Executive director and co-founder, Steven Johnson

CAR rental firms, knocked by growing rivals in app-driven car-share programs, now have a new competitor that operates directly from their heartland.

Frustrated by the cost of parking a car at major city airports, Steven Johnson combined a low-cost parking solution and a budget-priced car-rental concept that is now marketed close to Melbourne airport as Carhood.

The fledgling company is aiming to capture some of the $2 billion Australian rental-car business and compete with its 100,000 vehicle fleet – all by using your car.

Since inception in early 2015, the business has captured more than 5000 customers and is preparing to expand the idea to the United Kingdom.

The concept is simple: Leave your car at the airport and let someone else use it while you’re away – and get paid for it.

Mr Johnson moulded Carhood on his experiences with house-rental app AirBnB but said the reason he started the business was because of the high price to park a car at the airport.

“Parking in Melbourne airport alone makes about $295,000 a day so it’s a very expensive way to leave your car just doing nothing,” he said.

“The Melbourne to Sydney route is one of the busiest in the world so we knew we had a captive audience.

“I started in April 2014 with the idea that people flying out from an airport could leave their car somewhere close and then rent the car out while they’re away.

“But the first hurdle was insurance and it took six months before we found an insurer willing to take on insuring a person’s car for third-party renting. No big-name insurer would take it on.”

The second step was to find a house close to Melbourne airport that would be the base for the Carhood business.

“We started very raw. The front lawn was the car park,” he said.

The system has been refined – including a move to a commercial site three months ago – but the basics remain: The car owner drops the car at the Carhood site where it is checked for damage and photographed. The owner is driven to the airport. The car is then available for rent in the time period that the owner is away. The car is rented, then returned and checked, and the owner is then collected from the airport and reunited with the car.

“If the car is rented, there is no car parking charge and the owner gets 25 per cent of the rental. Generally that works out to be from about $10 a day. The car is also detailed inside and out before the owner collects it.”

Prices charged by Carhood are claimed to be up to 50 per cent cheaper than the major car rental companies, and 10-20 per cent less than the secondary rental firms.

“It is a much cheaper option to renting through traditional companies,” he said.

“We are not on airport land so that’s a big bonus when it comes to our expenses. We don’t own cars, we don’t pay registration or maintenance. That’s another plus. We pass all these savings on to the customer.”

Carhood is available either by pay-as-you-use or an unlimited-use subscription with users paying $497 a year for access to cars at any time, with this system appealing most to corporate customers and frequent flyers.

The cars that are available change constantly and are priced accordingly. All must be younger than 15 years and have less than 200,000km on the odometer.

“The average age of the vehicles is three to four years,” Mr Johnson said.

“They are all good cars but some are very luxurious. A two-year-old BMW sedan, for example, may cost about $60 a day to rent and an Audi A7 or BMW 7 Series may be up to $200 a day. Our cheapest cars are from $14 a day.”

Since its February 2015 launch in Melbourne, Carhood has opened in Brisbane and will soon expand to Sydney.

Mr Johnson said he is looking at the Gold Coast, Perth and Adelaide to follow but said the UK may precede any further Australian expansion.

Carhood is funded through private venture capital is currently raising $2 million to complete its expansion program.

“We are seriously looking at the UK and also New Zealand, probably within 18 months,” he said.

The board includes Mr Johnson, former Fleet Partners director Nick Johnson and UK investor and totallymoney.com founder, Jonathon Hassid.

By Neil Dowling