skip to main content
Back to Top
Apr 19, 2013

Things to Think About When Lending Out Your Car

Lending out your car to family or friends is second nature to many of us.  We lend our vehicle to our loved ones so that they can run errands, for emergency and or social and recreational purposes. We do this, often times, without a moment’s hesitation. Given the unpredictable nature of motor vehicle collisions, however, an act of good will can sometimes end tragically both in human and financial terms. As such consider the following issues before lending out your vehicle:

Your insurance will be responsible for covering an at-fault accident – even if the person driving your vehicle has his or her own car insurance, under most policies, if the driver of your vehicle was at fault, it is your insurance that is affected. This means that your insurance premium could sky rocket, and you would be responsible to pay for their car accident.  This could impact your relationship with the friend or family member who borrowed your car.

You would be held personally responsible to compensate a third-party’s bodily injury losses should they exceed your liability coverage – while most automobile liability policies cover $1,000,000.00 worth of damages, some liability policies only provide for $200,000.00 in liability coverage.  Should a third party’s injuries exceed your liability coverage, you would need to hire a lawyer as you would personally be on the hook for the amount of damages that exceeds our liability coverage.

Someone needs to be responsible if there are damages – sometimes you lend your car to someone and it comes back with damage that you weren’t aware of.  We rarely take careful inventory of every little ding or scratch before we lend out our vehicles. However, upon return of the vehicle you may notice minimal damage and the awkward question of who is responsible for the cost will arise.

Your car could be impounded if they drive irresponsibly
–when a driver exceeds a certain speed limit the potential exists for the vehicle to be impounded. A speeding ticket will never impact your insurance, but in extreme scenarios, you could temporarily lose your vehicle as a result of the driver’s failure to obey the rules of the road.

The above list is by no means exhaustive. However, they are subjects that most people don’t discuss with a loved one prior to letting them take the car. Not discussing these issues beforehand means that friction could ensue should one or more of these situations occur. As such, it is important to carefully consider the pros and cons of letting someone borrow your car; limit it to a licensed driver that you trust; and try and ensure that it is not a regular occurrence to reduce the likelihood of an incident.


1280 Finch Ave. West, Suite 200
Toronto, Ontario
M3J 3K6, Canada


Toll Free:1-877-633-1065
Phone: 416-633-1065
Fax: 416-633-9782