Insurance When Putting Your Car Up For Sale

A question for all of you who have sold your cars yourself.

How does the insurance arrangement goes when you are putting your cars up for sale, and how do you make sure the prospective buyer test driving your car don't crash it?

I know I need to check their driver's license. But is it a good idea to collect $500 security to be returned on safe completion of test drive, maybe have them sign a paper saying they are fully liable if they crash the car during test?

Hmmm... Never thought of that.

I dont think there is an insurance you can buy to cover that.

I've sold various cars of the years, but most of them were insured under my name when we went for a test drive.

I had assumed that similar to lending your car out to a friend, you assume the risk.

The only time I was even slightly worried was when some highschool kids wanted to test drive my RX7.

Speaking as a buyer, I would never leave someone with a deposit just for a test drive. I usually dont carry cheques, and I definitely dont walk around with $500 in cash.

I did go for a test drive once, when the guy did not have insurance, and would not let me drive it. He drove us up and down a paved alley behind his apartment, but that was it. I passed on the car.

If there is a "solution", I would be interested too.

tdk.

Your insurance should cover your vehicle regardless of who is driving it but you should ask your agent to be sure. As for test drives… I recently sold a truck and had several people test drive it, I went along each time.

I suggest you meet the prospective buyer somewhere other then your house… Say a parking lot of a business during well lit hours…

I had all sorts of people calling me at all hours day and night… Be prepared for that… In the end I sold the truck for 2 to 3k more then any dealer would have given me.. It only took 2 weeks!

What if your residential worrier still feels uneasy about the risk in allowing strangers to test drive your car? Any way to minimize these risks?

Is it possible to not involve my own insurance on a car that is to be sold? For example setup a separate short term insurance just to cover the car while it's on the market regardless who is behind the wheel?

I have older cars and I let them test drive, but I always go with them. As far as insurance - no coverage during a test drive for prospective buyer, just for me.

As soon as I sell it, I do the DMV release of liability form and send that in the mail. In order to get the car registered in the new buyers name, they have to show DMV proof of insurance.

I have done that by contacting my insurance agent and he has FAXed me a proof of insurance paper for the DMV.

Anyone who 'test drives' my car for sale must have current collision insurance. Imagine they test drive your car, total it, then just say 'Sorry' and walk away. I suppose you can say someone stole your car from a parking lot while the engine was running

I demand to see the card, take a pic of it ( and sometimes call the insurance company to be sure the card isn't a phoney ), before they can drive. No insurance, no drive.

BTW, I'm not too sure about YOUR insurance covering another unrelated driver of your car. Check with your policy before you let that happen. I believe the driver is always responsible, regardless of who owns the vehicle.

Anyone who 'test drives' my car for sale must have current collision insurance. Imagine they test drive your car, total it, then just say 'Sorry' and walk away.

 

Any other persons collision policy will not cover one dime of your vehicle. Any other person liability insurance will not cover damage done by your vehicle while they are driving. The only exception is if that person steals your vehicle. Talk to your insurance company… Basically you insure your vehicle ie the reason the insurance company needs the car VIN… Not the person driving it.

You are insuring against damages caused by your vehicle not by you!

As for the OP obtaining a second policy that probably wouldn't gain you much.. You would be paying for two policies. If anything did happen you bet you each insurance company would be QUICK to point the finger at the other and try to deny coverage. Your best bet would be to speak with your insurance company and see what they suggest…

All of this varies from state to state..

Any other persons collision policy will not cover one dime of your vehicle. Any other person liability insurance will not cover damage done by your vehicle while they are driving.

That just doesn't sound correct. If I rent a car from Hertz, Alamo, etc. and I wreck the car, they ( or their insurer ) will indeed go after me for damage to their vehicle. I'm posting this to a legal forum to see what the general law is on this, but my suspicions are: The person driving the vehicle is liable for damages..not the owner of a car.

 

I know for a fact that MY policy covers me not matter what car I am driving: my car, my friends car; a rental car; etc.

Any other persons collision policy will not cover one dime of your vehicle. Any other person liability insurance will not cover damage done by your vehicle while they are driving.

That just doesn't sound correct. If I rent a car from Hertz, Alamo, etc. and I wreck the car, they ( or their insurer ) will indeed go after me for damage to their vehicle. I'm posting this to a legal forum to see what the general law is on this, but my suspicions are: The person driving the vehicle is liable for damages..not the owner of a car.

 

I know for a fact that MY policy covers me not matter what car I am driving: my car, my friends car; a rental car; etc.

I think rentals are a little different when it comes to insurance, since you sign a binding contract when you rent. There is no contract when someone test drives a car.

 

 

I think rentals are a little different when it comes to insurance, since you sign a binding contract when you rent. There is no contract when someone test drives a car.

 

The rental car is not a good example because its merchant/consumer. This problem is more of a risk of loss.

There are many unwritten contract of reasonable expectations in life. They are as binding as written contracts. For example, I 'lend' you my car, free of charge, to determine if you would like to purchase it. You agree to return the car in the same condition, less reasonable wear & tear. That is the unwritten contract. It is binding and reasonable. If you break it, you buy it. If you don't have the money to buy it, you better have a 3rd party ( insurance ) to pay for it. Otherwise..I'M the one SOL. Therefore, I make sure any test drivers of My cars have valid insurance.

BTW I'm no damn attorney, but took 6 law classes in undergrad. Contracts, Agency, Torts, UCC, etc. Yuck.

I think that if you lend your car to someone for a test drive;

1. Your insurance policy probably does not cover them.

2. Their insurance policy does not cover your car.

3. If anything happened they can just walk away - you are stuck with the loss.

4. It would be difficult to prove them responsible, if it is their word against yours. They say the dent, scratch, malfunction, etc. was there prior to the test drive. You disagree and say they caused it. File a claim and go to court and pay court fees??