As drivers, we’ve all heard about car pooling but exactly what is this recent trend known as peer-to-peer car sharing? The idea of car sharing is based on the concept of people renting their vehicles to another driver for a period of time. This concept of collaborative consumption has taken off and is based on crowd gathering of people who are willing to lend out their assets as a means of growth.
A virtual fleet of cars is brought together via a website and subject to screening of potential renters, cars are loaned out for a certain period of time. The renter pays for the period of time they rent the vehicle. It’s a passive income for the car owner and a cheaper way to rent a vehicle. Money is tight for many of us in today’s economic climate and peer-to-peer car sharing is a way of raising some much needed cash. Car sharing also reduces carbon emissions and reduces carbon footprints.
Car sharing in this manner could affect your insurance policy. Car sharing is a grey area with regards to car insurance. Some companies do allow car sharing on a domestic insurance policy providing the car is being used for social and domestic pleasure. If a renter needs to use the car for business purposes, then the insurance policy must be amended to reflect the use of the vehicle.
It is important to note that most domestic insurance policies do have a clause which states that a vehicle must not be used for hire or reward. Cover could become invalidated and it is important to check with your insurance company. As business cover is more expensive, the cost of the insurance premium can be shared accordingly, thus reducing insurance costs.
Peer-to-peer car sharing is increasing in popularity throughout the UK. With an ever-increasing tightening of family budgets, car sharing is a possible solution without the initial outlay of a car. As more and more insurance companies are now tailoring insurance policies to accommodate car sharing schemes, another option is to share the cost of buying a car. While the car can only be registered in one name, the costs of running the vehicle are shared between two or more people. Car insurance companies will also take into consideration no claims discount on named drivers in respect of future insurance policies and related concessions.
There are many benefits to be had from peer-to-peer car sharing. Rural areas with limited public transport in particular benefit from such schemes. Younger drivers, for whom insurance premiums tend to be high, will benefit from shared costs. Donations from Transport of London have also been awarded to car sharing schemes in the capital. Peer-to-peer car sharing could be the name of the game in the future.
What do you think about peer-to-peer car sharing? Is this a feature we could be seeing more of in the future and who do you think it will appeal to most?
Author: Cailen Mctoldridge – Follow her on Google+.