Money Hack: How to pay off your car loan quicker
Earn money with your car when you're not using it and get your loan repaid faster.
If you're like me, your car is not being used for the majority of the week. It's either sitting parked in your garage or your driveway or just in the street, and while you're not using it, you still need to pay for your insurance and your car loan. So why not make your car work a little harder to help you cover those ongoing costs?
The hack
Sign up to a platform such as Car Next Door where you can rent your car out while you're not using it. The extra money you make renting out your vehicle can be put towards your car loan, helping you to pay it off faster.
The amount you'll actually make renting out your vehicle will depend on your vehicle, the area you live and a few other factors. However, according to a Car Next Door rep, the average established car owner earns $350 a month and top owners earn over $7,500 a year.
Car loan repayments tend to be within the $300-$800 a month range, so you could be adding a decent percentage of the repayment extra each month by renting out your vehicle.
There are a few points to consider before employing this strategy though. First, not every vehicle is eligible so you'll need to check you can list your vehicle before you start making plans about extra repayments.
Also, make sure your loan allows additional repayments and there are no fees to do this. You should also check whether there are restrictions as to how much extra you can repay per year or if you will be charged a penalty for repaying your loan early.
If your car doesn't allow additional repayments and you still have a decent amount of time left on your loan term, you may want to check out if refinancing your car loan will be worth it.
Car sharing differs depending on the platform, but generally, car borrowers are screened and your car will be insured. There are various pricing structures in place so make sure you do some research to find the one that works best for you.
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