How to Prepare a Carsharing Agreement

Use this carsharing agreement to spell out details, such as use and splitting costs, when you co-own or share a car.

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This sample carsharing agreement covers the key issues (use of the car, sharing costs, and so on) you need to consider when you’re sharing a car with a neighbor or friend. It includes a section (Termination) on the options you’ll consider when one of you wants to end car sharing. When and if you end your carshare, make sure that you transfer title to the remaining owner. If you leave both names on the title, you may have to track down your former co-owner in order to sell the car later. Best to get all of the paperwork done at once.

You will want to revise this agreement if only one of you owns the car. For example, you'll need to use different language regarding insurance, as in the example below:

EXAMPLE: Catherine owns a car and shares it with Theo. They include this in the Insurance section of the agreement:

"If Theo is involved in a car accident, he agrees to indemnify Catherine for any accident-related costs not covered by Catherine’s insurance policy. If Theo is partially or completely at fault in the accident, he will pay the insurance deductible and any increase in insurance premiums. If Theo is not at fault in the accident, Catherine and Theo will split the deductible and any increase in insurance premiums.

If Catherine is involved in a car accident, she will pay for all accident-related expenses, except, if Catherine is not at fault in the accident, Theo will pay for half the deductible and any increase in insurance premiums."

It’s a good idea to have an attorney review your carsharing agreement to make sure you’ve covered all key issues.

Sample Carsharing Agreement for Two Owners

This agreement is between Catherine Love and Theo Dancer, who agree as follows:

We agree to share ownership and use of a 2007 Toyota Camry, VIN#: 97233lksfd9f7f, ("the car").

Transferring title: Within one (1) week of signing this agreement, Catherine will transfer title of the car from her name to both of our names, "Catherine Love and Theo Dancer, as tenants in common." Theo will pay all taxes and title fees related to the transfer.

Ownership of the car: In consideration for 50% ownership of the car, Theo will pay Catherine $4,150, which we agree is half of the current Blue Book value of the car.

Accessories: We agree that the following accessories in the car will remain Catherine's separate property: the roadside emergency kit and the steering wheel locking device.

Parking: We will keep the car at Theo's apartment on Sluggage Street.

Use of the car: Catherine can use the car on Sundays, Mondays, and Tuesdays, and Theo can use the car on Wednesdays, Thursdays, and Fridays. We will take turns using the car every other Saturday. We may from time to time negotiate a new schedule. If either of us needs to use the car on a day when the other person is designated to use the car, that person may ask the other for permission to use the car. The person to whom the car is designated may refuse without giving a reason.

Long trips: Unless we agree otherwise, if one of us wants to use the car for a trip longer than three days, that person will rent a car for the other to use on the days the other normally would have had the car.

Decisions: We will both take part equally in decisions related to the car. Neither of us will agree to sell, encumber, or make expensive repairs or improvements to the car without the other's permission. If we cannot reach an agreement about any matter pertaining to the car, we agree to discuss the issue with the help of a mediator.

Responsibilities: We will each be equally responsible for filling the gas tank and keeping the car clean. Catherine agrees to take the car for regular maintenance.

Rules: Each of us agrees not to lend the car to anyone without first discussing it with and getting permission from the other. We will never lend the car to an unlicensed driver. Smoking is not allowed in the car.

Costs: We will divide all insurance, registration, maintenance, and repair costs equally. We will each keep our receipts in separate envelopes in the glove compartment. Every three months, we will add up our costs and reimburse each another for any differences in expenses. Each of us will pay for the gas we use. Rather than keep strict records of our mileage and gas expenses, we will try to buy gas in rough proportion to the number of miles we drive. The car gets about 30 miles per gallon.

Insurance: We will carry an auto insurance policy with the following company: Our policy will cover up to 
$500,000 per victim, $1,000,000 per accident, and $50,000 for property damage. Catherine will be listed as the primary driver and Theo as a secondary driver. We will each pay half of the insurance premiums. If one of us receives a speeding ticket or does anything to mar his or her driving record, that person will be responsible for any increase in insurance premiums that result. If the insurance company deems that the car is "totaled" and pays us to replace it, we will split those proceeds.

Indemnification: If one owner is involved in an accident for which that owner is partially or completely at fault, that owner will pay any insurance deductibles, and will indemnify and compensate the other owner for any expenses related to the accident that are not covered by insurance. That owner will also pay for any increases in the insurance premium rates.

If one owner is involved in an accident for which that owner is not at fault, owners will each pay half of the insurance deductible (if applicable), any costs related to fixing the car, and any increase in insurance premiums. Any other costs related to the accident, such as medical bills, will be paid by the owner involved in the accident.

Dispute resolution: If a conflict or dispute arises that we are unable to solve through discussion, we agree to attempt to resolve the dispute through mediation. We will seek to mediate through Los Alamos Community Mediation.

Termination: If one of us wants to stop sharing the car, we will consider these options in the following order: (1) the other owner will keep the car and pay the departing owner half of the Blue Book value of the car at that time; (2) the departing owner will keep the car and pay the remaining owner half of the Blue Book value of the car at that time; or (3) we will sell the car and split the proceeds.

Name:_________________________________

Address:_______________________________

______________________________________

Date:___________

Name:_________________________________

Address:_______________________________

______________________________________

Date:___________

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