I own a 97 jeep grand cherokee. It’s a quintessential clunker with $93,000 miles. I rarely use, mainly when I take my dogs somewhere or need to haul something. (My other car is an Audi TT.) My neighbor wants to rent it. He’s going to pay the insurance. I’m taking care of the maintenance. I can still use it when I need it, which is rarely. What’s a reasonable amount to charge him per mile.
This may void your insurance policy. Check with them first. Find out what rental companies charge then divide by 2 or 3. It would be simpler just to sell it to him and buy it back later.
Twotone
If you want to remain a good neighbor, I would not rent this vehicle to him. He will likely, without being reckless, cause some serious repair, and you will feel bad.
I would offer to sell it to him, with FULL DISCLOSURE. That way you will remain good friends.
I agree; you’re not in the rental car business and can’t absorb repairs. Even if he pays the insurance, a claim goes on your record if it’s in your name
I like both TT’s and Doc’s recommendations. CYA as much as possible
I’ve done something kind of like this (although it was on an old Plymouth Voyager, so it was even more worthless than your Jeep). They paid the insurance and paid for maintenance and in return I had a van I could borrow and didn’t have to park. After a year or so I ended up just signing it over to my friend.
So my advice to you is don’t charge him anything-- it’s not like the car is going to depreciate much because he’s driving it and having him drive it around is actually probably better for it than just letting it sit. Since you won’t have to pay for insurance or periodic maintenance, but will still get the benefit of the car’s occasional use, I think the arrangement is more than fair with no rental fee.
Also, a word about the insurance. You’ll have to have your neighbor insure the car in his name. Liability insurance (which I’m assuming is all you’ve got on this old jalopie) will pay out if someone you let drive your car gets injured, and so it would be fraudulent for you to still be the named driver when he’s doing 90% of the driving.
Yeah, I agree to “sell” the car to him and let him assume the ownership and all it entails, offer to rent it from him for so much a mile. You’re the one that needs it less. Now he’ll be the one posting the question…
Check with your insurance company on this. Many states auto insurance is on the car under the OWNERS name. I seriously doubt your neighbor can get insurance on a car YOU own. And lets say he does…and you rent him the truck…then 2 months later he DROPS the insurance without telling you…THEN gets into an accident (HIS FAULT)…Want to take a wild guess who’s going to have to pay for it???
This is NOT a good idea.
Thank you all for your responses. There is some pertinent information I neglected to include. I’ll expand now and would appreciate whether it affects your advice.
I describe the Jeep as a clunker. Fair condition. To be more specific, the condition of it’s body is about what you’d expect from a 13-yr-old car that’s never been in a wreck. The leather seats have a couple of rips in front. The car is comfortable. It has various squeaks, sometimes you have to gun it when you change gears, but there it has no mechanical problems serious enough to make it unsafe. A couple of years ago I made a 750-mile round trip without incident. Since then, I’ve only put about $6 or 7K. Farthest trip was about 150 miles round trip, also w/o incident. Blue book private party value is $4150. CARMAX offered me $2700.
RE: The insurance. As unwise as it may be, “technically,” I have sold my neighbor (Robert) an interest in the call. He paid me $1, and I added him as a co-title holder. He pays the insurance. And, while it may seem silly, the Jeep has full coverage (collision, comprehensive, etc.). Robert wanted to buy the vehicle, but I was unwilling to sell it, for the same reason it’s fully covered. While don’t use it very much, it is very useful to me. When I need it, I REALLY need it. I couldn’t get along without it. (Think of the limitations of a two-seater for a divorced man with a house, a yard to maintain, two dogs and a 16-year-old son who lives in the same town and spends some time [not enough] with me. Robert says his primary use of the car is to transport his daughter to and from school (3-mile round trip) and/or for her to drive it to school and park it there during school hours. He also wants it for occasional use around town when his stay-at-home wife/mother is using one of their two cars and one of his two kids are using the other one. He’s emphasized that he’ll not be using it much more than that (and certainly not for out-of-town trips). What I have to lose in our arrangement is: (1) when his daughter drives it to school, it will be parked there for 7 hours; when she doesn’t; (2) it will be parked at his house [we both work out of our homes, are in business for ourselves and almost NEVER go out of town on business, but I’ll need to knock on his door and let him know [not for permission, just so as not to inconvenience him] when I need it for this or that; (3) to give him as much advance notice as reasonable if I need it for an extended period of time [let’s say half a day; conversely, he needs to let me know if he needs it extensively for more than a day or so]). Robert has been a good next-door neighbor for 12 years. If for some reason I want to take his name off the title (and pay the insurance, of course), At first I was thinking of charging him a flat monthly fee, but now I’m thinking in terms of a per/mile fee. If he uses it the way he’s said he would, that would be 60 miles a month for school transportation plus the occasional around-town errands, etc. (let’s call that another 60. So, hypothetically, he’d using it for 120 miles/per month.
If this additional info changes your opinion, I’d appreciate your letting me know what to charge him. Thanks a lot.
Ransom
I still think this is NOT a wise decision. Doesn’t matter what kind of insurance the car has. If he gets into an accident and heaven-forbid KILLS someone YOU CAN BE HELD LIABLE…NO-IF-AND-OR-BUTS. You better very good insurance or not much is assets. You own a house or have any bank account…you can expect to loose them in a lawsuit if your insurance isn’t high enough.
The neighbor is paying the insurance. That’s one significant car expense.
Next is gas, at 14 miles per gallon and $2.50 a gallon for regular you are talking about $0.17 a mile, so round that up to 20 cents a mile.
Next and hardest to predict is repair expenses. Are you going to fix it yourself, or go 50/50 on repairs and maintenance? If you spend $600 in a year, that’s $50 a month divided by 120 miles estimated for his use; that’s $0.40 a mile.
So, $0.60 a mile for gas and repairs. It is very easy to spend way over $600 on a repair so the rest of the maintenance is on you.
WOW. All of your responses have been good ways of looking at this issue. And, I can hardly believe how quick you’ve been with them.
to TWOTONE: There’s no problem with the insurance policy. It’s already in my neighbor’s name. My insurance company is aware of this. They’d rather not lose the business, but there’s no problem from an insurance perspective. The title is in both my neighbor’s and my name. I will check with the rental companies. Ownership: Technically it’s ours, but effectively it’s mine. When I’m ready to change the title back to my name only, I have no doubt that that won’t be an issue. His wife would kill him. We’ve been good neighbors for 12 yrs.
to DAGOSA: If I were to sell it to my neighbor, and he were to ask this forum the same question, as you suggest, and he were to ask you what to charge me under the same scenario, what would you say?
to MIKEinNH: I can’t say I disagree with you about the wisdom, and I appreciate your advice. But, suppose I were to rent it anyhow. Both my name and my neighbor’s are on the title. The insurance company and the DMV say that everything is legal and nothing is improper. BTW, an old college friend owns a vacation home on Northwood Lake in southern NH, about halfway between Manchester and Portsmouth. I live in North Carolina, but I’ve still spent a week or so 28 or 29 of the last 34 years.
to UNCLETURBO: My neighbor pays the insurance and the gas. (I’ll reimburse him if I use more than a gallon or so. We split oil changes 50/50. Repairs, tires, etc. I pay 100%.
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KEEP THE SUGGESTIONS COMING, FOLKS. I’m taking notes and will let you know what I decide. I’ve got a rough figure in mind, but I don’t want that to influence your opinions.
to MIKEinNH: I can’t say I disagree with you about the wisdom, and I appreciate your advice. But, suppose I were to rent it anyhow. Both my name and my neighbor’s are on the title. The insurance company and the DMV say that everything is legal and nothing is improper. What’s a fair per mile fee, if you have one.
BTW, an old college friend owns a vacation home on Northwood Lake in southern NH, about halfway between Manchester and Portsmouth. I live in North Carolina, but I’ve still spent a week or so 28 or 29 of the last 34 years.
to DAGOSA: If I were to sell it to my neighbor, and he were to ask this forum the same question, as you suggest, and he were to ask you what to charge me under the same scenario, what would you say?
The difference, is you rarely need it, and he needs it regularly. I’d tell him to refuse and not rent you the car, he’s not in the rental business. If he wants to loan you the car for nothing as a friend, that’s fine, but take your car to use in the meantime. I don’t believe in doing business with cars w/o being in a formal business; if that make’s sense. Sorry for the cruelty.
I agree with this. There is a major difference between letting a friend borrow a car and actually having a formal rental arrangement. I am obviously not a lawyer, but I would think there are probably some legal consequences as well, both in terms of local laws governing rental agencies and in terms of your exposure to liability (i.e. what happens if he hurts himself in it?). Realistically, you should probably consult an attorney to make sure you’re not opening yourself up to trouble, but that seems completely absurd for how little money this thing is worth.
Again, I suggest you make it a friendly informal arangement (in which no money changes hands) or just sell him the car. Given your friendly neighborly history, I’d say the risk of him not letting you use the car after you sell it to him with that understanding is a lot less than risking something happening while you’re renting it to him.
With the new info I wouldn’t charge him anything per mile, he already is paying for insurance, gas, and 50% of oil changes. Since he is using the vehicle much more than you and is more dependent on the vehicle than you, and parking it at his place not yours - my question is why are you paying for 100% of tires and repairs? The party using the car most should pay for most of the repairs. I’d recommend changing this part of the arrangement.
Someday when you haven’t used the Jeep for a couple of weeks you’ll get a call that the alternator is shot and it is $400 for a new one. How do you feel about the $400 being on you when after the car is running again it just goes back to his driveway? If he is using the Jeep 70% of the time, 70% of the repairs are on him. You are leaving yourself open to some big repair expenses.
Otherwise it seems OK as long as you feel you are happy.
I agree with Mike; this is a very unwise decision. The US is the world’s most litigatious country, and any problem with an unsure outcome will eat up lawyer’s fees and could stick you with a horrendous liability.
I would get out of this arrangement PRONTO!!
Otherwise it seems OK as long as you feel you are happy.
Are we seeing a different side of UncleTurbo ? 
Baseball spring training, brings out the “happy” in me.
Wish I were there…go Sox, beat NY when it doesn’t count.