

Interest rates and fees

Finance, like any other loan comes with an interest rate and a range of fine-print including fees for everything from missing payments to paying off your loan earlier than arranged. It can also be hard for rideshare drivers to get finance. The lack of a consistent PAYG paycheck can sometimes put finance companies off, and even if they do agree to loan you money for a car, they will often charge a higher interest rate to compensate for the added risk they perceive in loaning a rideshare driver money for a vehicle.

The dreaded Balloon payment

Most car financing agreements include a balloon payment at the end of the term, which is a large lump sum you need to pay to own the car outright. While this can reduce the weekly repayment figure, this lump sum can be risky, especially for rideshare drivers. The high mileage typical for rideshared driving can reduce the car's resale value, leaving you with a car worth less than the payment due at the end of the term.

Ongoing running costs

For rideshare drivers who drive their vehicles day in, day out, ongoing running costs are even more of a consideration than with ordinary driving.

Rideshare insurance

Car insurance is a must for any driver, but rideshare drivers require specialised coverage. Standard policies often don't cover rideshare activities, which can leave drivers vulnerable. If you don't have the right kind of cover and you have an accident while you are driving a rideshare customer your insurance is likely not to pay. With your car being your livelihood, it’s also crucial to ensure policies include a replacement car if the unfortunate happens, so you’re quickly back on the road and earning without significant interruption.

Maintenance & servicing

With their heavy use, when it comes to rideshare cars, maintenance and servicing costs can be significant – tyres and brakes wear out sooner and safety couldn’t be more paramount to customers’ welfare and happiness with their ride. High mileage is also common for rideshare vehicles, meaning you'll need more frequent servicing than the average car, so factor these costs into your budget.

Registration and CTP

Once you have your car and insurance sorted, you'll need to register it for rideshare use. Registration fees vary by state and vehicle type. Compulsory Third Party (CTP) insurance is often bundled with registration, covering personal injury liabilities. Keep track of registration renewal dates to avoid penalties. Some states offer discounts for energy-efficient vehicles, so consider this if you're choosing a new car.

Fuel costs

Due to the serious kms a rideshare driver drives, fuel costs can be larger than average and a major consideration in your overall driving profitability.

One way to eliminate them completely, is to make the car you purchase an Electric Vehicle which can reduce the costs to power your vehicle by around 68%!

How Splend can help with the cost of owning a rideshare vehicle

Because Splend specialises in rideshare vehicles (we don't do anything else!) we understand the unique challenges faced by rideshare drivers. Our vehicle prices combine discounted purchase prices and low rates - for new EVs our equivalent APR is 0% – and we bundle these up with other ownership costs so that owning with Splend is not only cheaper but easier as well.

With Splend's Flexi Own plans, one weekly payment covers not just paying down the car but also maintenance, rideshare insurance, registration and CTP insurance – all included. With Splend, you don't need to worry about finding special car insurance for Uber drivers or organising a rental if your car is damaged as your comprehensive coverage ensures that if the unfortunate happens, you’re quickly back on the road with a courtesy car while your car is fixed.

And as for that dreaded Balloon payment? With Splend, there isn’t one! At the end of the term Splend can transfer ownership of your vehicle to you for just $1.

It’s smooth driving, with no surprises and the lowest total ownership cost you’ll find – which is how car ownership for rideshare drivers should be.