Car Sharing: How Playing Nice and Sharing Cars Saves Money

One of the most important lessons we learn in kindergarten is also one of the best money saving tips of all time — share.

  • People save money by sharing library books.
  • We save money by sharing movies and renting.
  • Those who share tools by renting them at the local hardware store save money.

This is one of the foundational premises behind the money saving potential of forming a frugal community. The more you share, the more you save.

Now, for the ultimate question: would you share your car to save money?

What Is Car Sharing?

Those who participate in car sharing jointly use vehicles as part of a co-ownership program. Each member does not own their own vehicle, but they use them on an as-needed basis. Members of the co-op or car share have access to the fleet of vehicles owned the by the group. In order to participate, you must pay membership fees in addition to hourly and mileage usage fees.

When you need a vehicle, you simply look up the closest vehicle to your location and make a reservation (either by phone or online). Use the vehicle as you wish and return the car to a designated drop off location. Rentals can be for as a little as an hour and can extend for weeks or as long as the car sharing policy allows.

When you go to use the vehicle, you should have a key that opens the lock box that is attached to the car. Simply open the lock box to get your car keys and you’re ready to roll.

Car sharing saves money because you only have a car when you need one.

What about insurance?

Insurance coverage depends on the country, state/province, and co-op policy. For example, the Co-operative Auto Network based in Vancouver, BC insures all the vehicles in the fleet. If you are in an at fault accident as a member, you pay the $500 deductible. If you are not at fault, you pay nothing. As a member of the car share, you are automatically covered when you are driving one of the cars owned by the co-op.

How do you find a car sharing or car co-op company? The best place to start is by asking friends for a referral. Otherwise, google car sharing or car co-op plus your city name. The larger the city, the more options you’re likely to find.

What Are the Costs?

Typically, when you join a car share program, you will pay a fee to join. The fee, of course, is determined by the car share, but is typically more than $400 and less than $800. Remember, fees to join may be a deposit that is returned when you leave the co-op. In addition, you can expect to pay some other membership fees like a registration fee or lockbox key fee (or deposit) — typically less than $50. If you are married, both individuals would be required to join in order to have driving privileges.

For a sample usage price, I’ve copied the rates from the Co-operative Auto Network:

  • $3/hour or $36/24-hour period
  • 40¢/km for the first 35km, 25¢/km for each additional km up to 150km, 15¢/km for each additional km thereafter
  • $2 administration fee for each of the first three bookings of the month; the most you'll pay in admin fees in one month is $6

Remember, insurance and fuel costs are included in the rates — sweet!

If you’ve ever analyzed the math associated with buying a car cash vs. a car loan, you know that saving up your money over a period of time to buy your own car provides significant savings over a life time. However, people often ask how am I going to get around while I’m saving my money? The answer now is obvious: car sharing. Perhaps, in the process of saving up for a new car, you’ll find that car sharing is a better permanent solution than owning your own car.

Don’t forget the other car sharing benefits. By car sharing, you’ll help the environment and probably be healthier yourself because you’ll only get a car when you need it. On the other occasions, you may walk or ride your bike.

Is Car Sharing Right for You?

  • You must live in a large city. Sorry, my friends in Montana and Wyoming, but this isn’t going to work for you.
  • Your primary mode of transportation should be something other than a car. If you travel exclusively using a car, then this probably won’t be the most cost effective thing. However, if you typically walk, bike, or take public transport and occasionally need a vehicle as a supplement, then car sharing is probably better for you. Wikipedia suggests it is only ideal for those who drive less than 6,400 miles per year.
  • You need to be flexible and willing to share. If you car share, there will be an occasion when a vehicle is unavailable. Thus, you must expect a certain level of inconvenience with vehicle availability and location.
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Guest's picture

I can't speak to the specifics of the Vancouver program, but car sharing is now pretty commonplace in medium-large cities, and initiation fees tend to run closer to $25-50 than the hundreds in upfront costs written about here, with comparable annual fees. In the U.S. and Canada, the largest company is Zipcar, which will only cost you about $75 for the first year. Most indie companies (like I-GO in Chicago, Hourcar in the Twin Cities, Austin Car Share in Austin, and many others) charge comparable fees.

(I can however speak to the specifics of why for many people, giving up car ownership is one of the smartest financial decisions they can make. My book Carless in Chicago is about the Windy City specifically, but has lots of general information about the financial, health, and other benefits of ditching your car.)

Guest's picture

I've never heard of a service like this! It would be so perfect for us, but there's nothing like it near this sleepy little farming town. Too bad, too...

Guest's picture

Another idea to save money regarding cars is refinance your loan - I refinanced mine at and now I'm saving $78 every month on my payments.