A new car sharing service dubbed a cheaper alternative to car ownership is expected to launch in Hamilton next month.

Hamilton City Council has entered a three-year trial with Loop, owned by large Waikato car dealer Ebbett, to support the new pilot car share scheme that allows people to rent a car by the minute or hour.

Similar services such as Your Drive in Auckland, Mevo Car Share in Wellington which uses in a plug-in hybrid Audi A3 and electric car share firm Yoogo in Christchurch are already running in other cities. City Hop also operates in Auckland and Wellington.

The scheme enables people to download the app to find the closest available car to rent for short periods of time, such as minutes or hours.

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Hamilton City Council infrastructure operations general manager Eeva-Liisa Wright said the new scheme would provide a low cost and convenient alternative to private car ownership.

The service is being run by Loop and the council had earmarked 14 car parking spaces around the edges of the city centre for the company's exclusive use free of charge.

Wright said the car parks were ones that were generally lower use and the council did not expect to have any significant impact on parking supply in the city or on neighbouring businesses.

As well as the public car parks, the company would also use some private car parks.

The trial is expected to start in June 2019 once signage had been put up and the car parks had been re-painted to indicate they were dedicated car share spaces.

Wright said the pilot would be reviewed over the three year period to assess its performance, impact on city parking availability and whether members of the public were using it.

Hamilton City Council chair of growth and infrastructure Dave Macpherson said after one year council would also assess whether it would charge Loop for the car parks.

He said car sharing had the potential to ease traffic in the city, reduce its carbon footprint and supported social inclusion by giving people more affordable access to cars and reducing the need to own one.

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"It also makes sense as car share supports the council's Access Hamilton Strategy by providing further options for transport choice in our city."

Macpherson said it was his understanding the cars would be Volkswagen Golfs and run on petrol. However, the company was considering switching to the more expensive electric vehicles at a later stage.

The hourly rental fee was $15 an hour, $75 for 24 hours and $30 to take overnight, according to Loop's website. There are additional charges if users exceed 150km in a 24 hour period.

Users can download the app to their phones and are required to provide a driver's licence and credit card details. Cars can be reserved up to 30 minutes in advance.

Macpherson defended not putting the scheme out to tender to other operators because the company had approached the council. It would likely go out to tender after the trial period.

Lime Scooters are also in the process of rolling out in Hamilton and were also expected to launch in the city in the next few months, Macpherson said.

Loop declined to comment at this stage.