Across the UK, community car schemes quietly keep people connected. They get an older neighbour to a hospital appointment, help someone living with a disability reach the weekly shop, and offer a friendly face to people who would otherwise be stuck at home.
If your local bus service has thinned out and you are wondering how to set up a community car scheme to fill the gap, this guide walks you through the practical steps, the legal position, and the responsibilities you take on as an organiser.
These services go by several names. You may see them referred to as a community car scheme, a voluntary car scheme, or a volunteer car scheme. The terms describe the same idea: a not-for-profit service where volunteer drivers use their own cars to provide pre-arranged, door-to-door journeys for people who cannot easily use public transport. Throughout this guide, we use the terms interchangeably.
Key takeaways
- A community car scheme is a not-for-profit service in which volunteer drivers use their own cars to carry passengers who cannot easily travel another way, reimbursed only for their running costs.
- Schemes using ordinary private cars do not normally need a Section 19 permit or a private hire licence, because they operate under the car sharing rules in the Public Passenger Vehicles Act 1981.
- Volunteer drivers can be reimbursed tax-free under HMRC Approved Mileage Allowance Payments. From 6 April 2026 this rose to 55p per mile for the first 10,000 miles, then 25p, the first change since 2011.
- Drivers should tell their own motor insurer they are volunteering. Insurers signed up to the ABI Motor Insurance Commitment do not charge extra for this.
- Drivers who regularly take vulnerable passengers to and from healthcare may be eligible for an enhanced DBS check. The role, not the person, decides what level applies.
- You handle sensitive personal data from day one, so UK GDPR compliance, secure record keeping, and a move away from loose paperwork should be built in from the start.
What is a community car scheme?
A community car scheme is a not-for-profit organisation, usually run by volunteers, that arranges lifts for people in the local community who have no suitable transport of their own. Volunteer drivers use their own vehicles and are reimbursed for their expenses.
A coordinator takes bookings and matches each request to an available driver, who then provides a door-to-door service. Journeys typically cover essential trips such as medical appointments, shopping, collecting prescriptions, or visiting friends and family, and some schemes add extras like befriending or prescription pick-ups (Somerset Council).
The people who rely on these schemes are often older, living with a disability or mobility difficulty, or living in a rural area where bus routes are sparse or non-existent. For them, a car scheme is not a convenience. It is the difference between reaching a hospital appointment and missing it.
Your Guide: How to Setup a Community Car Scheme:
Step 1: Establish the need
Most voluntary car schemes start reactively, as a response to a withdrawn bus route or a gap that residents keep mentioning. Even so, it pays to gather clear evidence before you commit time and money. Funders will expect it, and it helps you design the right service rather than guessing (Community Transport Association).
- Map what already exists locally: bus and train times, taxis, dial-a-ride services, and any other car schemes nearby.
- Talk to people who see the gaps every day, such as GPs, social prescribers, parish councillors, and local charities.
- Set out who needs transport, where they need to go, and how often, so you can measure the demand rather than assume it.
If a similar scheme already operates next door, it is often easier to extend or partner with it than to start from scratch.
Step 2: Form a group and choose a structure
A scheme runs more smoothly when responsibility is shared rather than resting on one willing volunteer. Pull together a small working group that reflects the community, including potential drivers, someone with finance experience, and ideally a contact at the local authority. This group becomes your management committee or trustee board.
You then need to decide on a legal structure. Many car schemes begin as an unincorporated association with a simple written constitution, which is quick and low cost. Others register as a charity or a Charitable Incorporated Organisation, which can offer limited liability and open up more funding, but brings reporting duties with the Charity Commission.
There is no single right answer, and the best choice depends on your size, your income, and how much risk the people running it are willing to carry personally. The CTA can help you draft terms of reference and a constitution.
Step 3: Understand the legal position
This is the area where well-meaning guides often get muddled, so it is worth being precise. Normally, any organisation that accepts payment for carrying passengers must hold a Public Service Vehicle operator licence or a private hire vehicle licence.
Section 19 and Section 22 permits, issued under the Transport Act 1985, are an exemption from that rule, but they apply to minibuses and buses adapted to carry nine or more passengers, not to ordinary cars (GOV.UK).
A car scheme that uses volunteers' own private cars sits in a different and simpler place. It operates under the car sharing provisions in section 1(4) of the Public Passenger Vehicles Act 1981.
Car sharing is exempt from the permit requirement, provided the journey is pre-arranged, the payments collected do not exceed the running costs of the vehicle, and the service is not run with a view to profit. In short, a standard volunteer car scheme using private cars does not need a Section 19 permit or a PSV operator licence.
The Department for Transport has also made clear that, in most cases, volunteer drivers should not need a private hire vehicle licence, recognising the social value of the work and the fact that reimbursement at HMRC mileage rates is not a commercial profit (GOV.UK private hire guidance).
The key boundary to respect is the running costs limit. Once a driver is paid more than the cost of the journey, you risk stepping outside the exemption.
Step 4: Sort out insurance
Insurance is where many new schemes feel anxious, but the position is straightforward once you know it. A volunteer driver's own private car insurance will usually cover voluntary driving, but the driver must tell their insurer they are doing it.
Insurers who have signed the ABI Motor Insurance Commitment do not charge an extra premium or impose a higher excess for volunteer driving, as long as any payment does not exceed the HMRC mileage rates in force at the time (Association of British Insurers).
When you enrol a new driver, ask who their insurer is, ask them to confirm in writing that they have notified that insurer of their volunteer driving, and keep a record of it. Failing to notify can leave a driver uninsured at the worst possible moment.
Drivers should also include their volunteer mileage when they declare annual mileage at renewal.
Beyond the drivers' own cover, the organisation itself should hold public liability insurance, and you should consider trustee or management committee liability cover to protect the people running the scheme from claims brought against them personally.
The CTA offers insurance guidance tailored to community transport.
Step 5: Recruit and check your volunteer drivers
Your drivers are the scheme. Recruit carefully and put a consistent set of checks in place for everyone. As a sensible baseline, for each driver you should confirm a valid full driving licence, a vehicle with a current MOT that is suitable and roadworthy, valid insurance that covers volunteer driving, and references.
Many schemes also ask drivers to complete the CTA's training and assessment for car and MPV drivers, which gives passengers and trustees confidence in driving standards (CTA training).
Do volunteer drivers need a DBS check?
This depends on what the driver actually does, not on a blanket rule. Driving a passenger to and from a place where they receive healthcare, personal care, or social work, specifically because of the passenger's age, illness, or disability, counts as regulated activity. A driver doing this with sufficient frequency is eligible for an enhanced DBS check, including a check of the Adults' Barred List (GOV.UK DBS guidance).
Trips taken purely for pleasure or recreation are excluded, and licensed taxi and private hire drivers are treated differently. Because the rules turn on the detail of the role, the safest approach is to risk assess each role, use the GOV.UK DBS eligibility tool, and document your decision.
One helpful point for budgets: there is no statutory DBS fee for genuine volunteers, although an umbrella body may charge a small administration fee.
Step 6: Set reimbursement and passenger fares
Drivers give their time for free, but they should never be out of pocket. The standard way to reimburse them is through HMRC-approved mileage allowance payments, often shortened to AMAP. Pay at or below the approved rate, and the reimbursement is tax-free, with nothing to report to HMRC.
This is one figure where older guidance is now out of date. The car and van rate had been frozen at 45p per mile since 2011, but it increased on 6 April 2026 to 55p per mile for the first 10,000 miles in the tax year, with 25p per mile after that (GOV.UK mileage rates).
Many car scheme handbooks, council pages, and even national toolkits still quote the old 45p figure, so it is worth checking the live GOV.UK rate before you set your reimbursement policy.
Passenger fares are a separate decision. Because the scheme cannot run for profit, fares should be set to cover the running costs of the service, including the mileage you reimburse to drivers. Many schemes charge a simple per-mile rate to the passenger plus a small booking contribution.
Always give passengers a receipt. If your organisation is registered for VAT there are extra considerations, so take advice on how fares are invoiced.
Step 7: Appoint a coordinator and handle bookings
Every scheme needs a coordinator, the person who makes it happen. The ideal coordinator is friendly, patient, well organised, and known in the community, because that local familiarity helps nervous passengers take the first step and book a trip.
The coordinator usually oversees four things: taking bookings, matching journeys to available drivers, keeping the finances and reimbursement claims in order, and looking after driver and passenger records.
In the early days, this can be done with a phone and a notebook, but that approach strains quickly as journeys increase. Matching the nearest available driver, checking that their records are up to date, working out fares and mileage, and producing reports for funders all take time, and all of it involves personal data.
This is the point where many coordinators look for proper community car scheme software to carry the load.
Step 8: Get data protection right from the start
From the moment you take a first booking, you are handling personal data, and a good deal of it is sensitive. You hold passengers' names, addresses, phone numbers, and often details of their health or mobility needs, which is special category data under the law.
You also hold driver records, including licence details, insurance, MOT dates, and DBS results. All of this falls under the UK GDPR and the Data Protection Act 2018, and the obligations apply whether the information sits in a database, a spreadsheet, an email, or a paper folder.
UK data protection law was updated by the Data (Use and Access) Act 2026, which is now in force, but the core duties that matter to a car scheme are unchanged. In practice, you need to do the following.
- Identify your lawful basis. For running the service, legitimate interests usually fit, supported by a short Legitimate Interests Assessment. Health and mobility data needs an additional condition because it is special category data.
- Register with the ICO and pay the data protection fee. Most organisations that process personal data electronically must pay. Charities are only ever liable for the lowest tier, currently around £52 with a small discount for direct debit, and you can confirm your position with the ICO fee self-assessment (ICO).
- Keep data accurate and only as long as needed. Set retention periods. For example, delete a DBS result once the recruitment decision is made and simply record that a check was carried out.
- Be ready to respond to people's rights. If a passenger or driver asks for a copy of their data, or asks you to delete it, you must be able to find it and act.
- Keep it secure. Limit who can see what, protect against loss or theft, and have a named person responsible for data protection.
The quiet risk of paper and spreadsheets
Paper run-sheets, address books, and spreadsheets emailed between volunteers feel harmless, but they are where data protection problems tend to hide. A run-sheet left in a car, a laptop lost on a train, or a spreadsheet forwarded to the wrong person is a real breach involving real people's sensitive information.
Paper also makes the rest of your duties harder. It is difficult to prove who has seen a record, awkward to pull together everything you hold about one person when they ask, and almost impossible to be confident you have deleted every copy when the time comes.
This is exactly the problem purpose-built software is designed to remove, and it is where bringing in a system early saves a great deal of retrofitting later.
Step 9: Launch, promote, and keep improving
Once your structure, drivers, insurance, and record-keeping are in place, let people know you exist. Word of mouth through GP surgeries, pharmacies, libraries, places of worship, and community groups tends to be far more effective than any advert, because trusted local contacts can refer the very people who need you.
Keep the booking process as simple as possible, since a first-time passenger may be anxious about asking for help at all.
After launch, the work shifts to keeping everything up to date: driver records, insurance confirmations, DBS renewals, and reimbursement claims. Good reporting also helps you demonstrate your impact to parish councils and funders, which matters when you come to apply for grants.
How Road XS supports car schemes
Working out how to set up a community car scheme is the rewarding part. The ongoing admin and the duty of looking after people's data are what wear down coordinators.
This is where Road XS earns its place.
Rather than juggling paper run-sheets and spreadsheets, your scheme works from one secure, cloud-based system. Road XS finds the nearest available driver in an instant, and only shows drivers whose licence, insurance, MOT, and DBS records are up to date, because drivers with out-of-date records are automatically removed from journey look-ups.
Built-in reminders flag records before they expire, fares and mileage can be calculated and invoiced automatically at the correct HMRC rate, and you can produce the reports funders ask for at the click of a button.
On data protection specifically, Road XS is built to help you meet your UK GDPR obligations. Access is controlled and secure, records are held in one place rather than scattered across devices, and when someone exercises their right to see or move their data, you can provide it quickly and in full rather than hunting through folders.
Drivers can manage their own availability and records through a secure portal, paper run-sheets disappear, and a downloadable PDF run sheet is still there for any driver who prefers one. The result is less administrative burden, safer handling of sensitive information, and more time spent on what the scheme is actually for: getting people where they need to be.
If you are setting up a new scheme, or moving an existing one off paper, it is worth seeing how the features in Road XS map onto the steps above.
This article how to setup a community car scheme, is provided for educational and informational purposes only and does not constitute legal, financial, insurance, or regulatory advice. Rules on permits, licensing, mileage rates, insurance, DBS eligibility, and data protection can change and can depend on your specific circumstances and location within the UK. Before setting up or running a scheme, please verify the current position with the relevant authorities and seek professional advice where appropriate. Useful starting points include the Community Transport Association, GOV.UK, the Information Commissioner's Office, your own insurer, and your local authority.
