Money Saving Options: Car Ownership Pools

As costs of cars, fuel, maintenance, and insurance skyrocket, some North American cities have car ownership pools. The benefits and how to get started.

Rising costs of vehicle purchase, maintenance and operating have made car leasing a popular trend. Still, the cost remains high, especially for occasional drivers who don't require an everyday car. An alternative may be to rent by the day or obtain a more reasonable weekend package rate. When the dust settles, however, the cost may still be in the steep $50-75.00 per day range.

Steep compared to what? Compared to car pool cost sharing, that's what! With a membership fee, usually between $200 and $500 but often refundable, a cost sharing member purchases the right to use a car whenever it is required. Some car share groups even have pickup trucks available for a member's spring yard cleaning or help to move the mother-in-law.

Normally, members also pay modest user fees, usually in the range of $1.50-$2.00 an hour and 40 cents a mile, depending on local gas prices. At that rate a two-hour trip to the mall could clock in at $10.00 or less.

It's not so much what members get with a car share deal as much as what they don't get. They don't get a monthly installment bill for a car that just sits in the driveway and depreciates most of the time. They don't get repair bills. They don't get the hassle of regular oil changes and tune-ups. They don't get an insurance bill or have to buy plates every year. They don't even get as much air pollution because they find they drive less than before.

Car shares aren't for everyone. The breakeven for members is about 12,000 kilometres (7500 miles) a year. Anyone who drives less than that does very well economically. For anyone who needs a car daily, a cost share probably wouldn't work. Yet, worth considering is using a car share to save the cost of a second car.

Car sharing has been popular in Europe for nearly fifteen years. In Switzerland, for example, car sharing groups have 30,000 members who share 1400 cars. In one Swedish city, 230 members share sixteen cars.

North Americans are not far behind the Europeans. Rising costs have spurred interest in recent years. Since 1998, 300 members in Portland, Oregon, have nineteen cars on the road; in Seattle, since late last year, 370 members have twelve cars; in Boston since June 2000, 250 members have fourteen cars. Car share groups are in the planning stages in at least another dozen American cities from Boulder to Kokomo to Honolulu.

Canadians, too, have adopted the car share format, beginning in the mid-Nineties. To the east, Quebec City car sharers number more than 750 and have forty-five cars at their disposal. In Montreal, 920 members also share forty-five cars. To the west, 550 members in Vancouver have twenty-nine cars, and in Victoria, seventy members have been motoring around very conveniently since 1997 with only four cars.

Car share groups take many forms. Some are cooperatives, others are private businesses, and a few are non-profit organizations. While the breakeven usage ratio of cars to members averages about one available car for every twenty members, initial capitalization investment and fixed operating costs indicate actual breakeven to be about 400 members.

Circumstances in every city are different. Initial costs can be reduced by buying out leases or purchasing vehicles from new members, by arranging long-term maintenance agreements with local garages, and by purchase of fleet insurance-often cheaper than conventional private owner insurance.

Fortunately, for anyone contemplating a car share membership or even starting up an organization, the kinks have already been worked out. There is no need to re-invent the wheel before getting on the road.

© High Speed Ventures 2011