Funding boost for money-saving car clubs

29 July 2014

Car clubs are in line for a £500,000 cash injection from the government to encourage more widespread use.

The funding will support two pilot schemes yet to be announced, but the Department for Transport (DfT) told Moneywise an existing scheme promoting the use of electric cars could be one beneficiary, while the other will be a newly-launched scheme.

The DfT now plans to consult the industry and will discuss the feasibility of setting up a rural scheme. It hopes both pilot schemes will be in place by next summer.

There are several different types of car club. The likes of Zipcar and CityCarClub are effectively pay-as-you-go car hire firms, which allow members to book a car parked nearby and use it for a set period before returning it to another stipulated parking bay.

Then there are car-sharing clubs - sometimes called lift-sharing clubs – where commuters are matched with others making similar car journeys and they travel together to split petrol costs. Websites offering the matching service include, while the AA operates such a scheme for its staff.

Reducing pressure

Ian Crowder, spokesperson for the AA, told Moneywise: "The majority of insurers would not raise any objection to practices such as this. This not only has the potential for saving on costs but also reducing pressure on car parking spaces and helping to relieve traffic on busy roads. They're popular in Germany and Switzerland where there are special car parks for such schemes."

He added that AA car insurance covers drivers for car-sharing and allows them to earn money towards petrol costs as long as they don't make a profit.

The final type of club works differently again. Car owners can simply rent their cars to other motorists, with members setting the rental fee themselves. Insurance is covered by the car club. The most well-known club of its type is easyCar Club, backed by the company behind easyjet.

How much money can be saved or made varies by type of club. CityCarClub says members who drive less than 8,000 miles a year can save up to £3,500 annually in insurance, tax, MOTs, servicing, fuel, repairs, depreciation and parking. Zipcar says its members can save more than £300 each month compared to the average cost of owning and operating a car in a busy city environment.

Meanwhile, easyCar Club says its members stand to make £250 or more a month from regularly renting out their vehicles.

All clubs help to ease traffic and cut carbon emissions, with Zipcar stating the each one of its vehicles takes six personally-owned vehicles off the road, while CityCarClub says each of its cars takes 24 individual cars off the road.

Zipcar puts the petrol consumption saving at 829 litres of petrol per head a year – with current fuel prices hovering around 131.12 pence a litre, according to the AA's latest figures, that's an annual saving of just under £1,090.


Transport Minister Baroness Kramer said: "Car clubs cut congestion, reduce carbon and save people money while still giving people the freedom and flexibility to use a car when they want to. Interest in car clubs is already gathering pace and we want to give that interest added momentum.

"This funding will highlight their many advantages to even more people and help take car clubs up a gear."

James Finlayson, managing director of CityCarClub, added: "With government backing we hope more people will come to realise the benefits of car clubs. With this kind of support we can continue to fight against unnecessary congestion, pollution and in a lot of cases expense to motorists."

The DfT added that the proportion of carless households has been growing across the country since 2005 and that there are now more than 150,000 car club members in England. It already funds 48 car club and car-sharing schemes throughout the country.

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