Would You Rent Your Car Out While Not Driving It? Car Sharing Explained

• Susan Johnston
• From: http://www.mint.com/

Sponsored by:

(photo: richardmasoner)

Since its launch in 2000, Zipcar has shaken up the car rental market and grown to include more than 550,000 members in the United States, Canada, and the United Kingdom. Its main selling points? The ability to reserve vehicles by the hour instead of by the day and the convenience of pickup locations all over major metropolitan areas. Similar services now include the nonprofits CityCarShare, I-Go Carsharing, and e-Go Carshare.
Now, new services are taking this model a step further. Instead of using a fleet of Zipcars, RelayRides, WhipCar, Spride Share, and Getaround allow car owners to rent out their vehicles to their neighbors when they’re not in use.

“Economically, it makes a ton of sense for both sides,” says Shelby Clark, the chief executive officer of RelayRides, which currently operates in Boston and San Francisco. “People underestimate how much it costs to own and maintain a vehicle.” AAA’s 2010 “Your Driving Costs” study revealed that that the owners of average-sized sedans spend more than $8,000 a year to own and operate their vehicle. Minivan owners spend more than $9,000 a year!

These sites allow car owners to offset some of these costs through rental fees. Owners get pricing guidelines based on their car’s year, condition, location, and other factors, but they ultimately set the hourly rate themselves.

For car renters, those rates can sometimes be lower than services like Zipcar. Tom Wright, cofounder of the UK-based WhipCar, says borrowers are motivated by cost and environmental factors. “Since they can use cars that are affordable and close to them, it doesn’t require extra cars and allows them to make better use of existing assets,” he says.

Many borrowers also appreciate that their money is going to a neighbor instead of a company, says Clark. Many of RelayRides’ car owners also offer special features like GPS, bike racks, CD collections, or even homemade cookies left in their vehicles.

But do the savings outweigh the safety and insurance risks?

As you can imagine, screening drivers and vehicles is a high priority for all of these sites. Wright says WhipCar conducts three-way conference calls with driving applicants and the DVLA (Driver and Vehicle Licensing Agency, the UK equivalent of the RMV) to ensure that the person has a spotless driving record. WhipCar also requires that vehicles be no older than eight years and checks if the vehicle has been stolen or involved in accident. Other sites have similar policies, and some allow the owner and the driver to rate the experience afterwards based on the caliber of the vehicle and the driver.

Like Zipcar, peer-to-peer car sharing sites bear the cost of gas and auto insurance. In the case of RelayRides, drivers over the age of 21 are insured by RelayRides’ $1 million liability insurance policy but are liable for a $500 deductible (Clark says this ensures that they treat vehicles as their own). Drivers are also responsible for paying any parking or traffic tickets issued during their rental period. Getaround has very similar insurance policies.

Though car owners are not liable for accidents that occur while their car is being rented, some auto insurance companies are squeamish about personal car sharing. But state legislatures are, in some cases, taking the side of the consumer: California recently passed a bill on car sharing that makes it illegal for auto insurance companies to void the policies of car owners who rent out their vehicles. The state of Oregon is considering a similar bill.
Car owners outside of California and Oregon would be wise to check their auto insurance policy before renting out their vehicle. However, with growing environmental and cost concerns associated with cars, other states may pass car sharing legislation in the future.

Clark sees this as just one example of the sharing economy. “Society is increasing rejecting traditional forms for ownership,” he says, pointing to Netflix as an example. “In the nineties, everyone had these giant bookcases of VHS tapes. But at the end of the day, I didn’t really want to own all these movies, I just wanted to watch them. It makes sense to access that movie whenever you need it. The global economic crisis has forced people to take a step back, and realize that ownership might not make sense.”

Evolution of Cars by Country [PIC]

Can You Live Without a Car?

• Laura Sullivan

Photo: Code Arachnid

I’ll spare you the environmental lecture—Just imagine your life with out a car payment. Sounds pretty nice, right? Read on to see how you can make it a reality. Even better: you don’t have to wear spandex biking shorts.

Honestly assess the cost of a car.

Of course your ride really costs a lot more than the monthly payment automatically usurped from your checking account. AAA puts out a nifty little publication yearly (http://www.aaaexchange.com/Assets/Files/200948913570.DrivingCosts2009.pdf), and has been doing so since 1950, that helps you assess the true value of a car, factoring in fuel, maintenance, tires, insurance—all of those things that seem to sneak up and empty out your savings account. (The average total cost per year is around $8,000).

If you are more digital than analog, try using this calculator, too: http://www.commutesolutions.org/calc.htm

What most avid bikers and public transit commuters say, though, is that it is a quality-of-life issue more than a financial one—though the money saved doesn’t hurt. A heart-pumping bike ride or subway ride with a paper (minus the crushing rush hour commute in a dense place like New York) simply makes for a better start to the day than inhaling exhaust fumes from the car in front of you.

Another thought: if you are exercising by commuting, you could also ditch the gym membership, at least according to one study about “active commuting”. Basically the study showed that people who walk or bike to work are less likely to be obese and have healthier blood pressure. (The researchers said more study was needed in the field, and that working out on top of an active commute is even better than the commute alone).

Find a bike-friendly city.

Most of the protests to going car-free have to do with hometown: It seems to make sense to be carfree in bigger cities with the cache for bike lanes and congestion that demands public transportation. But, surprisingly, the League of American Bicyclists conducted a comprehensive study of American cities, small and large, (http://www.bikeleague.org/programs/bicyclefriendlyamerica/pdfs/bfc_master_list_web.pdf), and square-footage, sheer size, doesn’t have much to do with bikeability. The #1 bike-friendly city in America, Davis, California is just 10.5 square miles, while the #2 bike-friendly city, Portland, Oregon, is 134.3 miles. Cedar Falls, Iowa? Tulsa, Oklahoma? Probably not at the first to come to mind when it comes to living without a car, but they’ve both recently made the bike-friendly list.

Population is also not a factor. Davis had 62,593 people in the 2008 Census, while Portland had 557,706. New York City, one the League’s list but not incredibly bike friendly, clocked in at over 8 million.

Communities are also pushing hard to promote biking, so check out the tax-dollar and charitable programs in your area. In Champaign, Illinois the Bike Project (thebikeproject.org) fixes up old clunkers and sells them on the cheap. They also offer a free class to teach people how to fix their own bikes to keep them on the road. A bike sharing program has started up in D.C. Public bikes are locked up in high traffic areas around the city. Swipe your card to unlock one, cruise for as long as your like, then drop it off at any of the docking points and you will be charged by the hour.

Choose your neighborhood wisely.

Buying or renting within a few miles of work may seem far fetched to some people, especially those in sprawling Sunbelt cities like Atlanta or Houston, but new zoning laws are looking to reverse that trend, for better or worse. Tax breaks are given in Atlanta and many other cities for new developments that are “mixed use,” meaning that homes and businesses are under one roof.

Also, a study published in August called Walk the Walk (http://blog.walkscore.com/wp-content/uploads/2009/08/WalkingTheWalk_CEOsforCities.pdf) shows that the so-called walkability of a city increases home values. Walkability here is defined by the social and shopping destinations that you don’t need a car to get to. The study ultimately found that, “Houses with the above-average levels of walkability command a premium of about $4,000 to $34,000 over houses with just average levels of walkability in the typical metropolitan areas studied”.

Consider going half-car.

No matter how many pains you go to trying to find the right place to work and live, there are going to be things that you don’t want to lug on the bike or bus, like, say, a Christmas tree or your weekly load of groceries. Clever car sharing companies, like Zipcar, are looking to capitalize on exactly that need for carless people. (http://money.cnn.com/2009/08/26/news/companies/zipcar_car_rentals.fortune/)

The idea is elegantly simple: Become a Zipcar member. When you need a ride, use an iPhone app or computer to find that closest Zipcar to you, which you reserve online. When you approach the car, touch your membership card to the window and the doors unlock automatically. The keys are inside, as is a gas card, and you are charged one flat rate per hour, about $8, depending on the city. Park the car in your hood and the process starts over.

As of January 1, 2009, Susan Sheehan of the University of California at Berkeley found that 24 car sharing programs in the United States has 309,437 members, definitely qualifying it as a trend that extends beyond one brilliant business idea. (In Canada, 15 organizations had 46,802 members).

10 cars that seem to last forever

Slideshow

Ford F-150

If you listen to the radio, you may have heard those Car Talk guys say that buying and maintaining a used car is almost always cheaper in the long run than buying, financing and maintaining a new car. And on the same show, you've no doubt heard the countless tales from “Bonnie in Minnesota” and her car with 300,000 miles that just keeps running, even in the harsh winters, and with minimal maintenance. Chances are you've heard such stories of nearly invincible cars from people you know, or maybe you've even told them yourself.

With the economy in the tank and more folks looking for these used diamonds in the rough, we compiled the following list of 'forever cars' from research, reviews from places like Edmunds and Consumer Reports, fun little anecdotes, and even our own personal experience. It's far from scientific, but neither is picking a used car. In fact it's still relatively a crap shoot, and no model carries an absolute guarantee of everlasting life, but here's a few that seem to beat the odds more than others.

1. Subaru Wagons

Here's a Japanese company that just knows how to make a hatchback. Whether it's a new Forester or a vintage GL, they seem to be ubiquitous everywhere you go, including some of the harshest climates around. Whether it's Alaska, Minnesota or high in the Rockies, you can bet on seeing a disproportionate number of Suby wagons still rockin' the road.

2. Ford F-150

There may have been a few dodgy years back in the 80s and before, but even older models still ply the road as the prototypical 'work truck' that goes anywhere and does anything. As the years keep coming, this best-selling pickup continues to earn its keep.

3. Scandinavian oddities

For years, some of the older European models were notoriously unreliable, and yet, those same Volvos and Saabs hold some of the automotive world records for longevity. A 1989 Saab 900 SPG previously owned by a Wisconsin salesman now sits in a museum with its original engine, having turned over 1 million miles, and a New York schoolteacher holds the world-record with the 2.5 million miles put on his 1966 Volvo P1800. Go figure.

4. Lexus

When it comes to living a long, luxurious life, Lexus is among the front-runners. Both luxury sedan and crossover SUV models make just about every list of “used best buys.” Who says posh can't be affordable?

5. Toyota 4-Runner and Tacoma

Back in the early 80s, after 21 iterations, the Toyota engineers scored a hit with the 22R engine, the mainstay of the 4-Runner and other models until the mid-90s. The model is still a hot topic of conversation in tinkering circles today for its reliability. The Tacoma comes from the same mold, just about the only light truck that can really give the F-150 a run for its money. Let us know if you see one for sale with an extended cab.

6. Honda Accord

When it comes to long-lasting autos, sometimes basic is best. The Accord is to mid-range commuter cars what the F-150 is to mid-size trucks. Change the oil, hope for the best and the odds are you won't be disappointed.

7. Mitsubishi Endeavor

A relatively new kid on the block, debuting in mass production only in 2003, the Endeavor seems to be a likely contender for the emerging title of 'everlasting crossover.' The Honda Element scores high marks across the board in this category, as well.

Toyota Camry Hybrid

8. Toyota Corolla / Camry

We figured plenty of Corolla and Camry owners would be getting indignant after seeing the Accord higher up on the list. Truth is, it's the Corolla that really makes the grade for never saying when, but we threw the Camry in just for the sheer volume of the things that we see on the road – and we mean every road – every single day, no matter how ugly they may get. Keep the faith, people!

9. BMW 3-Series

Here's a true dream car. Looks, performance, long-life. They told us it was impossible to marry a car, and that may be true, but that doesn't mean you can't forge a beautiful and lasting relationship with one of these. Don't worry what everyone else says. Trust us, they're just jealous.

10. Toyota Prius

Let's hope it lasts, because we sure as heck can't help you with fixing this one. In the rush for auto companies to go green, many put out early hybrids plagued by electrical problems like the Saturn Vue Green line, which has atrocious battery issues. But when it comes to this groundbreaking design, the original leaders at Toyota seem to have gotten it right the first time, with almost unanimous agreement among the experts that this is the hybrid most likely to outlive that puppy that just peed on your leg.

The Worst Cars for the Money

By Lauren DeAngelis

2009 Pontiac G5

No carmaker is perfect. Each has best and worst sellers, hits and misses. And while plenty of cars are generally good values, there are a few that don't make as much sense when you work out the calculations over time. That's where our new list comes in: the Worst Cars for the Money.

The Worst Cars for the Money were identified using data from the U.S. News car rankings, which are based on the collective opinion of the automotive press. This tells us how "good" or "bad" a car is within its class, according to a large number of critics. We then weigh the rankings against how much value the car packs in compared to others within its class. Using data from IntelliChoice, an industry leader in determining ownership costs, we include how much buyers can expect to spend up front, how much they'll spend on maintenance and fuel, and how much of a hit they'll take from the car's depreciation during the first five years.

The result is a list of cars you may want to think twice about before buying. But also keep in mind the unwritten part of a car's value: if you really like one of these models, then chances are you'll be happy driving it no matter what - which means that in the end, it could be the best car for your money.

Compact Car: Pontiac G5

The G5 trails the majority of compact cars when it comes to comfort, quality and performance, leading to a poor U.S. News ranking. Its sticker price is also a bit higher than many competitors, and it's expected to depreciate as much as 60 percent within the first five years of ownership - twice as fast as its top-ranked competitors. In addition, five years of fueling and maintaining the G5 is estimated to cost you $5,000 to $10,000 more than Honda's Fit or Civic. The G5's future is unclear since GM has announced plans to shrink the Pontiac model line significantly. Pontiac sold just 767 G5s nationwide in January.

Better values: If you're in the market for a compact car, consider the Honda Fit and Hyundai Elantra.

Compact Crossover: Suzuki XL7

Some critics note that while it's a competent people hauler, the Suzuki XL7 can't match the acceleration, handling and interior quality of top rivals. Its five-year cost of ownership is quite high - almost $47,000 as compared to the Honda CR-V, which is about $37,000. Depreciation is the major cause - like the Pontiac G5, the XL7 is expected to lose more than 60 percent of its value over five years. We should note that while the XL7 may have some shortcomings, this SUV has stellar crash test ratings and should be on the list for small SUV shoppers concerned about safety.

Better values: If you're in the market for a compact crossover, you may do better with the Mazda Mazda5 or the Ford Escape Hybrid.

Full-Size SUV: Jeep Commander

The Jeep Commander is a good choice for off-road enthusiasts, but buyers who spend the majority of their time on the pavement should look elsewhere. U.S. News ranks the Commander last among large SUVs. Its cost of ownership over five-years is $10,000 more than the Mazda CX-9 crossover and even higher than the popular Chevrolet Tahoe, another off-road-ready vehicle. While the Commander's sub-$30K sticker may look appealing, this big SUV is expected to depreciate 50 to 60 percent over five years. Sales were down 56 percent last year, and there's speculation that it may be discontinued after 2009.

Better values: If you're in the market for a full-size SUV, the Chevrolet Tahoe and Mazda CX-9 are worth a look.

Full Size Pickup: Nissan Titan

2009 Nissan Titan

With rugged practicality and a strong powertrain, the 2009 Nissan Titan isn't out of place in the full-size truck market. However, after more than three years on the market, the Titan still hasn't pulled in a lot of American buyers. Sales were down almost 50 percent in 2008. That may be because the Titan's value equation just doesn't make sense. It's generally well liked, but it costs up to $5,000 more than solid American options. The Titan also lags the competition in fuel economy, with only 13 miles per gallon in the city for the base model. Nissan has announced it will end production of the Titan in 2010 and is planning to replace it with a pickup based on the Dodge Ram.

Better values: Consider the Ford F-150 and Chevrolet Silverado.

Upscale Car: Volvo S60

The Volvo S60 is based on a nine-year-old design and has been left in the dust by continually improved competitors like the Infiniti G37 and BMW 3-Series. On the plus side, the S60 could save you two or three thousand dollars over five years, compared to the 3-Series or the Cadillac CTS. But consider that the existing S60's deprecation will likely only get worse: Volvo debuted a new concept at this year's Detroit Auto Show that will make the current S60 extinct.

Better values: If you're in the market for an upscale car, consider the Infiniti G37 or Lexus ES.

Sports Car: Mitsubishi Eclipse

The Mitsubishi Eclipse offers aggressive sports car styling, but critics claim it lacks the power and agility they expect in a sports car. This contributes to an underwhelming performance in the U.S. News rankings. The Eclipse isn't such a bad deal if you just want to look the part of a speed racer - there are just other sports cars that are better. The Eclipse's sticker price undercuts most of its rivals. The car will run you about $40k + to own over five years - about $5,000 less than the Honda S2000. The Eclipse's sales numbers confirm that it has loyal buyers. Sure, sales are down about 38 percent from a year ago, but the Eclipse still sold better than the S2000 or Mazda Miata. The Eclipse just received a refresh for 2009, which means it probably won't be going anywhere soon.

Better values: Still, for cars that perform better within the mainstream sports car class, take a look at the Mazda MX-5 Miata and Nissan 370Z.