Car rental vs sharing

Car rental vs. car sharing

It’s never been easier to reserve a vehicle when you need to travel, with cars available at the click of a button on your laptop, tablet or smartphone.

Personal car rentals for business, vacation and personal travel have evolved from booking exclusively with car rental companies to newer options, like peer to peer car rental. It’s also known as car sharing, but what is it?

We explore this alternative to traditional car rental and look at the main differences between how you reserve them, how insurance works and who you’re renting from with P2P car rental.

What is car sharing?

Car sharing is where you rent a vehicle for a short space of time, from a private owner, through a P2P car rental company.

It’s not to be confused with taxi or ride-sharing services like Uber. Rather, it’s where car owners offer their personal vehicles for others to rent for short periods. The reservation and any payments are overseen by a third-party company and rentals are organized online for delivery or pick up.

Think of it like the car version of lodging marketplaces, like Airbnb. Rather than booking with a regular hotel company, you’re renting someone else’s property for a short space of time. Except you’re borrowing a car.

What is Car Sharing
How car sharing works

How does car sharing work?

Peer to peer car sharing works when a private car owner lists their vehicle online for flexible, short term hire. They will typically do this through a car sharing company, who will give them a user profile that is displayed.

It’s the owner’s sole responsibility to keep the car in peak condition. This includes arranging:

  • Repairs
  • Servicing
  • General Maintenance

Those who wish to rent a car share would visit the site to browse for a vehicle online, then choose an insurance plan to cover their travel. Most companies will then ask for all costs to be paid up front.

Delivery or pick up of the vehicle is arranged, depending on any extra costs, where you may meet the car owner for an introduction on how to run the vehicle. When finished, the car is then returned its owner, where typically the third-party company will clean the vehicle.

What are the differences between car rental and car sharing?

There are several ways car sharing and car rental differ from one another. This includes how they operate, the service you receive from the company and the fleet of vehicles available. One big difference is that car sharing is considered separate to car rental, with different regulations. Here are just a few of the other main ways they differ.

Car Rental

  • Cars are rented to you by the rental company, from a standardized fleet of cars.
  • Vehicle is maintained by the car rental company, in accordance with state laws.
  • Locations are widely available statewide and globally, in cities, towns and airports.
  • Any vehicle rented can be delivered by the rental company or arranged for pick up.
  • Safety regulations are in place on young drivers, with minimum ages to rent in place.


Car Sharing

  • Vehicles are rented to you by a private car owner, through the car sharing company.
  • Maintenance of vehicles is usually the responsibility of the car owner.
  • Peer to peer car sharing is available across the country, but not in all territories.
  • Car share can be delivered by car owner or arranged for pick up.
  • P2P rental companies may place age limits on young drivers, this is dependent on the company.

How is insurance affected when car sharing vs. renting?

It’s always best to double check your personal insurance policy before reserving a car share or rental car.

Most car sharing services offer commercial auto insurance for participants involved, including car owners, renters and third parties. When you rent, you can rely on their own personal insurance policy or pay extra for additional benefits.

For car rental, if your personal comprehensive insurance plan protects your own vehicle as well as rental cars, then you may not need to purchase further coverage on top. This can make it cheaper to ensure you’re protected when you get behind the wheel.

On top of that, there’s a long history of established policy organized between car rental companies and state law. It’s there to help protect you and ensure others’ safety on the road.

As car sharing does not recognize itself as part of the car rental industry, they don’t always follow the same regulations. This can potentially leave you vulnerable in the event of an accident and could impact you financially if a claim needs to be made.

How is insurance affected
How does liability compare

How does car sharing liability work compared to renting?

In the event of an accident, liability insurance is there to cover any potential property damage to other vehicles on the road and compensate any injuries caused.

Specific details and limits vary state by state, though auto insurance offered by car sharing companies can include:

  • Liability coverage up to $1 million for car owners and renters
  • Underinsured motorist coverage
  • Personal injury protection
  • Limited comprehensive and collision cover

However, it is common for most personal auto insurance plans to exclude liability coverage for peer to peer car sharing.

When reserving traditional car rental, you may already be insured with comprehensive cover, as defined in your personal insurance policy. If that’s the case, you could already be prepared for any liability and personal accident coverage within the fine print of your own plan. If not, optional protection plans are available.

Is car sharing or car rental more secure?

Peer to peer sharing has become a popular alternative for car travel and does have its benefits. Though as an industry, it’s still a relatively new concept when it comes to state governance and auto insurance policy.

Car shares may market themselves as being more affordable. But they do come with some risk, especially if something goes wrong with your reservation or journey.

Mandates, laws and regulations have been in place for decades for the safety of the consumer and road users. As a standardized service that is protected by countrywide law and the American Car Rental Association, car rental can offer you a more secure and reliable way of car travel in the US.


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