Car sharing is one of the most popular new schemes to help urbanites cut down on their driving. The reasons people choose to participate in car-sharing are varied – everything from cost-savings to reduced environmental impact. Car sharing isn’t available in every city across the nation yet, though. Starting your own car-sharing program can be a legitimate alternative – but there are definitely a few things to keep in mind.
1 – Who will own the vehicle?
When you and a group of friends or associates decide to share a vehicle, the first question to answer is who is ultimately responsible for the vehicle. Unless you start a company or LLC that will own the vehicle, someone will need to be ultimately responsible for the money, maintenance and management of the vehicle. At least a basic contract should be drawn up and signed by all individuals sharing the vehicle.
2 – Insurance
As a part of the car-sharing group, the head person should make sure that the insurance will cover the car, no matter who is driving it. If the car will be shared more than 30 to 40 percent of the driving time, it is important to check with the laws of your state. Not telling your insurance company that the vehicle is regularly shared could constitute misrepresenting the usage of the vehicle. The other option is to ask all members of the car-sharing network to get their own “non-owner policy” or “broad form” policy – both of which cover the driver and not necessarily the car.
3 – Costs of the car-sharing
Figuring out the costs of car-sharing is one of the most difficult things for a car-sharing group. The monthly payments, if the car is not paid for, should be kept separate from the operating costs of the car. The monthly payment can be split as the “monthly fee” for being a part of the car-sharing group. The operating costs of the vehicle are the other consideration. One option is to sit down and add the maintenance, fuel, and insurance costs for the car together. Divide that total by either the number of people sharing the car – or by the number of miles you are expecting to drive the car. Alternately, set a “per mile” rate for the car, intended to cover all the operating costs. The U.S. federal government sets the per-mile cost of vehicle use at 50 cents per mile. Depending on the cost of fuel and insurance, an average per-mile sharing rate should be somewhere from 50 cents to $1 per mile.
Officially sharing the costs of a car may take a bit of time and arithmetic to figure out, but it can be worth it. Until ZipCar, Hertz Go, or some other car-sharing network makes it to your city, it can be a great way to reduce your cost and reduce your environmental impact.