The truth behind car sharing services | Money Saving Tips

| February 9, 2017 | 27 Comments

This blog post is not about the pros and cons of car sharing service although I will briefly cover this as well. This post is intended to show you how you can monitor your usage costs and thereby SAVE MONEY by using your local car sharing service. I will also compare car sharing program costs with regular car rental service and car ownership.

The purpose of this post is to enable the reader to make an informed decision on whether car sharing service is right for them and/or to enable existing car sharing service users to optimize their usage. Although my content is Canadian based, it can be applied to any car sharing service globally.

Source: FreeDigitalPhotos.net

What is Car Sharing?

According to Wikipedia [http://en.wikipedia.org/wiki/Carsharing]

Carsharing or car-sharing is a model of car rental where people rent cars for short periods of time, often by the hour. They are attractive to customers who make only occasional use of a vehicle, as well as others who would like occasional access to a vehicle of a different type than they use day-to-day. The organization renting the cars may be a commercial business or the users may be organized as a democratically controlled company, public agency, cooperative, ad hoc grouping. Today there are more than one thousand cities in the world where people can carshare”.

Who are some of the major Car Sharing service providers in Canada?

This is not a comprehensive list but names of a few major ones I found by Google search. Do a search for “car sharing [insert your city name]” online to find relevant ones in your area.

Car Share Halifax                       www.carsharehfx.ca

Communauto (Quebec)            www.communauto.com

AutoShare (Toronto)                 www.autoshare.com

Zipcar (International)                www.zipcar.com

Calgary Carshare                        www.calgarycarshare.ca

Cars2go (International)            www.cars2go.com

Modo                                            www.modo.coop

There is also an extensive list of other providers on the AutoShare website that you can check out.

What is your experience in Car Sharing as a consumer?

Each program offers some benefits that are suitable for some and not for all. It is up to you to decide which program is best suited for you.

When I arrived in Toronto I owned my vehicle. The cost of parking and insurance in Downtown Toronto was prohibitive and thus I chose to sell my car and benefit from the extensive public transit available in the City. However, work and personal reasons required the use of a vehicle on many occasions.  In fact in my professional life, I am required to have a car. I was for the longest time I could fathom, the only one of my kind in my vehicle intensive profession that survived without owning a vehicle, saved money, and in fact made some extra money than I otherwise would have with car ownership. Read on to see how.

At that time car sharing was relatively new concept in Canada. I came across a new operator on the scene called AutoShare. I relied on using this car sharing program for all my professional and personal needs. I have been a member of AutoShare since 2005 and thus have extensive experience on using car sharing service. I have also compared it against other car sharing programs that later arrived. Each program offers some benefits that are suitable for some and not for all. It is up to you to decide which program is best suited for you. In some cases, you don’t have a choice really, since there may be only one provider at present.

 How do Car Sharing programs work?

There will also be several penalty fees. You MUST be aware of these from the beginning.

There are different programs and services offered by each provider. You should review the program features on the respective websites and understand it clearly. You can also speak to a rep from the company to explain the process to you.

However, the basic feature among most programs involves a combination the following:

Total Fee = Annual Fee + Monthly Dues + Per Usage Fee

In addition there may be a onetime membership fee charged at the outset. The Per Usage Fee is usually a combination of the TIME + DISTANCE used for each trip.

There will also be several penalty fees. You MUST be aware of these from the beginning. I consider these penalty fees akin to credit card interest fees. As long as you keep paying the balance off each month you are fine, but boy o boy, even a small shortfall in full payment – BAM! You are hit with the full interest charge. In effect, these penalty fees can add up in time and prevent your plans for money savings in the long run. WATCH OUT! You have been warned.

For example, one penalty charge I particularly despised as a car sharing user (and common to all other providers) is the late return fee. Indeed, the purpose of this is in place to users don’t misuse the system and freeload on excess time or inconvenience the next user of the same vehicle. However, the penalty fee was quite high. This meant that getting the vehicle back to the lot in time was CRITICAL. This may cause users to drive aggressively to reach the lot in time, which could have resulted in potential accidents to vehicle and person/s. Plus sometimes there may be genuine reasons for delay, like traffic or sudden road closures. What would be beneficial to have is perhaps an incremental late charge – so you are penalized more for extensively and intentionally delaying return, but not much for a small infraction.

This distinct guilty or not guilty style of penalty charge is a bane felt among nearly all car sharing users universally. Something to consider when deciding to choose this lifestyle.

So how do I monitor my monthly usage costs?

What is critical to note here is that the Monthly Net Trip Charge with Taxes is your ACTUAL cost of using this service.

Each month you will receive a statement of usage and charges. Some firms offer real-time usage and charge per use.

However, like personal savings and budgeting plans that ask you to keep tab of expenses, I highly recommend you monitor your detailed usage costs on a monthly and annual basis to make sure that your usage costs lower than your total cost of vehicle ownership. As long as the former usage costs remains lower than that for the latter, you are good. For this purpose I have included below a pre-formatted downloadable Excel worksheet that I used when I was regular user of AutoShare. I think the worksheet is self-explanatory and can be modified easily with variable and fixed costs specific to your car sharing program. A brief explanation is given below. Feel free to leave a comment with any question you may have on this chart.

Click here to download the Car Sharing Usage Cost Calculator Spreadsheet

The first tab in the sheet is labeled Monthly Usage. This is where you monitor monthly usage charges.

The columns in red font are the ones that require user input. The rest are auto-calculated.

This example below is taken from a prior year usage with AutoShare. As you can see, the Gross Trip Charge was based on a combination of total kilometers driven plus hours rented. The KM usage rate and hourly rate varied based on the plan I selected and for the total time I chose for the rental. Based on your program features, input the appropriate rates per usage. There is a column labeled Reimbursed Charge. This pertains to any charges that are reimbursed to you (eg. Gas fill, car wash, discounts etc.) that are deducted from the Gross Trip Charge. Finally, there is the Monthly Plan Fee that must be included to obtain total Fees.

What is critical to note here is that the Monthly Net Trip Charge with Taxes is your ACTUAL cost of using this service.

The next tab is labeled Annual Usage. This is where you transpose your monthly charges. Only the red font fields need user input.

Why do you exclude gas (petrol or fuel) costs?

I have never considered gas cost as a variable in my calculations because this is outside of the vehicle usage costs.

The service will require you to fill your own gas and return tank full (like regular car rental companies) OR use one of their pre-loaded gas cars in the vehicle to fill the tank when it runs low OR credit you for the amount you filled (because you are already paying gas charge in the aforementioned DISTANCE usage fee that is based on the total kilometers driven).

I have never considered gas cost as a variable in my calculations because this is outside of the vehicle usage costs. In other words, whether you use car rental, car sharing, or your own vehicle you pay fuel costs at existing market rates in all cases. Thus to isolate the costs exclusive to vehicle usage for comparative purposes, fuel costs have to be removed.

So how does this information help me?

Given what you know for monthly and annual charges using car sharing service, you can compare it with charges from alternative vehicle usage options such as car rental facilities and of course car ownership.

Lets do a hypothetical scenario for both cases.

Car Sharing Vs. Car Rental

Before the advent of car sharing services, there has always been the Avises and Hertzes of the car rental business. Their model is simple. A daily or weekly rate + gas refill + optional service fees. I am a big fan of car rental companies. I get to sample various new models and most of their vehicles don’t have the stigma of the pesky ‘sharing’ tag imprinted in large on car sharing vehicles. Discretion is highly needed in certain instances say when you have to drive around a key client or family members. In my hypothetical rental scenario, I have excluded all optional rental charges such as insurance coverage from the rental company as most premium credit cards offer this coverage by default (always check first with your card company) and if I had to actually pay these fees on regular basis, then car rental becomes a mighty expensive option. For this example I have used rates from a Budget location in Toronto. You can easily price rental rates online for respective car rental companies.

Typical weekday Daily Rate for a compact vehicle            $53.00

Taxes & Fees                                                                             $18.17

Total                                                                                            $71.17

Notice that I have excluded gas expense as now it is easier to compare apples to apples.

As you can see from the Car Sharing example previously, I typically need a vehicle 7 times a month.

So now if I were to only use the car rental option then my total approximate vehicle usage would be $71.17 * 7 = $500. As you can see now, in comparison to car rental, car sharing is a bargain!

Note: There are ways to reduce car rental costs no doubt. I have not highlighted those here are these are user specific and I have used a generic example for simplicity.

Car Sharing Vs. Car Ownership

Let me warn all car sharers upfront who plan to forgo ownership for sharing. YOU WILL FACE TAUNTS from family friends and co-workers. Car ownership pride is akin to home ownership pride which is a universal phenomenon. I have faced taunts and glib comments from all sorts of folks from all walks of life. There is a certain stigma to being seen in a vehicle that implicitly shouts “I can’t afford to own my car so I’m driving around in a pay as you go vehicle”. It is true, it does exist, no one cares for your eco-cred, so learn to deal with it. PERIOD.

In this hypothetical scenario I am only going to compare ownership with a typical mid-size vehicle that is bank financed. The base model is a new Ford Focus ($14,869 MSRP), $3,000 cash down, $11,500 financed over 5-year term using 5.5% interest rate. A simple calculator is available at TD Bank site [www.tdautoloanscalculator.com]

Monthly Vehicle Finance Payments         $220

Insurance                                                      $125 [based on downtown Toronto location]

Parking                                                           $125 [based on downtown Toronto location]

Monthly Maintenance                                $100 [major repairs covered under warranty]

Total Car Ownership Cost                 $570

As mentioned before, gas costs are excluded to allow for even comparison.  There are obvious ways to save on car ownership costs no doubt. A generic example is provided for educational purpose.

As you can see clearly, car sharing and even car rental is a bargain in comparison to car ownership under the scenario that I use a vehicle no more than 7 times in a month. Indeed there will be a point with increased usage where car sharing and car rental will be more expensive than ownership.

But you can see now from this exercise that you have quantitative data that you can compile to make the case for choosing between car sharing, car rental and car ownership across different stages of your life.

What about the eco-cred that car sharing companies tout?

My simple answer to this – Snake Oil. PERIOD. There is no study done (that I am aware of) that links reduced overall emissions to car sharing programs. I compare this to the Prius Paradox – An user feels good by driving a Prius due to low emissions but ends up negating this benefit by driving more thereby burning more fuel in the long run and discounting the impact of not so eco-friendly fuel cell batteries.

In my case, I know for certain that if car sharing or car rental was not available or cost prohibitive to me I could simple chose to take public transportation at much lower cost. Even when I had the lower cost option of taking public transport, I chose the higher cost option of taking car sharing vehicle due to convenience!

You said earlier you can even make some money using car sharing services. How?

Take the reimbursement charges as an example. I always filled up the tank with gas on each AutoShare trip no matter what even though it was not mandatory. Why? Well, to avail of the various and generous reward merchants offered by fuel operators. In other words, I maximized the reward utility by charging this cost on my credit card and loyalty card to rack up reward points rapidly.

If you look back at my excel spreadsheet example, you will see that I would pay this equivalent portion of the charge any case to the company. If I did not fill gas, I did not get any reimbursement. If I did, then I got that equivalent portion reimbursed and then paid the balance to them. Therefore I moved a portion of the payment back to me in order to benefit from reward points.

And remember, you can also earn generous reward points with car rental companies as well. In fact I earned so many points that I was able to redeem for airline and amusement tickets.

Another way to earn money is through referral services of the program. Some car sharing companies offer you a reward for referring new customers.

And if you do own a parking lot that you can rent out on a monthly basis to a daily commuter, then you can earn income from your stall while using car sharing for your occasional travel needs.

So what do you think of car sharing overall?

Great. Indeed consumers benefit by having options. In fact Cars2go is a wholly owned subsidiary of GM, which recognized the changing trend of Gen Y opting out of car ownership towards the pay as you go model. I personally enjoyed the flexibility of car sharing as well as the option to sample new models of different vehicles such as the Mini Cooper, Mazda 3, and Prius. I also could not afford any down payment or ongoing costs of car ownership, so car sharing made absolute sense for me.

But you have to look at the long-term picture and your personal usage of transportation in your given locality. Car sharing will obviously not work for someone living in the suburbs.

In the five years that I was a power use of the car sharing service, I spent cumulatively close to $16,000 on the service (excluding gas costs). At that amount, I could essentially have bought the new Ford Focus five years prior (excluding inflationary and time value of money) and had it fully paid off with title in my hands. And no agony of taunts and glib comments to bear over that time!

There is one other aspect I should add. With most car sharing programs, as long as you are enrolled in their program, you will be under their blanket insurance coverage (confirm this). So if you are trying to build up driving history for insurance purpose or want to improve your history but not have to pay monthly fixed insurance fees for car ownership, then car sharing programs are great way for you to save money while also building up your insurance history that will again save you money down the road when you do purchase a car and have it insured. Savings can amount to few $100 dollars per month!! And remember, your standard rental car company insurance coverage will NOT build your driving history.

What do you think readers? What has been your experience with car sharing services?

Epilogue

Check out this wonderful article on car sharing costs by MoneySense Magazine

http://www.moneysense.ca/2012/10/22/do-car-sharing-programs-really-save-you-money/#idc-container

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Category: Household Savings, Money Saving Tips

About the Author ()

Larkycanuck is the pseudonym for the spirited, spontaneous and zestful Canadian. The Blog is focused on showcasing budget adventure travels for working families. Larkycanuck has traveled to over 15 countries, 38 cities in 10 years. He has never quit a job to do this. He travels with his wife and on some trips with the house rabbit (Pepper).

Comments (27)

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  1. My first car, which I bought over 10 years ago, is just starting to die and in preparation I signed up with Communauto. It has bailed me out at the last minute a few times, for which I am seriously thankful. Using them to get to work on time is cheaper than a taxi and faster than the metro. I’ve been shopping around for leases and found the car sharing program can’t yet be beat for price. Since I live in the city, it just makes sense. And to not have to shovel snow this winter to get my car out sounds lovely. Also, the parking for Communauto is right at the corner of my street.

    Where it’s inconvenient is I have a kid and a car seat. Not all of Communauto’s cars have car seats in them already. I’ve also found it nearly impossible to book a car on weekends unless I’ve booked a week in advance. So it will require a lot of planning to make it work. If it were just me by myself, it’s a total no-brainer.

    Thanks for the gassing up and getting points tip. I hadn’t thought of it!

  2. Kelly says:

    My first car, which I bought over 10 years ago, is just starting to die and in preparation I signed up with Communauto. It has bailed me out at the last minute a few times, for which I am seriously thankful. Using them to get to work on time is cheaper than a taxi and faster than the metro. I’ve been shopping around for leases and found the car sharing program can’t yet be beat for price. Since I live in the city, it just makes sense. And to not have to shovel snow this winter to get my car out sounds lovely. Also, the parking for Communauto is right at the corner of my street.

    Where it’s inconvenient is I have a kid and a car seat. Not all of Communauto’s cars have car seats in them already. I’ve also found it nearly impossible to book a car on weekends unless I’ve booked a week in advance. So it will require a lot of planning to make it work. If it were just me by myself, it’s a total no-brainer.

    Thanks for the gassing up and getting points tip. I hadn’t thought of it!

  3. Kelly says:

    Also, Ottawa has http://www.www.vrtucar.com, which has a partnership with Communauto. I can use my membership at either one. Two cities for the price of one!

  4. Oma says:

    I didnt even know these services existed, I thought renting and taxi’s were the only option other than outright owning your car. Thanks for the info!

  5. Tina says:

    OK this is good, thanks for revealing all the info behind these services. sound pretty good if you dont mess up and get hit with fines and stuff. When my beater dies I might give this a try.

  6. Thornton says:

    Thanks for handy Excel sheet!! I just started using this service, in Halifax. Not sure yet if I am saving money, but now I have no excuse not to track and figure it out.

  7. Meghan says:

    I actually like car sharing for another reason not mentioned here…you never have a messy car. Whenever I have owned my own car, it gets so messy, and i never bother to tidy it, unless maybe if I am having a date. With the car sharing, I’ve been doing it for 2 years now, and I never am in a messy car!

  8. Frank says:

    Do these car share places offer pick up trucks or larger vans? that would be interesting for me, totally.

  9. mercedes01 says:

    I want see more images of this car. Can you share some images of this car on your site?

  10. Regi says:

    I would like to know more abt the insurance programs that autoshare is providing. It says for 50CAD they could give a letter which would state our experience with autoshare and hence we were previously insured. They say that could save money, when in future, if you are required to buy your autoinsurance. I am not sure how much though. if someone has that insights, could you reveal?

    • larkycanuck says:

      Hi Regi
      it is true about Autoshare offering an insurance experience letter. I myself benefitted immensely by retaining my membership with them and building up experience over time. So when I ended up buying a vehicle, i got a great low rate as if I had been owning a vehicle all those prior years. So this is an important aspect to take in to consideration if you are trying to build or improve your driving history.

      • Regi says:

        thanks for replying to me. If you could please, tell me the details in figures. which insurance program did you then opt, when you chose your vehicle. what did the letter state actually ? How much time would one have to spent with Autoshare to get that credit?

        I have been living in Toronto for the past 3 years, and I quite recently have heard about Autoshare. I have heard about zipcars but felt not that cost effective since I used Discount. I now, feel bad , had I checked with Autoshare (at least during the weekdays because weekends is still cheap on Discount cars) I could have got a better low rate on insurance (now that I am shopping around). In TD Car insurance, I am getting for 260-300 p.m. depending on the Japanese/Korean/US (mexico :-)) cars. That is lot of money to play with a toy which I would just use over weekends.

        • larkycanuck says:

          There is no insurance program to opt. It is a blanket coverage with Autoshare. I think Zipcar has similar program. So you pay the $50 fee to enroll and then you are covered through the entire duration you maintain membership with Autoshare. It does not matter how much driving you do. As long as you are not at fault in any accident while using any of their vehicles, you will be given a good letter of driving history from the insurance company. Now it is up to your new insurance company who will insure your own vehicle in future if they choose to accept that letter or not. I went with State Farm and they totally accepted the letter. I would not pay for that much insurance you say for occasional use. not worth it. And you can combine Autoshare and Discount rentals according to pricing and usage. I used Autoshare, Avis and Budget.

  11. I’m a carsharing guy from way back, and wanted to congratulate you on a well done analysis and nice spreadsheet. A couple of minor points:
    I don’t understand your logic in the section comparing car sharing to car rental: since gas is included with Autoshare and not with ownership or rental, the comparison isn’t apples to apples unless you include the cost of gas in the calculations for the latter 2 options, Ditto for the cost of additional insurance?
    Regarding your assertion that there’s no eco-cred from carsharing, while it certainly is true that taking transit, walking or cycling is even more eco, there have been a number of careful studies demonstrating significant enviro benefits resulting from carsharing. See for example this greenhouse gas analysis that included Canadian carsharing:
    http://76.12.4.249/artman2/uploads/1/Greenhouse_Gas_Emission_Impacts_of_Carsharing_in_North_America_1.pdf
    or this 2005 report on US carsharing: http://www.trb.org/Main/Blurbs/156496.aspx

    For what it’s worth: the new one-way carsharing in Toronto (and Vancouver BC) is called car2go (not cars2go) and it’s owned by Daimler not GM.

    • larkycanuck says:

      Good points. Indeed the Car Sharing vs. Car Rental is not meant to be an Apples to Apples comparison but a general overview of the two modes of car usage and its pros and cons.
      And I was not aware of this study so now it is know to all reading this post.
      thanks.

  12. So, as a first timer here I wanted to say that your site is completely superb! We’re interested in starting a volunteer community initiative in this niche. The tips on your blog were extremely helpful to us, as it gave us something to work on. Thanks.

  13. Tara says:

    Great post! I am a long time Autoshare and Zipcar customer. I just want to be sure people are clear that you do NOT pay for gas with these services. Anytime you must fill the car to return it with the requisite gas amount (1/2 tank for Autoshare, 1/4 for Zip) you are REIMBURSED or you can use the provided gas card to pay. The rental fee INCLUDES gas. Not sure that was clear from the article.
    Also, the environmental advantages lie in people not using cars as much. Obviously all car trips are equal, rented or owned, but car sharers tend not to drive as often, especially for short trips. Car owner, eager to get their money’s worth from their vehicles, tend to drive, therefore pollute a lot more. Another environmental edge comes from the availability of energy-efficient, hybrid and electric cars. I could never afford to buy most of the cars I drive through Autoshare. Zipping around in an electric vehicle is a lovely perk of car sharing.

  14. Jewell says:

    Hi there, yes this article is genuinely fastidious and I have learned lot
    of things from it regarding blogging. thanks.

  15. Sarah Leigh says:

    Thanks this article really helped me decide to have another look at car sharing. I found another interesting blog about it too http://tikki-tikki.com/why-own-a-car-when-you-can-car-share/

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