A car is a significant expense for most people and takes up a large portion of the monthly budget, not far behind the rent or mortgage repayments. However, for most of us, the thought of going without a car makes our blood run cold – colder even than standing at a breezy bus stop in the middle of winter. That is why in between public transport and going without a car altogether is a middle option: car sharing.
Car sharing allows people who only need to use a vehicle occasionally to do so without incurring the costs of the vehicle sitting idle in their garage the rest of the time. It Access to a shared vehicle means your family can save on the costs of a second car for those rare times you and your partner both need the car at the same time, or you can have access to a business vehicle when you need to pick up clients without worrying about the business expenses for the rest of the time.
Car sharing is managed by independent programs around the world. Programs generally offer features such as the following:
• Well maintained vehicles, usually no more than three years old
• A range of vehicles to choose from
• A range of locations close to your home or office
• A charge per use, so you are only paying when you use the vehicle
• Insurance is included in the membership cost
• Petrol, maintenance and all other costs are paid by the car sharing program
• Break-down coverage and 24/7 roadside assistance.
• A paid petrol card if you need to refill the tank while you are using the vehicle.
Benefits of Car Sharing
Joining a car sharing program can help you do your bit towards reducing the congestion on the roads and minimizing the ever-increasing amounts of land occupied by cars, roads and parking spaces. Plus, greenhouse gas emissions from transport are second only to the stationary energy sector. Other environmental benefits of car sharing include:
• Newer and well maintained vehicles. This means that the vehicles in a car sharing program are producing fewer harmful emissions and running more cleanly because they are new and well looked after. On average, vehicles in a car sharing program are more than 4 km/L more efficient than privately-owned vehicles.
• Government support. Car sharing programs often garner government support, which encourages innovative technologies such as public electric car charging stations powered by green power.
• Driving less. When you have a car sitting in your driveway day in and day out, you automatically jump in it whenever you need to go somewhere. But when you don’t have a car, you think about other transportation methods such as walking or riding a bike. As a result, there are fewer cars on the road.
• Lower demand for cars. With more people sharing a car, there is a lower demand for new cars, which reduces the amount of energy and resources used in car production. On average, producing a car creates the same amount of emissions as those produced by the car over its entire lifetime. As a result, each car in a sharing program removes between 8 and 13 privately owned vehicles from the road.
Plus, most bookings for a shared car are made less than two hours in advance, meaning that the level of convenience is high. So if you are heading out to an important meeting but see that the weather forecast predicts rain, the car will likely be available, so you’re not caught out.
As part of a car sharing program you’ll also save money in the following ways:
• If you drive less than 7,000 kilometres per year, being part of a car sharing program is cheaper than owning your own car.
• Businesses that only need a company car can occasionally save money by using a shared car. It may also allow them to locate themselves in areas with little or no parking availability, which can reinvigorate the economy of local areas.
• There is no need to buy a second car for your family if you can share a car when you need one.
• Some programs run through universities allow students to take out co-op memberships for car sharing. This can provide transportation for students on a low income who rarely need a car except on certain occasions, such as moving, for example.
Disadvantages of Car Sharing
Each car sharing program operates differently, but there some common drawbacks to be aware of as you decide whether or not to become a member and forego your own car or secondary vehicle. These disadvantages to watch out for include:
• Damage to the vehicle. If the vehicle you borrow is found to be damaged when you return it, you are liable to pay for the repairs. The car sharing program will usually debit the amount for the repairs from your credit card and then conduct an investigation if you dispute causing the damage. Unfortunately, in many cases, when you return the car to its parking location, it sits in a public car park, and no one from the agency inspects it before and after you return it. Therefore, if the car is damaged while in the car park, if you were the last person to drive it, you can be held liable for the damage.
• Higher demand. Due to the recent economic downturn, car sharing programs are being inundated with new users who can no longer afford their own cars, but who still wish to use a vehicle every now and then. So there is a risk of joining an agency that has a low stock of cars available.
• Reservations. Shared cars must be reserved in advance to ensure they are there when you need them. But many people will reserve a vehicle even when they know they may not use it. As a result, there may be no vehicles available for you because they are all reserved.
• Shared vehicle. If you’ve ever let someone else drive your car you know how annoying it can be to adjust the seat and the mirrors and clean out their rubbish the next time you get in. Therefore, imagine doing this every time you get into a car because you are sharing it with a number of strangers, some of whom smoke or have other dirty habits.
Alban has been writing for personal finance blogs for the last 2 years, offering opinions and advice on various financial topics. When he is not contributing, Alban writes on personal loans.