Car sharing insurance options

Last updated by mustard.co.uk on March 18th, 2021

It’s no secret that owning a car can be expensive. With tax, MOT and servicing, it all adds up. As such, it’s no surprise that car sharing is on the rise but how does it work, and what does it mean when it comes to insurance?

What is car sharing?

‘Car sharing’ is a fairly loose term but, in the UK, it generally means one of three things:

  • Carpooling – if you regularly share car journeys to save on cost or fuel – especially if you and a colleague take turns driving to work or you share the school run with another parent.
  • Car borrowing – if you borrow a car from friends or family for a period of time (for instance if you’re home from university or going on a short driving holiday).
  • Short term car hire – where you rent a car for an agreed length of time from a car sharing company or scheme.

Car sharing to work

What car share schemes are there in the UK?

A number of car share schemes in the UK have appeared over the years. Unsurprisingly, popular car sharing locations are mainly based in larger towns and cities, where cars aren’t necessarily an everyday necessity, due to transport links being readily available.

Some car sharing services are based on more traditional models of car hire where you deal directly with a rental firm. Newer car rental companies call themselves ‘car clubs’ which are usually self-service, more flexible and you can often hire a car for as little as an hour. Car clubs in the UK include:

  • Zipcar – available in London, Bristol, Oxford and Cambridge (also available in more than 50 cities across Europe and North America)
  • Enterprise CarClub – available throughout the UK
  • Hertz 24/7 – available throughout the UK and across Europe and Australia.

There are also platforms which allow car owners to hire out their own cars (think of it as the Airbnb of car rental). If you use these schemes, you’ll deal directly with the car’s owner via a car sharing app.

Platforms where you can rent cars from private owners throughout the UK include:

You can also sign up for schemes if you’re looking to share journeys on a regular basis. For example, carpool apps and websites like Liftshare help drivers and passengers find suitable travelling companions which can help lower the cost of commuting to work.

Car sharing by region

Car clubs and car sharing are hugely popular in tourist towns and cities and great if you spontaneously decide to explore further afield. To find out about hire options in tourist destinations, visit:

What are the pros and cons of carpooling UK?

Whether you use a car club, carpool or borrow a friend’s car, there are lots of advantages to car sharing, but like most things, there are downsides too – here are just a few examples:

Pros to car sharing Cons to car sharing
Car clubs offer an alternative to owning a car which can be expensive and impractical if you live in a city and rarely need to drive. Lack of convenience, if you’re using a car club, the car you want may not be available.
If you’re carpooling or lift sharing, fellow passengers contribute to fuel costs. Lack of flexibility and you may feel obliged to carry on with the arrangement and listen to a car share playlist you don’t even like.
Environmentally friendly – whether you’re sharing or using a car club, it means there are fewer vehicles on the roads. If you only use car clubs, there’s little opportunity to build up your own no claims bonus which could lead to higher than average premiums if you later need your own car and insurance.

Do I need car sharing insurance?

You must have insurance to drive a car but what you may need will depend on the situation – for example:

If you’re using a car club – in most cases, insurance will be included in the price of car hire but you should always check before you get behind the wheel.

If you’re driving your own car and carpooling or lift sharing – your normal car insurance policy will cover you. One vital thing to bear in mind, is that you can’t make a profit from giving lifts. Passengers can only give you money towards running costs (like petrol or diesel).

As soon as you start to make a profit from carpooling, it changes the nature of what you’re doing and it becomes ‘hire and reward’ – like a taxi service (which you need specialist insurance for).

If you’re borrowing a car from friends or family – you’ll need to make sure you’re covered to drive the car you’re borrowing. If you have your own insurance for a different car, don’t assume it will cover you. Third party policies rarely include ‘driving other cars’ (DOC) cover and while some comprehensive policies offer it as standard, not all of them do. If in doubt – ask your insurer.

Car sharing commutating

Temporary car insurance if you’re borrowing a car

If you are sharing or borrowing a car and aren’t already covered, you can take out a temporary car insurance policy.

These policies are separate to any others you may have and won’t affect the policy belonging to the owner of the car you’re borrowing either. You’ll also be able to specify the length of time you want cover for.

If you’re borrowing a car for a long period of time, it might be worth adding yourself as a ‘named driver’ on the car owner’s policy. If you do this, it means you’ll have the same level of cover as the main driver but remember – if you have an accident and need to claim on the policy, it will affect the policy holder’s no claims bonus.

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