"A friend has asked me to borrow my car and I'm wondering about the implications of lending them my vehicle. Is this a bad idea?"
We hear this all the time from our clients, and we unserstand that it can be tough to say no – but there are a few things to consider before you say yes.
When you lend your vehicle to another driver, you're also lending them the insurance and the good driving record you've established with your car or truck. Because of that, it's well worth taking some time understanding and asking questions before lending out your vehicle.
Make sure you know what kind of driver they are, how long they've been driving and whether anyone else will be using your car. Also, you want to ensure that anyone driving your vehicle has a valid license and is legally allowed to drive.
If not, what happens?
If they're not a licensed driver, then there's a possibility that the insurance policy attached to the car won't respond to a claim, and that means the owner of the vehicle may be responsible for damages and injuries sustained in that accident.
The financial risk can also be fairly serious, if they are involved in an accident it will likely affect your own insurance premium. So if you've kept a good record and kept your premiums down, suddenly someone else's accident is driving up the cost.
If an individual is driving your car on a somewhat regular basis, and especially if they live in the same household, you should contact your insurance company so they can decide if an additional premium applies. Withholding this information could invalidate your coverage.
As the vehicle owner, you'll be on the hook for any parking tickets incurred while your vehicle is on loan; however, traffic offences such as speeding go against the actual driver's record. In an extreme case, if a vehicle is impounded under Ontario's speeding laws with regard to street racing, the vehicle owner would have to pay and spend the time to recover the vehicle.
In closing, when lending your vehicle, your insurance and driving record are also on loan and you're essentially taking responsibility for whatever happens. Make sure to ask questions, and make sure you know how, when and by whom it's going to be used in order to make an informed decision.