With the price of fuel more than R21 per litre and people increasingly returning to work, carpooling can be a good way to cut costs. It has the added benefit of helping you reduce your carbon footprint while relieving some of the boredom that comes with being stuck in traffic alone.
What’s more, if you are willing, apps like CarTrip and Ugomyway can help you offset some of your running costs by allowing you to share rides with people travelling in the same direction as you. There are several benefits to carpooling, but it is important to understand the effect this can have on your car insurance.
So, before you hang up your car keys, decide which carpooling setup works best for you:
- Specific driver carpool: In this case, there will be a designated driver and car, and passengers pay a weekly or monthly rate towards costs like petrol, parking, and maintenance. It is recommended that this amount should not exceed the South African Revenue Service (SARS) reimbursement travel allowance, that is, no profit is made. Passengers will be unable to claim from you for bodily injury in the event of an accident but can claim from the Road Accident Fund.
- Alternating carpool: Here everyone takes turns to drive with their own car on a daily, weekly, or monthly basis. Simply put: when you drive, you pay. When you ride, it’s free. As with the previous example, passengers will be unable to claim from you for bodily injury in the event of an accident and will have to claim from the Road Accident Fund.
- Side hustle carpool: With apps like Carpool, you could use your car to earn some money on upcoming trips by accepting cash from strangers to share a ride with you. This should not be done with the aim of making a profit and it is recommended that the fares you collect should not exceed the SARS reimbursement travel allowance. Passengers will be unable to claim from you for bodily injury in the event of an accident but can claim from the Road Accident Fund.
- Employer carpool: Some employers offer staff the use of company vehicles to encourage carpooling. Employees would then pay a fare to cover petrol, insurance, and maintenance costs.
Find the best fit for you:
Whichever carpooling scenario you choose, it’s important to let your insurer know if anything changes in your regular driving set-up as this can affect insurance claim excesses and payouts.
If money changes hands, things can get more complicated too. It could be seen by an insurer as a commercial transaction. You would then potentially need business insurance or a special permit.
- Steyn is the underwriting manager at Santam
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