Is it OK to Lend Your Car to a Friend? 6 Important Things to Consider


You and your friends probably share a lot. But, should this include your car? You may have a hard time saying no to your friend but lending your vehicle to them is something you need to think about carefully.

Your vehicle is probably one of your most valuable investments, and you want to keep it safe. Most people are under the impression that lending a vehicle to a friend is only a matter of trust.

However, it is a lot more complicated. Here are a few essential things to consider before making a decision. 

1. Liability for Car Accidents

When a friend is using your car, they may be exposing you to various liabilities. You face these liabilities even when you aren’t in the driver’s seat. Your car insurance is for your vehicle, not for you or anyone else driving it.

If your friend gets into an accident while driving your car, you are liable. Your insurance will cover the resulting damages according to the terms and conditions. You are also responsible for the deductibles.

 The accident might affect your premium payments even if your friend wasn’t at fault. After the accident, you’ll remain responsible for the damages and cost of auto accident legal advice. Some insurance policies don’t cover you if a third party gets into an accident with your car. 

2. Your Driving Reputation

When a friend borrows your car, they put your driving reputation on the line as well. They may get a fender bender, parking ticket, or severe collision. Whichever way, their actions may taint your clean record.

You’d be wise to consider your friend’s driving skills before lending them your car. If you already know that they drive carelessly or have a poor driving history, it doesn’t make sense to trust them with your car. Ensure that they have a valid driving license as well. 

3. How Often Will They Be Using It?

If a friend is borrowing your car for a long time, find out how often they intend to use it. If they will be using it most of the time, the chances of getting into an accident are higher.

Even the slightest claim under your insurance could affect your premiums and No Claim Bonus. Your car would be much safer with a friend that only wants to borrow it for a short time. 

4. Are they willing to Compensate You In Case of an Accident?

It would be irresponsible to lend your car to someone who can’t pay you in case of an accident. This is something you need to be very careful about. Even though your friend won’t be anticipating an accident, they should have a plan to compensate you in case of one.

5. How Will They be Using Your Car?

Find out what your friend needs the car for. If they have an emergency or need to run a quick errand, it may be okay to share.

However, you need to be careful if your friend is planning a road trip or ridesharing arrangement. Only lend your car to friends that need it for light use. Note that your auto insurance policy may have exclusions. 

6. Establish Clear Rules

If you are sure about lending your car to a friend, set clear rules. Essential rules to set include:

  • They shouldn’t eat, speed, or text while driving.
  • Let them spend some time in your vehicle so they can get familiar with it.
  • Ensure that they have a valid driver’s license
  • Act like a car rental agency. Check the vehicle before and after lending it. Ensure that all critical functions are in good condition.

Many people lend their vehicles out to friends without a second thought. However, this is a mistake that can have serious financial implications. Before handing over your keys next time, be sure that it is a risk you want to take.

Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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