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The Risks of Car Sharing for Renters and Owners

Updated on January 9, 2018
tamarawilhite profile image

Tamara Wilhite is a technical writer, an industrial engineer, a mother of two, and a published sci-fi and horror author.


Car sharing is increasing in popularity, with programs like Relay Rides and Zip Car becoming nation wide phenomena. A number of websites have popped up to help you share your car without becoming a taxi driver a la Uber or Lyft.

Car sharing promises an income stream to car owners, environmental benefits for users and financial savings for everyone. However, there are a number of risks that both car borrowers and car lenders are not taking fully into account.

When you offer your car on car sharing sites, there are a number of under-appreciated risks you are taking.
When you offer your car on car sharing sites, there are a number of under-appreciated risks you are taking. | Source

The Risks of Car Sharing for Borrowers

  1. The cost per hour for rending a car is sometimes higher than the rental car rate at national chains. The daily car rental rate is typically higher than the rental car rate from a national car rental chain.
  2. Mistreating a vehicle or leaving it a mess will hurt your reputation in the community, not just result in fines from the rental place.
  3. Rental cars at businesses have more flexible pick up times and drop off times. For example, a business is more likely to have someone available at 5 AM or 9 PM for a car pick up.
  4. Car sharing programs are still an evolving market, with local websites competing with large programs. A new car sharing service has a good chance of not being in existence in a year, whether bought out or absorbed into another program.
  5. Personal cars for rent are either underutilized or the owner is desperate to make the payments. In either case, these vehicles are less likely to be well maintained than a corporate rental car. Furthermore, if the vehicle does break down, the car’s owner is unlikely to pick you up and take you to your destination – though Hertz probably would. However, some car sharing programs like Zip Car do include roadside assistance.

The Risks of Car Sharing for Vehicle Owners

  1. Many auto insurers do not allow you to rent out your car. They are insuring you, and they may cover someone you lend the car to once in a while. However, most car insurance policies do not cover accidents when you are renting out your personal vehicle to someone else, whether as part of a car rental program or letting someone else take over the payments and drive it.
  2. If the borrower has the vehicle seized for DUI or carrying drugs in it, you’ll have a hard time getting it back. There has already been precedence in someone letting a person test drive a car getting the car impounded. As the owner, you’ll have to pay the impound fees to get it back. Police in many states have the right to keep and then sell at a profit the vehicles involved in drug crimes, even if the vehicle was not driven by its rightful owner.
  3. As a private individual, it is unlikely that you the car owner or the car sharing service have checked to see if the borrower is driving with a suspended license or under a mandate to only use a vehicle with an ignition interlock device. Renting your car then becomes a way to get around the court ordered limitations, and risks the impounding of your vehicle. Individuals generally don’t have the resources to screen potential renters except through reputations online.
  4. Red light tickets by traffic cameras are mailed to you, not the person who drove your car.
  5. Car seats and booster seats may be removed and put in the back when someone else is driving the vehicle. You cannot assume that they are correctly re-installed when the car is returned.
  6. The person driving the car will have to pay cash to get through a toll both, unless you have an RFID toll tag. If there is a toll tag, you’ll have to pay the tolls charged to your account. Unless you specify in the contract that the person has to pay the tolls they rack up, you’re stuck with the bill.
  7. Legally, you owe income taxes on the rental income from your vehicle.
  8. If the borrower loses the car, you’ll have problems finding it unless you have GPS or a built in locator.
  9. The borrower typically isn’t required to fill up the vehicle before returning it. The cost of the gas they used will offset the rental income you receive.


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