Rideshare services, such as Uber, have exploded all over the world. Due to the demand for the service, more and more drivers are joining Uber’s workforce to earn an income either part-time or on a full-time basis. As an Uber driver, not only are you helping others get where they need to be, but you’ll also be earning the money you need.
If you’re interested in working with Uber, the first and foremost concern is obtaining a car. You have several options: you can purchase a car, participate in Uber’s Xchange program, use a peer-to-peer car rental, partner with car rental companies like Hertz, or lease a car. In this article, we will explore how car leasing works with Uber, the advantages and disadvantages and other requirements for working with Uber.
Leasing a car vs. buying a car, check out this article.
What Does It Mean To Lease A Car?
Leasing is the process of “borrowing” a car for a specific period of time, usually two to four years. The lessee agrees to only drive a certain amount of kilometres and keep the car in the same condition. In exchange for the lent car, the lessee pays a monthly fee which is typically lower than a car loan payment. At the end of the lease term, the lessee returns the car to the lessor. Some car leases have an option to buy at maturity if you’re interested.
Pros And Cons Of Leasing A Car For Uber
If you don’t own a car or don’t want to use your car with Uber, you have the option to lease. Leasing a car has it’s pros and cons, let’s explore them below.
- Lower Monthly Cost. The monthly payment of a lease is less expensive than a car loan payment.
- Car Turnover. You can drive a new car every time your lease expires.
- Warranty Protection. You’ll always be protected by a warranty with a leased car.
- Car Disposal Not an Issue. When you own a car, you’ll have to worry about selling or trading in your car down the road. This isn’t a stressor for individuals who lease cars.
- Stable Income a Requirement. Having a steady stable income is a requirement for leasing. The dealership will want to know that you can afford the payments.
- Costs More Over Time. Putting money into a lease doesn’t allow you to build equity. You’re simply paying to drive without getting any value out of it. When you own a car, you’ll build equity and the cost to operate will decrease over time.
- Mileage Limitations. Leases only allow you to drive a certain amount of miles during the term. This could be an issue if you drive a lot of kilometres.
- Responsible for Maintenance. You’re required to properly and regularly maintain your car as a condition of the lease.
Options For Leasing A Car For Uber
If you decide that leasing a car with Uber is the best choice for you, you have two options. The first option is to get a standard lease through a dealership or alternative lender. Once you’ve obtained a leased car, you can start working with Uber.
Your second option is to use Uber’s Xchange program. Uber Xchange is a program that partners with car dealerships to provide drivers with short-term car leases. Drivers are required to pay a deposit upfront then they make scheduled payments while they drive.
A huge benefit to the Xchange program is poor credit is not a huge issue. However, the downside is interest rates and monthly fees are higher than traditional leasing. You’ll also need to rely on Uber to maintain and fix your car when there are issues. Reliance on Uber can be an issue because you could be out of work for weeks while your car is being repaired.
The Uber Xchange program is ideal for individuals planning on driving full time, can’t get approved for traditional leasing and want a car for personal use. Otherwise, you’ll likely get a better deal by finding a lease on your own.
Should you consider a lease takeover?
What Kind of Car Can You Lease For Uber?
Uber has specific requirements for the cars that their drivers use. There are also requirements for the driver. You should absolutely consider these requirements before leasing a car and working with Uber to ensure that you’ll qualify. The list of Uber’s car requirements is below.
- Cars cannot be older than 10 years, but this varies slightly from city to city
- Must be a four-door car, truck, or minivan
- There must be seating and seat belts for four passengers, excluding the driver
- Manual and standard transmission is allowed
- Driver’s full name must be on the vehicle’s insurance
- The driver’s name does not have to be on the vehicle’s registration
- Car must pass a vehicle inspection
- Full-sized vans are not allowed (ex. GMC Savana, Ford Transit, etc.)
- Taxis and other labelled vehicles are not allowed, including commercial and advertisement marked cars
- Salvaged and rebuilt vehicles are not allowed
- Driver must pass a driving record check and background check
Alternatives To Leasing A Car
If you decide that leasing a car with Uber is not right for you, you have other options. You can either purchase or rent a car. Purchasing a car to use for Uber can be done through a dealership or alternative lender which is a fairly standard process. Renting a car is possible through specialized platforms, such as HyreCar and Hertz partnerships. It’s worth your while to explore all of the options before making a decision.
Get On The Road With Uber
Driving with Uber on a part-time or full-time basis is a great way to make some extra cash or earn an entire living. Leasing a car is one way you can work with Uber, but there are other options too. If you’re interested in the options available to help you get behind the wheel, we can help.