Community car sharing clubs that aim to offer a cheaper but equally convenient alternative to car ownership for people living in remote areas are under threat by huge increases in the cost of their insurance.
There are around 40 such clubs in the UK, many serving rural villages with fleets of fewer than five cars and staffed by volunteers.
Members can book a car for as little as half an hour up to several weeks. Supporters say the clubs provide a much-needed service that is affordable and convenient and which helps decarbonise a community.
Some have been operating since the 1970s, but in the past five years they have witnessed major rises in their insurance costs to the point that their viability is now under threat.
Already this year, two clubs have closed, and the future of eight more hangs in the balance. Others are anxiously awaiting renewal notices that could spell the end of the road.
Calder Valley Car Club, which operates under the name Hour Car, is one club facing the possibility of closure. Until recently, its fleet of five hatchbacks cost £6600 to insure, but at its last renewal the premium rose to £18,000. They also had an MG 5 EV but had to sell it when its premium increased to £5000.
“We increased our prices in January and have since tried everything to reduce our insurance costs,” said Java Berry, one of the club’s administrators.
“We’re in talks with insurers but keep meeting dead ends. They just say we’re a high risk and won’t help.
"It’s going to have a huge impact on local people if the club folds. Some members don’t know what they will do without it. Cars are expensive, public transport is unreliable and roads here are narrow so that even if you can afford to buy a car, it can be impossible to park it.”
Members of Derwent Valley Car Club in Derbyshire also have their fingers crossed awaiting their renewal notice. The club runs five electric cars, partly financed by the Department for Transport’s Car Club in a Box support initiative for community car sharing schemes.
Members can drive or be driven by volunteers. Now, 14 years since its foundation, the club’s future hinges on the cost of insuring its fleet.
“We’re hoping our insurer will do the honourable thing and take into account our unique position and the support we provide to the community, but we’re not banking on it,” said club founder Mick Marston.
Richard Dilks, CEO of Collaborative Mobility UK, the national charity representing shared transport organisations, said smaller community clubs are facing an “existential crisis”.
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Premiums rising threefold. Has anyone asked why?
Unless there have been a spate of recent claims, this is potentially another example of where the insurance companies need investigated or further regulated. I'm sure we can all recall examples of where companies are paying out without question. I know in my fathers case, he reversed in to a 3rd party car door whilst parking. It was only light damage, could easily have been repaired but 3rd party insurer insisted on a new door skin - which was ordered from China, which was on an 10wk back order. Despite the car being perfectly drivable and the damage was only cosmetic i.e. caused no issue whatsoever to the operation of the door ( reversed in to the car at walking pace - 3mph? ) , the 3rd party hired a VW Golf GTi to replace their door-damaged MG. The cost of the repair ended up at over £4000
We highlighted to our insurer the cost should have been no more than £500 tops to repair and this could be fraud but they weren't interested because it costs more to investigate further than pay out.
The insurance industry is rotten to the core - heads they win, tails we loose.
You're spot on. These "claims management" companies need to be put under the microscope too, as they always provide up-market courtesy vehicles unnecessarily and then bill the insurance companies, which bumps all the premiums up. I was watching something on Youtube recently by a paintless repair technician, its almost magical what they can do with damaged panels, without all the waste and cost of replacement or repainting. He said they'd tried to get the insurance industry interested in these techniques more but weren't being listened to.
Unfortunately, as with Ofwat, Ofgem et al, government regulators seem to be totally pathetic and disinterested when it comes to the interests of the consumers, so I'm not expecting anything to change anytime soon.
100% agree. I recently had my wing mirror knocked off by a truck (thankyou dashcam and he tried to blame me, quickly went quiet when I sent video to insurers). However the insurers almost forced me to get me to have a hire car (via a third party making money on the hire) and it was 8 weeks to get a wing mirror! I said no, I'd stick with mine and temp mirror from the body shop. Did I get ANY credit from a red telephone logo insurers for saving them hundreds/thousands in hire costs? Nope. They increased my no fault claim policy by 20% !! I have switched!
Only seemed like yesterday people were harping on about private car ownership coming to an end, everyone banging on about cars losing thousands whilst sitting on their owners driveway. oh well I'm sure they were well meaning.