Auto Finance Savings: The Pros and Cons of Car Sharing in 2022

Automobile and financial experts and government officials recognize that the prices of new and used vehicles and associated fuel and parts have skyrocketed because of the pandemic, global supply chain and economic problems and events in Europe. Even with this acknowledgement, no one seems to be able to offer any type of advice to drivers who must have a motor vehicle as transportation for work and school commutes, running errands and other reasons. As a result, a lot of consumers have decided to find their own unique solutions, such as riding bicycles and even electric golf carts.

One of these solutions, car sharing, has become increasingly popular with drivers. Yet, this option can create financial woes in the long run. Consider the following before sharing a motor vehicle:

What Does Car Sharing Mean?

Whether you call it car sharing or vehicle co-ownership, the term essentially means that more than one person uses a single motor vehicle. Unlike carpooling in which multiple people heading in the same direction share the same vehicle for a trip, people who share or co-own a vehicle set up a schedule to use the vehicle alone or in a car-pool arrangement to travel wherever they need to go. They also share the costs related to the vehicle, such as paying for fuel and maintenance.

Traditionally, family members, friends, housemates and others who cohabitated in the same house would commonly share one or more vehicles. With recent increasing costs related to owning an automobile, the type and number of people sharing a car has changed drastically to include classmates, coworkers, neighbors and even strangers. With the latter, a vehicle owner usually rents out their vehicle to others rather than share ownership. With the former, multiple drivers might share ownership or only costs depending on what the primary owner's insurance allows.

A New Form of Car Sharing

Some people have also decided to co-purchase a vehicle to share. With this scenario, one person offers others the opportunity to pay for a shared ownership of their pre-existing vehicle or several people decide to purchase a new or used vehicle together. Both scenarios offer each owner a stake in the joint investment. Given that motor vehicle prices have increased by thousands above last year with no end in the price hikes in sight, many people see this as the only solution for owning a vehicle.

In this type of scenario, the owners establish rules related to ownership, use and maintenance of the vehicle. They make certain that everyone knows how much they must pay into the investment upfront and as time passes. They establish a schedule and a series of steps that every owner should follow to make certain that they can access and use the vehicle when they need it. They usually also set up rules about eating or smoking in the vehicle and traveling with passengers and pets.

Pros And Cons of Sharing

This type of transportation arrangement offers many obvious benefits. An existing vehicle owner can see a reduction in their automobile maintenance costs. If they decide to also carpool, they can see a reduction in fuel costs. Parents in the same neighborhood whose children go to the same school can pool their efforts to reduce fuel costs and even stress by having a different parent become responsible for the carpool each day. Multiple people who need a car but don't use one often can enjoy lower overall related expenses. Additionally, if someone has always wanted to own a luxury car or use an RV for camping now and then, they can own a share in an experience that they couldn't otherwise afford on their own.

Of course, co-ownership of a motor vehicle can also cause some headaches. Co-sharing a car only works if everyone can stick to their schedules and make calm arrangements. Far too often, a car-sharing arrangement leads to a dispute and even legal problems because one or more people sharing in the use of the vehicle fails to respect other users and ignores the schedule or group-established rules. For example, a person might decide outside of established rules that it's okay if they're a few minutes late returning the car whenever they have it or smoke in the vehicle now and then. If another person sharing the vehicle loses their job after running late too often or becomes ill, they might seek restitution in court. SARS-CoV-2 is another factor. After all, a person who shares a vehicle brings more people into their daily contact bubble.

Things to Keep in Mind

There's no perfect car-sharing arrangement. It's highly beneficial for many people right now to share a motor vehicle, but it's not ideal. Some people are purposely or unintentionally disrespectful of the needs of others. Additionally, a driver might have an accident or run behind schedule unintentionally, which can disrupt the schedules of everyone else who uses the vehicle. Vacation vehicle sharing, such as when people share the use of an RV, is a better way to share since it usually only involves sharing one or two weekends or months out of a year. Yet, serious issues can still spring up that can cause financial harm. If you're considering this type of arrangement, always take all of these factors into consideration beforehand and make certain that every aspect of the arrangement is clearly outlined in writing in a signed contract to protect yourself against future auto-related financial harm.