Auto Outlook: OnStar to let subscribers rent peer-to-peer GM vehicles

By AL SWANSON  |  July 22, 2012 at 5:30 AM
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RelayRides is partnering with General Motors to offer national car sharing rentals of GM vehicles equipped with the OnStar communications system.

OnStar has about 6 million subscribers and the program with RelayRides will allow owners of GM vehicles to rent them out for an average of about $10 an hour.

The vehicle owners will supply the gasoline and set the rental price and RelayRides will provide $1 million in liability insurance for the owner and $300,000 for the renter in exchange for 40 percent of the rental fee.

Some insurance companies don't like the idea of private owners renting their vehicles to the public so vehicle owners should review their policies for liability in the event of a catastrophic accident.

RelayRides founder Shelby Clark says the company could help vehicle owners meet expenses and earn extra money from their cars when they normally would be parked. The company has operated peer-to-peer rentals in Boston and San Francisco since 2010 and went national in March, adding cities like Los Angeles, New York, Miami, Chicago and Detroit.

"Owning a car in a metropolitan area such as San Francisco or New York is pretty expensive," Thilo Koslowski, an analyst with the research firm Gartner Inc. told the Los Angeles Times.

"Urban consumers will start to embrace this, but it doesn't mean that in five years people won't be using the rental car companies or buying cars."

OnStar provides services such as navigation and vehicle diagnostics, and can automatically notify first responders in the event of an accident.

About 15 million GM vehicles have the system installed but some 9 million owners don't pay the $18.99 a month fee to use it.

Cars with OnStar activated can be found using OnStar's GPS system. The renter uses a smartphone or text messages to unlock the vehicle and retrieve a hidden key, which is left inside when the vehicle is returned.

"It's pretty cool to text a car and watch it unlock the doors," Clark told Wired News. "There are a lot of environmental and economic benefits to car sharing, but they've been constrained to certain areas."

Cars without OnStar and non-GM vehicles also can be rented but the renters have to meet the owner in person to exchange the key.

Renters can be as young as 18, but are ineligible if a background check shows they have two or more speeding violations, a speeding violation more than 25 mph over the posted speed limit, two or more stop sign or red light violations, a reckless driving citation, a driving under the influence violation or a vehicular manslaughter conviction.

Chrysler closing Detroit engine plant

Chrysler last week announced plans to idle its 13-year-old Mack Avenue Engine II Plant in September, but said the workers would be offered jobs in other plants.

The 182 UAW employees at the 650,000-square-foot Detroit plant make the company's 3.7-liter V-6 engine currently used in the Jeep Liberty and Ram 1500 pickup, which is being phased out in favor of the new 3.6-liter Pentastar V-6.

The good news is the job cuts may not be permanent.

"We'll find positions for them elsewhere," Chrysler spokeswoman Jodi Tinson told The Detroit News.

Chrysler builds a 4.7-liter, V-8 engine at the Mack Avenue Engine I plant, the Detroit Free Press said. The Pentastar V-6 engine is built at another Chrysler plant.

France: Peugeot faces concessions for state help

French President Francois Hollande has said the government won't tolerate job cuts at PSA Peugeot Citroen, which announced its intention to close a plant north of Paris and eliminate 8,000 jobs.

Peugeot estimates it can trim 200 to 250 euros ($250 to $300) off the manufacturing cost of each vehicle, with cuts, INAUTONEWS said. Hollande called the plan "unacceptable."

Prime Minister Jean-Marc Ayrault said the planned job losses were a "shock" and asked Peugeot, France's No. 2 automaker, to get together with its unions "without delay," Radio France Internationale said.

The French automaker reportedly plans to sell off assets and issue $1.2 billion in new stock to raise cash after warning of an $858.2 million loss from January through June.

Auto sales have plummeted across Europe and French auto dealers ordered 16 percent fewer new vehicles to sell in showrooms in June, the BBC said.

The socialist mayor of Aulnay, where the Peugeot factory is, said 9,000 jobs would be lost by subcontractors and suppliers in the event of a closure, RFI said.

The government, which spent 4 billion euros (around $5 billion) on state aid to the country's auto industry in recent years and holds a stake in Renault, France's largest carmaker, will formally unveil a plan to jumpstart the ailing auto industry Thursday, the French newspaper Les Echos reported.

PSA Peugeot Citroen has about 80,000 employees in France.

Industry Minister Arnaud Montebourg told French radio Peugeot will have to make concessions if it expects state aid.

He said more government help "will not be granted without concessions."

Honda offers optional insurance on Fit EV

Honda is offering an unusual incentive to stir up interest in its new electric Fit -- collision insurance.

A three-year lease on the Honda EV will include all maintenance, roadside assistance, and no-deductible collision insurance for $389 a month with no down payment.

The offer is good only on the electric Fit and the Los Angeles Times estimates the free insurance could save a single male driver living in suburban Southern California as much as $600 annually. Honda plans to offer 1,100 leases for the electric version of the popular Fit subcompact now reaching dealerships.

The gasoline version of the Fit, which is slightly bigger than a Civic, can be leased for 36 months without the free maintenance, roadside assistance and collision insurance.

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