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If you're looking to rent out cars to earn money, it's important to have a legally-sound agreement in place first. Read on to find out what to include in your car rental agreement, so that you have peace of mind your company will be protected if anything goes wrong.
A car rental agreement is basically a contract between the owner of a car and a person who hires the vehicle, who is usually the driver. This type of agreement will typically provide a clear description of the vehicle, duration of the hire, the payment terms and what happens if someone damages or misuses the vehicle.
Generally, if you rent out a fleet of cars – either via a dealership or a car-sharing app – you'll want to have a standard agreement in place. In addition to cars, you can also use this type of rental agreement to rent out other types of vehicles that have a vehicle identification number, such as delivery scooters and motorcycles. Just make sure the agreement is customised to reflect the type of vehicle you are renting out.
If you want to rent out a car using a more informal arrangement, for example to a friend or a family member, you may still want to consider using an agreement. That way, if anything goes wrong both the owner and the driver will be protected.
A car rental agreement is a contract between a car owner and an individual who hires the car for a set amount of time. This means at the end of the lease, the driver must return the car to the owner, unless the agreement allows the driver to buy the car at the end of the lease.
A car loan agreement is used when you purchase a car and need to borrow money in order to fund the purchase. It is used to formalise a personal loan for a new or used car. Under this type of agreement, the borrower has to repay the loan and interest over a fixed period of time.
A car rental agreement will typically be amended to suit your specific circumstances. It can also include optional terms in case the driver wants to buy the car or extend the rental period.
A car rental agreement is a binding legal contract. This means if the car owner fails to meet the requirements of the agreement – for example, by renting out a car that is not roadworthy or by damaging the car – the other party can take action through the court system. As well as protecting or eliminating your own liability, you'll be potentially able to make legal claims if an agreement is broken by the driver.
That's your call to make. Many legal services provide a template that you can customise to suit your particular situation. You may choose to use a car rental agreement template, make any necessary edits and then have it reviewed by a lawyer to make sure it's legally sound. This can help to make sure the agreement does not impose any incorrect or unfair terms and that it's otherwise legally compliant.
Some car rental agreements are also subject to the National Consumer Credit Protection Act. This means the agreement needs to be carefully reviewed by a lawyer to make sure it meets the required legal standards.
You can prepare a car rental agreement by including the key information about the car(s). This usually includes:
You will also need to include the details of the person who is hiring the vehicle, who is usually the driver. If more than one person want to hire the car together, you can include multiple parties.
Here's some more information on the options you have when drafting a car rental agreement: