A security deposit is a refundable sum a rental business holds for the duration of a rental as protection against loss. It is not revenue — it is the customer’s money, returned in full when the vehicle comes back clean, fuelled and on time.
What it covers
A deposit typically buffers against:
- new damage to the vehicle,
- fuel returned below the agreed level,
- excess mileage beyond any limit,
- late-return fees,
- missing accessories such as helmets, cables or child seats.
Sizing the deposit
Deposits should be set per vehicle category, not as one flat figure — a premium vehicle warrants a larger deposit than an economy one, matched to its value and risk and to local norms. Too small a deposit leaves you exposed; too large deters customers.
Handling it fairly
The deposit is only fair if handovers and returns are documented. Charges deducted at return should be evidenced against the rental agreement and the condition photos taken at handover. On a clean return, refund the balance promptly — fast, fair refunds turn one-off renters into repeat customers.
Deposits are held and refunded per rental, and only amounts retained for damage or charges become revenue — so they are excluded from revenue per vehicle until retained. Note that in-app payment processing is an integration, not a built-in feature; deposits today are recorded against the booking.