Is it a bad idea to loan a car to a friend for the winter?
September 20, 2018 7:04 AM   Subscribe

My friend is living in Brooklyn and has a car she doesn't really use or need; my roommate (who is also her friend) needs a car for the winter. Roommate and I are in Pennsylvania. What could go wrong?

My Brooklyn friend will be here in PA about one weekend a month, and her car will definitely be safer/less of a hassle for her here, in addition to being super-useful to my roommate, who would pay my friend something like $50 a month to use it.

Is this a bad idea? Have you done something like this before? Will the insurance company be okay with it, especially considering the car and its owner will be in different states? What liability/personal consequences could arise?

I have a vested interest in this because last winter, my roommate and I shared my car (she paid me $50 a month + we split fuel/maintenance costs). It was okay but not ideal... there were definitely times I wanted/needed my car and didn't have it. Our city has notoriously terrible public transportation and roommate needs a reliable way to get to work.

In many ways this seems like a great solution, but my friend wants to make sure her bases are covered before she offers this potential solution to my roommate.
posted by gold bridges to Travel & Transportation (23 answers total)
Will the insurance company be okay with it

No. Your friend would have to at least change the garaging address of the car and add your roommate (and probably you, as someone who lives at that address) to their insurance policy as insured drivers. There are likely other insurance issues they may run into, especially with money changing hands (it is now a rental car), but those two things are a bare minimum, and will probably add more than $50/month to your friend's insurance premium.
posted by Rock Steady at 7:16 AM on September 20, 2018 [4 favorites]

A very similar question was asked a few years ago. The consensus was that it's a bad idea for a number of reasons.
posted by penguinicity at 7:18 AM on September 20, 2018 [1 favorite]

The car should have FULL insurance coverage + that will cost more than $50 per month and your roommate should pay that full price to the owner, who then pays the insurance.

This law may have changed... Insurance companies in NYS will, of course, want any driver listed on the insurance. Pennsylvania likely has a law about registering and insuring the car in state. I know the NYS insurance law used to be that the car was insured no matter who was driving or where as long as the car itself was insured and payments current. I really don’t know if that’s true any longer. I don’t know how you find out.

They would also need an agreement for repairs.

There might be apps that allow drivers to legally rent their cars to other people and that might be easier for your roommate, and/or a service these two can use to facilitate this transaction with less liability.
posted by jbenben at 7:19 AM on September 20, 2018 [1 favorite]

What liability/personal consequences could arise?

If you own a car and lend it to someone, you can be sued for damages if they get in an accident. If it's a bad one and someone is killed or badly injured in a way that requires care for the rest of their life, the damages can easily exceed what most car insurance policies will pay out.
posted by Candleman at 7:28 AM on September 20, 2018 [1 favorite]

She should call the insurance agent and explain that she'd like to keep the car in PA at a friend's house for her own legitimate reasons (holiday travel, hard parking in winter, insert-yours-here) and that the person may drive it in some circumstances (locally when needed, for trips of x length) until some specified date. Then ask if the friend should be added to the insurance and what the cost would be. I did this when traveling internationally for a couple of months, and my neighbor-friend used the car (and also kept it from getting parking tickets, towed, etc). In our case (in PA), insurance said it was fine, with no charge. An agreement for repairs is a good idea, as well as which type of maintenance and fuel/oil/fluid/tolls are covered by the rental/loan-agreement fee.
posted by zachxman at 7:29 AM on September 20, 2018 [15 favorites]

I have been the beneficiary of such an agreement in the past and a lot of the tricky questions above were solved by calling the insurance provider, as zachxman suggests. I was in the same state as the owner, so it may be more complicated here, but that’s a good place to start.
posted by lunasol at 7:36 AM on September 20, 2018 [1 favorite]

If you do call the insurance provider, and they assure you that your arrangement is fine, I would ask for confirmation of that in writing.
posted by Rock Steady at 7:43 AM on September 20, 2018 [4 favorites]

Just a quick note of an experience I had... I 'brokered' a motorcycle exchange between my brother-in-law who was abroad for school and a friend, thinking it would be a simple win-win situation. In the end, the motorcycle needed a couple of unexpected repairs and I think neither my brother-in-law, nor my friend was happy with the situation. Somehow, I ended up transmitting info between the two of them and I wasn't happy either. I probably wouldn't do this again...
posted by jazh at 7:44 AM on September 20, 2018 [3 favorites]

Even if I were the Brooklyn friend and it generally would be easier to have the car in PA, PA resident friend should definitely be paying more than $50 a month to essentially lease a car.
posted by raccoon409 at 7:54 AM on September 20, 2018 [5 favorites]

Hmmm...I just "borrowed" am friend's car for 8 months while she was out of country (we both are in WA), and their Geico guy said that they didn't have to make any changes or additions to their policy while I drove it, that it was essentially the same as loaning their car to someone for the day and you don't need to add anyone to your insurance for that. YMMV.
posted by clseace at 8:04 AM on September 20, 2018 [2 favorites]

What if there is an extremely expensive repair needed during the loan, i.e. a new transmission or engine at $4500+? The owner will always wonder if there was some (unintentional) abuse that caused it, while the borrower will feel that they were loaned a ticking time bomb.
posted by 445supermag at 8:15 AM on September 20, 2018 [4 favorites]

$50 seems low to me, as well. I understand that's the price you arrived at when you shared your car with your roommate last year, but in this case she's getting exclusive use of the car and should be compensating the owner for the full cost of overhead like insurance and depreciation. Not to mention the fact that with exclusive use of a vehicle she may wind up putting more miles on it than she did in the sharing arrangement you had with her.
posted by drlith at 8:41 AM on September 20, 2018 [2 favorites]

I think this can be done and they can still remain friends at the end of the winter, but they are underestimating the costs associated with it. If they can think of the major contingencies and pre-decide what to do about them, this will work.
posted by AugustWest at 8:42 AM on September 20, 2018

Thanks for pointing me to that older post, penguincity. Didn't see that one on search! Also, just a note that unlike in that situation, my friend's car is paid off. If that changes anything.
posted by gold bridges at 9:17 AM on September 20, 2018

This is one of those things that's totally fine and not a problem 90% of the time and then the other 10% of the time it's a friendship-destroying disaster.
posted by prize bull octorok at 9:18 AM on September 20, 2018 [18 favorites]

The rule of thumb for lending out things is that you can't expect to get them back and you have to be ok with that possibility.
posted by aniola at 9:50 AM on September 20, 2018 [2 favorites]

My anecdata: I lent my car to a friend when I was out of the country for a year. They paid me for the insurance and I didn't notify my insurance company. They paid for a minor repair while I was away. Everything was fine. I trust them completely and know them to be safe drivers tho.

I also swapped cars with my mom for many years, we just let the insurance company know we were borrowing (we both go thru the same insurance) and they said it was fine.
posted by ananci at 10:29 AM on September 20, 2018

I also swapped cars with my mom for many years, we just let the insurance company know we were borrowing (we both go thru the same insurance) and they said it was fine.

Your policy may be more liberal when a relative uses the car than when a friend uses the car. Mine is.
posted by JimN2TAW at 11:13 AM on September 20, 2018

I used to work for a major car insurance company. Your friend needs to call their insurance company. Most likely your roommate will need to be added to the policy (if your roommate gets into an accident driving the vehicle and is not on the policy, then the accident will get put into the record as a "lending loss," which are MUCH more heavily penalized than other types of accidents).

The inter-state nature of this carsharing also poses problems. It's possible that your Brooklyn friend needs to switch their policy to PA then back to NY to ensure proper coverage. (On the plus side, PA coverage is probably cheaper!)
posted by devrim at 11:30 AM on September 20, 2018 [2 favorites]

I loaned someone my car on a long-term basis once, and (I might be exaggerating this in my memory, but as I recall), they left soft drink cups in the cup holders until the bottom fell out and the remaining soda came out, then evaporated to form a quarter-inch layer of goo in the holder. They tore the fabric around the gear shift somehow. And they still expected me to pay for smog checks and repairs. The example above about the $4500 repair is a good one, especially if the repair is for something like a clutch where driving habits do matter.
posted by salvia at 12:24 PM on September 20, 2018

I travel a lot for work and typically lend my car to a friend of I'm away for two weeks or more. Keeps it from getting a flat battery and my thoughts are that someone might be using it rather than having it sitting around for a month. Never had any issues. That being said, my car is old and worth about $2000 so I'm not that fussed if something happens to it. I've never asked my insurance company about this arrangement, which seems a bit naive after reading the other answers!
posted by emd3737 at 1:27 PM on September 20, 2018

They should make a contract - if they don't want to call it a contract, that's ok, but they should specifically decide what to do in an assortment of hypothetical situations.
- car gets flat tire (example of immediate user-centric repair)
- car needs oil change, tire rotation, new tires, 50k mile maintenance (example of various levels of upkeep)
- car needs repair of something that was bound to happen sometime (eg muffler, dependign on age of vehicle)
- car has unexpected failure, major repair but probably unrelated to driver (eg head gasket, alternator)
- car has unexpected failure that may be related to driving or maintenance habits (struts/potholes; transmission/shifting; tire blowout/obliviousness to wear)
- rules about how to handle warning lights and how much it's reasonable to drive with warning
- car will be returned in perfectly clean interior condition (or else... detailing fee?)
- car gets minor/cosmetic issue (examples of wear-and-tear: hole in floor mat, spilled coffee between the seats that will never quite be perfect again, rust spot in wheel well, faint scratch lines in finish (eg parking too close to a tree branch))
- car gets into an accident... what if insurance covers it, premium goes up, does B pay A back? what if insurance doesn't cover it (because A didn't explain loan well enough?)
- what if driver does something objectively stupid and wrecks the car? (eg DUI, road rage, texting, things that of course our upstanding friend B would never do)
- what if it's pretty obviously poor driving that causes accident? (too fast in snow, turning left into traffic, fiddling with the radio)
- what if the accident is nominally/obviously another driver's fault, it's still bad news for the owner, insurance "totaled" payout is never enough to get as good a replacement, does B owe A anything?
- obviously B will pay all parking tickets and traffic tickets, even things related to the car like "driving with headlight out"
- obviously A will talk B through where all the papers are (title/registration/insurance) so that B can respond correctly if they get pulled over or get in an accident.
- does A have preferred maintenance sources (eg, can B get oil changed at JiffyLube, or must go to dealer?)

Basically, get a big pot of tea, and just talk it all through, lay out all the things anybody can possibly think of happening. If they're good friends, they may not need a written doc coming out of the discussion, but it's important to make sure that B understands what A thinks they're responsible for, and if anything happens, B won't have to figure out on the fly how to respond.
posted by aimedwander at 3:02 PM on September 20, 2018

It is possible to purchase non owners car insurance, which provides some liability coverage. It doesn't solve all the problems, but it is something to look into.
posted by AlexiaSky at 10:27 PM on September 20, 2018

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