Tasmanians to get $1,000 grants to rent their cars to tourists

People sitting in rental car on Tasmanian coast after government grants were offered to car owners to rent out their vehicles.

Tasmanian residents will be offered $1,000 by the state government to rent out their private vehicles to tourists through the Hire and Drive Reimbursement Program .

This $1 million scheme is in response to the major hire car shortages in Tassie after rental car operators sold off more than half their fleets during COVID-19 lockdowns. Since the state reopened borders in October last year, travellers have beens struggling to book hire cars and have been met with sky-high prices as demand has vastly outstripped supply. 

The government’s offer is contingent on owners registering their cars as rentals through the Motor Accidents and Injury Board (MAIB) Class 8 classification, which costs $750 per-vehicle.

Motorists can then sign up to accredited car-sharing platforms Car Next Door and Evee, which are currently the only platforms where private cars can be legally rented out in Tasmania.

The grants are also available to traditional hire car operators looking to reestablish their fleets, and will be accessible to everyone until 24 December (or whenever funds are exhausted). 

The goal is to reduce the costs of hiring a holiday car and increase options for tourists. Everyday Aussie car owners should carefully consider how this might impact their car insurance before jumping on the grants.   

How does renting out your car affect your insurance?

Whether you’re hiring out your wheels or driving them yourself, you’ll want to make sure you’ve got car insurance that can cover your ride to its full value. Here are a few things to remember when it comes to car insurance in Tasmania and using your car as a rental.

Some insurance policies don’t cover ridesharing. While car-sharing platforms Like Car Next Door operate differently to a service like Uber where you’re the passenger, it would be worth checking with your insurance company to make sure your policy covers your wheels if they’re used to make a profit. And remember, you might see a premium increase if you want to use your car to make extra cash. 

There are specific insurance policies for Car Next Door and Evee. While you might have your own comprehensive car insurance, these car-sharing platforms also provide insurance when you rent your car out through their service. Make sure you investigate how these policies cover accidents when holidayers are behind the wheel, what’s covered when you’re driving, and how it might interact with your independent insurance coverage.

Making a claim could affect your car insurance premium. If you make a claim on your private car insurance policy, it can negatively impact your claims history which could mean a higher premium or losing you no claims discount. Be sure you know how this works with car-sharing insurance and if it could have a flow-on affect to other external policies. 

If you’re looking for a better deal on your current car insurance before you start thinking about rental options, have a gander at the comprehensive policies below.

Compare car insurance - last updated 18 February 2025

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