NEW YORK (CNNMoney) -- Neil St. Clair owns a BMW 5-series and if you want, he'll let you drive it for $15 an hour or $75 a day.
St. Clair -- like thousands of people -- doesn't actually need his car all the time, so he's decided to take advantage of a new peer-to-peer car sharing service that allows him to rent his car out to strangers and defray his ownership costs.
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| Neil St. Clair rents out his BMW 5-series on RelayRides. |
"With monthly payments and insurance, I was in the black last month," he said. "Basically, I have the car for free."
He made about $700 in May, he said, his first month using the site.
But for St. Clair and a lot of others, it's not just about the money. They like the fact that their unused car is doing someone some good.
"I'm glad I can help people out when the car is just sitting there as dead weight," said St. Clair.
St. Clair rents his car through a national company called RelayRides. A smaller competitor, Getaround, operates in California's Bay Area, Portland, Ore. and Austin, Texas.
The rental companies each provide up to $1 million worth of liability insurance coverage on the cars during the times they are being rented. Getaround's insurance coverage is provided by Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500). RelayRides' users are covered by Hudson Insurance.
To make sure customers are protected, some states have passed laws that dictate minimum insurance requirements for peer-to-peer car-sharing companies.
Besides insurance, RelayRides and Getaround require that renters submit license information and submit to a check of their driving records before being allowed to rent cars.
Also, owners have the right to decline a rental request for any reason -- or no reason -- at all. St. Clair said he won't rent to people who sound unfriendly. He figures it's not a good sign for how they're going to treat his car.
For St. Clair there have been occasional problems. Mostly they've been small nuisances like a soda bottle left in the car or the lingering smell of cigarette smoke. But others have experienced much more serious issues.
A nightmare scenario: There has been at least one case, as reported recently by the New York Times, in which a car owned by a RelayRides user, was involved in a fatal wreck with damages that could top $1 million.
The case has yet to be sorted out. But because determining who pays is still unclear, the insurance industry remains leery of covering individuals renting out their cars.
"We advise consumers who participate in peer-to-peer ride sharing to read their insurance policies carefully and talk to their insurance agent to make sure they know exactly what is covered," said Loretta Worters, vice president of the Insurance Information Institute.
RelayRides founder Shelby Clark said, "We feel very confident that the car owner [and his or her insurance company] should not have any liability."
In a more typical sort of situation, Emily Castor of San Francisco, who rents her car out through Getaround, said the car was once returned to her with a large scratch on one side.
"The company took it and had it repaired in a shop and brought it back to me," she said. "They had it fixed better than new."
There are still unanswered questions, though. For instance, Worters asked, "What if a crash is caused by an improperly maintained car?"
But despite these issues, car rental programs are picking up steam and attracting the attention of larger corporations.
For example, General Motors (GM, Fortune 500) is teaming up with RelayRides so that owners of GM vehicles will be able to use the automaker's OnStar system to provide quick access to their car without the owner and the renter ever having to meet.
As it is now, renters and owners have to meet to hand off the keys or a separate device has to be installed on the car to allow renters access with a magnetic card.
OnStar currently has six million active subscribers and another 9 million cars have OnStar hardware installed, ready to be activated. That makes for a huge pool of available cars for potential customers, said Clark. 
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