NEW YORK (MainStreet)The emerging trend of car sharing may be replacing the average person's need to purchase an automobile. In fact, the used car industry saw a decline of 3.4% in purchases in the first half of 2013.
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Nearly 19,000,000 used cars were sold in the U.S. through the first six months of the year, down from 19,666,671 during the same period in 2012, according to Edmunds.com 2013 Q2 Used Car Market Report.
"These trends suggest that the used car market continues to be driven by lease returns and vehicle trade-ins," said Edmunds.com Director of Used Car Analysis Joe Spina.
Over time, the emerging collaborative consumption movement (a.k.a. "the sharing economy") may be replacing the average person's need to purchase a vehicle as the humanitarian concept of sharing access to resources catches on.
"People are moving towards viewing a car as a tool or commodity for transportation versus something personal like it was 20 to 30 years ago," says Kevin Petrovic, founder of FlightCar.com, a car sharing company that services airport travelers. "They aren't attached to their car so much anymore. It is a result of the Internet and people becoming more open."
Launched in January 2013 at San Francisco International Airport with co-founders Shri Ganeshram and Rujul Zaparde, FlightCar.com is now executing 60 to 70 transactions a day where people pick up a stranger's car to rent or drop off the car they own to be used as a short term rental at the airport.
"Car sharing at the airport appeals to people because it offers free parking while you're away and you can potentially make money but because there's a limited group of people willing to share their car, Flightcar.com faces an uphill battle," said Edmunds.com Consumer Advice Editor Ron Montoya
Flightcar recently began offering services in Boston and will expand into Los Angeles International Airport (LAX) at the end of September.
"We felt that if people are willing to share their homes on Airbnb.com, why wouldn't they share their cars at the airport," Petrovic told MainStreet.com. "Lots of people use Airbnb.com becauase they find it more interesting to stay with a local than in a hotel and then there's a demographic that uses Airbnb, because it's cheaper. The same is true for FlightCar."
While Edmunds.com conducted an informal survey on Facebook and found that most of its readers wouldn't share their car if given the opportunity, Montoya can think of plenty of reasons not to share a car with travelers or tourists.
"Despite the upside of earning money, the average person doesn't feel comfortable with other people driving their car," Montoya told MainStreet. "I wouldn't want anyone treating my car like a rental car because many people don't treat rental cars like their own. There's too many unknowns for me."
At San Francisco International Airport, a basic compact car rents for $29 while a newer luxury SUV rents for $75 a day. The owner of the car can earn $10 to $20 a day and more for loaning a luxury car.
"We check driving history to ensure we're working with a certain standard of driver, which facilitates the owner's peace of mind because we do that screening," said Petrovic. "We cover scratches and dents if the owner's car is in an accident. If there's damage, the owner chooses where the car is repaired and we give them a loaner car while it's getting fixed."
Mandated by their insurer, Flightcar.com doesn't rent to drivers that have more than three minor violations, such as a speeding ticket, in three previous years and permits no major violations like running a red light or driving while under the influence (DUI).
"Car sharing tends to be more popular among young people because they'd rather spend their money on new technology than buy a car," said Montoya. "Owners who loan their car get to make money and not feel guilty about their car being parked while they are on vacation."
An added perk for owners is a free car wash upon returning from their travels.
"Flightcar is not for everybody. It's for people willing to try new things who are in tune with collaborative consumption," said Petrovic. "Giving away your car resonates with the younger crowd. They are the early adopters."
--Written by Juliette Fairley for MainStreet