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Is Car Sharing Right For You?

Car sharing is a relatively new concept that has been growing in popularity in Europe and the United States, as it seems to work best in densely populated cities.

It suits people who need access to a car straight away, and only for a short period of time. In inner-city areas, car sharing is an alternative to off-street parking issues, permit parking restrictions in narrow backstreets, and costly car park fees for vehicles that really aren’t driven that much.

What is car sharing?

It’s similar to renting a car, with some significant differences. Casual, informal car sharing can be managed via a website or social media page within neighbourhood groups, but there are professional companies who offer car sharing as a business.

How does car sharing work?

It’s typically charged per hour, and includes insurance and fuel. Share cars usually have central points where the share cars are distributed in dedicated parking zones across metropolitan areas, so they are usually more convenient than many car rental companies, which are often in more outer suburbs.

Registering as a car sharer can be done via an online form with ID requirements and payment details, such as driver’s license and credit card.

Some car sharing companies are free to register, while others charge a fee to begin, before you actually pay for the car sharing time. Rather than have to drive to a car rental company and stand in a queue waiting to be served, car sharing can be organised via your device and can be quicker and simpler.

The flexible nature of car sharing means you can pick up and drop off the car in designated zones, but don’t have to meet someone to hand over keys or receive instructions.

Although the car sharing model is slowly expanding across different parts of Australia, it is mainly a city-based option, with urban drivers having greater access to convenient drop-offs and pick-ups.

Is car sharing right for you?

Asking yourself how much it costs you to run your car - including maintenance, parking, cleaning, registration, insurance, repairs, and fuel, can help you answer that question.

For some people, depending on car usage needs, there are definite cost-saving benefits, but if you like having access to a car at the drop of a hat, and don’t want to be limited by travel between locations with designated drop-off and pick-up points, car sharing may not be for you.

If you don’t drive regularly, it can be an affordable alternative, though.

Generally speaking, the 10,000 - 15,000 km mark is considered the tipping point for affordability of car sharing. If you drive more than this, what you might save on car sharing will probably be minimal and you may be better off with the comfort, convenience, and resale value of your own car.

Can your own car become a shared car?

If you’re the type of person who will happily welcome strangers into your home as a holiday rental when you are not in it, then you are probably the type of person who may be open to letting your own vehicle become a shared car.

If you travel a lot and leave your car parked and unused, listing it as being available for car sharing could earn you some extra money, but there may be tax implications.

Environmental benefits of car sharing

There’s no doubt that less cars = less congestion and better environmental benefits.

According to a recent report by Phillip Boyle & Associates – The Impact of Car Share Services in Australia – just one car sharing vehicle can replace 10 cars. In Australia, the model is not so widely used that it is commonplace and exceptionally convenient but as that changes, it may be easier to access, and perhaps cheaper too.

Make sure you’re covered

If you’re planning to use your own car for sharing, get the right cover. Various car insurance providers now promote their insurance as being the best for car sharing or ride sharing drivers, but, like any insurance, it’s important to read the Product Disclosure Statement carefully and make sure you are getting the type of cover you need. And if you’re the one sharing someone else’s car, check the policy to ensure you are not liable for a huge excess bill, in case of accident.

The bottom line

It’s not for everyone, but many motoring experts predict it will continue to grow in popularity, especially as higher density living in urban areas makes residential car parking spaces a luxury, not a right. With the average cost of running a car in Australia estimated to be around $18,715 annually, crunching the numbers to see if car sharing will cost you less while still meeting your transport needs, will help you decide if car sharing is right for you.

Go deeper: What is pay as you drive car insurance?

Financial disclaimer

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.