Car sharing explainer: Commercial rentals and peer-to-peer schemes

If you like the idea of being able to drive when you need to but don’t want to pay to actually own a car, it could be worth looking into car sharing.

The same goes if you already own a car and fancy making some extra cash from it, rather than having it sit idle on your driveway.

There are other reasons to car share, too. It tends to be a more environmentally-friendly way to get around than owning your own car, for example – good news for the eco-conscious.

Here’s all you need to know about the different types of car sharing, how it all works, and how it compares to owning a car 👇

What is car sharing and how does it work?

Car sharing is basically a type of ultra-flexible, ‘on-demand’ car rental or borrowing scheme. There are two main types of car sharing – commercial car sharing schemes and peer-to-peer car sharing.

Using a commercial car sharing scheme is basically like renting a car, but on a more flexible basis. Using a peer-to-peer car renting scheme involves renting an actual person’s car – or renting out your own car when you’re not using it.

Let’s take a closer look at each option 👇

How commercial car sharing schemes work

Commercial car sharing companies are different to traditional car rental companies because they have lots of vehicles parked all over the cities they operate in. So, instead of going to a physical car rental office, you use an app to find a car or van parked near you.

You can usually get a car at any time of day or night (depending on availability). And you don’t actually need to interact with anyone to get access to the rental car. Everything is done online, often through an app, with the cost of fuel and congestion charges, for example, usually factored in.

Depending on the company you use, you could rent the car by the minute, hour or day. You might also be able to choose between doing a round trip, where you drop the car back where you left it, and a one-way trip, where you drop the car at your end destination.

There are some downsides. It could be more expensive than borrowing a car from a friend, for example, and you also might be restricted in terms of the type of car you can rent. There are also often requirements regarding your age and driving history.

Also, they tend to operate in more urban areas - so probably won’t be an option for those living in smaller towns or in rural parts of the UK.

And there might be a mile-limit on the rental – for example, one car sharing company allows you to drive 60 miles per day, but then you pay an extra 29p per mile after that. It can quickly become costly.

How peer-to-peer car sharing works

Peer-to-peer car sharing is where people lend out their own cars. So unlike in commercial car sharing schemes, someone actually owns the car that is being borrowed.

The finer logistics of peer-to-peer car sharing vary from platform to platform. For example, some include insurance and breakdown cover within the rental price. But others give you the option to buy the level of cover you want as a ‘protection package’.

Cuvva's temporary insurance is a form of peer-to-peer car sharing, as it allows you to borrow any car in minutes. You just find a car to borrow, choose how long your policy will last, and then buy your comprehensive Cuvva. Easy! Car owners can even charge a small fee, so they can make some extra cash while helping someone else get on the road.

It’s quick and easy to sort out, all through the app. You only ever pay for what you need, as you can get temp cover from one hour up to 28 days. If you need extra time, you can extend your policy or buy a new one with just a few taps in the app.

If you’re the car owner, you can lend out your car to someone safe in the knowledge that they’ll be using their own standalone car insurance policy - so your insurance won’t be impacted if something happens.

If you’re lending out your car via peer-to-peer sharing, it’s up to you to keep it clean and disinfected for each user. There are expectations on the borrower to leave it in a good condition, too.

Car sharing vs car ownership – the pros and cons

Car sharing isn’t just for one-off trips. Lots of people are now using these schemes or short-term insurance policies to get around regularly instead of owning a car. But which is the best option for you? These pros and cons should help you decide:

Car sharing pros

• There’s potential for this to be a much cheaper option than owning a car (more on this below).
• It’s better for the environment – if people are sharing cars, that means less cars need to be manufactured, plus there is more space on residential roads for gardens and trees.
• You only pay for what you need, whereas owning a car means you’re paying to have it sitting on the drive a lot of the time.
• It can be a good option if you don’t have anywhere to actually park a car safely.
• You don’t need to worry about maintenance and repairs.
• You get to drive lots of different cars – which could be fun!
• If you're a car owner, you can make some extra money by lending out your car.

Car sharing cons

• Some car sharing schemes only operate in certain cities, and whether or not you can get a car will always depend on availability. Some areas will have a lot more cars than others. (Cuvva operates across England, Scotland and Wales, by the way!)
• Even though car sharing schemes are pretty slick, depending on the platform, there can be more admin involved with every journey than just being able to hop in your own car.
• You have less flexibility than owning a car. Say you decide to stay an extra night on your camping trip – this might not be possible with car sharing as the car might be booked out by someone else. (Although with Cuvva, you can simply extend your policy from the app - just make sure you check it’s okay with the car owner.)
• You can end up getting charged extra if you go over a mileage limit. (No limit with Cuvva 👀)
• You might not always be able to drive the exact car you want.
• You might not be able to get a car in an emergency situation, whereas you know you can drive immediately if you own your own car.

Car sharing vs ownership – which is cheaper?

If you don’t need a car that regularly, it’s pretty safe to say you’ll spend less going down the car sharing route than owning a car.

There are tons of costs involved in car ownership, from the upfront cost of the car to insurance, maintenance and repairs, interest and, of course, fuel. Cars also go down in value (except some classic models). So you need to factor depreciation into the overall cost of owning the car, as well.

A recent survey on behalf of Cuvva found more than 1-in-5 British drivers use their car 10 times or fewer in a month - with the average car owner of the 2,000+ drivers we polled spending £145 per month on car costs.

Owning a car can quickly become an expensive outlay, especially if you’re only using it rarely.

Car sharing costs can add up too, though. So it might not be the cheapest option for those who need to, say, commute to work everyday.

Put simple, it depends on your personal situation and how often you expect to drive.

Are more and more drivers becoming open to car sharing?

Our survey also revealed 19% of drivers would consider selling their car if they could borrow one as and when they needed to.

And 16% would lend out their car if they could charge a fee and the other driver was fully insured on their own policy.

With Cuvva, you can borrow a car or lend out your car with just a few taps of the app. Even better, car owners can now charge a fee when they lend out their car, helping to offset the cost of car ownership.

Policies are always comprehensive, and car owners can have complete peace of mind with borrowers driving under their own policy - so their no claims bonus is not at risk.

Whatever you need, Cuvva's policies from 1 hour to 28 days might be able to help - with cover starting from just £11.90.

• Temporary car insurance for borrowing or lending a car in minutes.
• Learner driver cover for driving lessons, getting practice in with a supervisor, or taking the driving test.
• Drive away insurance for getting your new car home from the dealership.
• Temporary van insurance for moving home, dropping things to the recycling centre, or carrying a heavy load.

And it only takes a few minutes to get a quote.