What are the legal and insurance implications of car sharing?
Created by: Kyle Risi
The Public Passenger Vehicle Act (1981 Section 1(4) outlines the rules that govern car sharing. Passenger contributions should be arranged before travel and should not exceed the running costs (including wear and depreciation) of the vehicle for the trip. Liftshare calculates a suggested price per passenger for your journey based on the length of your trip and using HM Revenue and Customs Approved Mileage Payment Allowance.
In most countries, insurers state that car sharing will not affect an individual's car insurance e.g. the Association of British Insurers clearly states that car sharing won't affect the insurance of their members so long as a profit isn't made: "All ABI motor insurers have agreed that if your passengers contribute towards your running costs your insurance cover will not be affected, as long as lifts are given in a vehicle seating eight passengers or less. This agreement does not apply if you make a profit from payments received or if carrying passengers is your business" (Source: ABI 2012)
Over 300 insurance providers are members of the ABI, accounting for about 95% of the motor insurance market in the UK. Drivers with any concerns, however, should check with their own insurance company as terms and conditions may vary between insurance providers over time.
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