New scheme lets drivers make £550 a month by hiring out their lease car

Wednesday, 25th November 2020, 4:30 pm
Updated Wednesday, 25th November 2020, 4:30 pm

A new car finance scheme could allow motorists to make up to £550 a month renting their car out to other drivers, according to its creators.

As figures reveal that more than a third of drivers regret taking out car finance due to the pressure on household budgets, the lease and share finance deal claims to offer them a way to balance the books by joining a car-sharing programme.

Most car finance agreements include a clause banning customers from sub-hiring the vehicle to anyone else but the new deal being trialled by Karshare allows the agreement holder to hire out their vehicle to other approved drivers.

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The scheme works in a similar way to traditional community car sharing schemes but rather than using vehicles controlled by a single fleet operator, it uses customers’ cars and makes them available to other vetted drivers.

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Karshare says the industry-first agreement created with its leasing partner could help drivers to reduce the burden of their finance payments by putting the car to use when it would otherwise be sitting idle.

Around a million cars a year are purchased via some form of finance, with 12.5 per cent of those leased. According to Karshare research, car finance is among the biggest financial concerns for 61 per cent of drivers, with four in 10 losing sleep over money worries and a similar proportion reporting a drop in their income since the start of the Covid-19 pandemic.

Graeme Banister, partnerships director at Karshare, said: “The pandemic has galvanised consumers into becoming laser focused on their finances. Cars present significant costs for many; the monthly car finance, fuel, maintenance – it’s an expense that is being called into question, particularly at a time when people are working from home more, and are likely to be for the foreseeable future.

“The fact 600,000 consumers chose to freeze their car finance payments during the pandemic only adds further weight to the call for action to help consumers offset these costs in some way - and avoid unnecessary vehicle repossessions.”

Banister concludes: “Shared vehicles are also part of the solution to a more sustainable future. Clogging up roads with yet more cars that sit idle for 96 per cent of the time makes no sense. Sharing vehicles with others, so they can access a car as and when needed, is far better for the environment.”

The scheme, which allows drivers to rent and book cars online and access them with keyless technology, is currently being trialled in Bristol ahead of a nationwide roll-out in early 2021.