You choose your car's distance rate from three options: 21c, 33, or 45c per kilometre. Car Next Door takes a commission of 8c per kilometre and you keep the rest, to cover fuel and other running costs from Borrowers' driving.
You can set both time rates and distance rates for your car.
The distance rate is intended to cover your car’s running costs for driving during Borrowers' bookings: fuel, tyres and servicing.
The Car Next Door community has all sorts of different cars, from zippy little city cars to big workhorse vans. To reflect the range of running costs, there are three distance rates to choose from for your car:
|Rate||Your share||Car Next Door share|
Running costs explained
'Running costs' are the costs that vary with the distance your car travels:
These are separate from 'standing costs', which are the costs you pay even if your car sits in the garage, such as registration, insurance, finance costs and depreciation.
If you’re doing your research online you will see that some guides use the term ‘running costs’ to include all of the costs of owning and operating a car (including standing costs), so it’s important to check what costs they are referring to.
Working out your car's running costs
There are a few ways to understand your car’s running costs per kilometre:
- If you love spreadsheets, you can record all of your car’s actual costs over a year and then divide the total by the number of kilometres driven.
- If number-crunching is not your idea of a good time, you can get a pretty good estimate by checking out similar cars in a car running cost guide online, such as the RACQ’s annual running cost guide. We like this one because of its detailed breakdown of costs.
- If you just want a ballpark idea, here are the average costs for different car types from the RACQ’s 2018 running cost guide, based on a fuel price of 137.5c/litre. The guide doesn't cover vans, so we've estimated the typical running cost for a van.
Running costs can vary widely, even among cars of the same type and for the same car over time, depending on things like fuel prices, driving conditions, maintenance, the car’s age, transmission and engine type and the price you pay for tyres and servicing.
This means that your car’s actual running costs will vary over time, and won’t exactly match the distance income.
Choosing the right distance rate for your car
This is perfect for cars with low running costs - typically smaller, lighter cars with good fuel efficiency.
Low per-kilometre rates will appeal to Borrowers who want to take longer trips. While the distance income may be lower, you may earn more overall as your car picks up more multi-day bookings and time income.
|33c/km||25c/km||The mid-tier is a good choice for a wide range of cars, as most typical passenger cars' running costs will be less than 25 cents per kilometre.|
This tier generally suits larger and more fuel-hungry cars, like vans, large SUVs or people movers.
Some small cars may also suit the higher distance tier - for example, a small sporty convertible that requires ultra-premium fuel or has high servicing costs.
Running costs and fuel price changes
You car’s actual running costs will vary from week to week depending on fuel prices. The distance income you receive from an individual trip may be slightly higher or lower than the costs. But over several months or a year, it should balance out so that your overall distance income is reflective of your overall running costs.
Even a large rise in fuel prices has a relatively small impact on per-kilometre running costs. For example, when the price rises from $1.30 to $1.60 per litre, the cost per kilometre for a small or medium car would only rise by about 2 cents per kilometre. Over time it’s expected that a period when fuel costs a couple of cents more per kilometre will be balanced by a period when it’s cheaper.
In addition, the distances driven by Borrowers are typically quite short - the average distance driven by Borrowers is around 80 kilometres per day. For vans, the average is under 50 kilometres per day. If your running costs are down by a couple of cents due to low fuel prices, you could pick up an extra $2 per 100km; and likewise if fuel prices spike and the costs go up, you may end up with a couple of dollars less per trip.
Size doesn't always matter
You don't have to choose a distance rate based on the size of your car. Size is only one factor affecting running costs, so feel free to choose the distance rate that you prefer. You may also choose a rate that is lower or higher than your car’s actual running costs.
You may like to experiment with both time and distance pricing to find what works best for your car and your own personal and income goals. You can take a look at other cars in your area, or of a similar type elsewhere, to get a sense of pricing in the market.