- Office of Consumer Affairs and Business Regulation
Peer-to-peer car-sharing has emerged as an alternative to renting a car. With a business model similar to Airbnb or Uber, it allows car owners to rent out their vehicles to individuals within a given area through a mobile app. In providing this service, these platforms, such as Turo and Getaround, aim to make it easier, and perhaps less costly, to rent a car.
Users of these apps do not need to make their way to car rental centers and then spend time waiting in line before having their paperwork and credit card information processed. Rather, they can pick up their vehicles at the curb, generally for a much lower price they would pay traditional car rental companies. These platforms may also benefit car owners in that they can maximize the value of their otherwise unused vehicles.
These benefits, however, do not come without controversy. To begin with, a user of one of these apps may rent a car that is subject to a recall and thus unsafe to use. Consumers should check the Vehicle Identification Number (VIN) of each car that they look at to make sure that it is safe to drive. Even if the car is not subject to a recall, its owner may have decided to put it back on the road after a crash. Consumers should always double-check with car owners that the vehicles they are renting have not been in any accidents recently. Services like CarFax, Experian’s Auto Check or the National Insurance Crime Bureau’s VinCheck allow you to see if a vehicle was reported as having been flooded or salvaged.
Consumers should be careful before engaging in peer-to-peer car-sharing because there are complex legal liability issues that come with driving other people’s private cars. For example, these issues have prompted both Turo and Getaround to stop operating entirely in the state of New York.
Car owners looking to rent out their vehicles should also carefully read any agreement they enter into with either of these platforms, as they should be aware of what coverage the app provides and how that coverage interacts with their personal insurance. New York’s Department of Financial Services released a warning for car owners that encouraged them to understand the implications car-sharing may have on their personal auto insurance policy.
While peer-to-peer car-sharing may seem like a viable renting alternative to you, it is important that you understand your rights and responsibilities before using it. Each network has different policies and terms for consumers and car owners. You should contact your insurer before listing your car on a sharing network or driving a car offered through a car sharing network so that you understand your liabilities and financial responsibilities. For more information on auto insurance, visit the Division of Insurance’s website. Visit our blog for more information about traditional car rentals.
