Finances & Money

4 Things to Consider Before Car Sharing with Strangers

By now, you’ve probably heard something about transitioning to a sharing economy. That sounds pretty great, doesn’t it? After all, sharing is caring, right?

The sharing economy refers to the trend of peer-to-peer exchanges. In the past, many services have been supplied by businesses (such as taxi services). Now, businesses are starting to facilitate transactions between individuals. So, instead of renting a hotel room, you’ll get an Airbnb. This has huge implications for the economy as a whole. It empowers individuals while also putting a strain on many traditionalist companies.

Taxi services are now seeing changes due to the sharing economy. Car sharing is the ability for people to directly rent their vehicle to people. There are some obvious benefits to this. It can allow car owners to make some extra money without doing anything. Plus, the renters can get a great rental rate without having to own a car. But like anything, this concept comes with its downsides. Here are four things to consider before car sharing with strangers.

Do You Really Want Someone Else in Your Car?

A lot of times, things sound better in theory. Many individuals who use your car will be respectful of your property. They won’t drive dangerously or make a mess. But this certainly won’t apply to everyone. It’s important that you think what it’ll be like to have random people using your car. At some point, it might stop feeling like it’s yours at all.

How Will It Affect Your Insurance Costs?

One issue with car sharing is how it affects insurance. Your insurance provider definitely doesn’t want you to do this. Consider the equation from their perspective. When you’re the sole or primary operator of a vehicle, it’s possible to assess potential risk. This goes out the window when you start letting random people get behind the wheel. Some insurance providers won’t even work with people who participate in car sharing. Then again, some are A-Okay with the process. So, it’s important that you look at auto insurance quotes before jumping into this practice.

Who’s Liable If Something Happens?

Here’s another insurance conundrum. Who’s responsible if the person driving your car causes an accident? You gave them the keys, after all. Most car sharing platforms offer protection to some degree; but this usually won’t cover the most catastrophic accidents. Consider the potential lawsuits involved if the driver of your vehicle is involved in a fatal accident. And if a malfunction or idiosyncrasy with your vehicle caused it, you’ll be in a sticky situation. If you’re going to participate in car sharing, you should try to boost your insurance coverage.

Does the Money You Earn Make It Worthwhile?

With all the potential headaches, extra maintenance, and insurance costs—is it worth it? The money you make is based on the type and quality of your vehicle. Usually your actual income after fees will be six or 10 dollars per hour. While that sounds good for not doing any actual work, think again about the aforementioned issues. Will that money make up for those extra costs?

Car sharing, and the sharing economy are both great concepts. However, they are still relatively new, and still need to go through some growing pains. It’s important you consider possible negative outcomes before getting involved in car sharing.

 

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Susan Paige

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