Does Your Auto Insurance Cover A Dealership Test Drive?

The sales lot of any car dealership is a place filled with conflicting feelings. For most buyers, emotions run high when looking to purchase a new vehicle. After all, new vehicles are expensive, and depreciate as soon as they leave the lot under new ownership.

However, the emotions surrounding a new-vehicle purchase must be kept in check in order to score an affordable deal; being rigid and persistent saves money off the sticker price.

But what happens when you ask to take the car for a test drive and end up crashing it? Are your financial assets gone? Will the dealership sue you? Does your existing auto insurance step in to save the day?

Learn these things and more below. Then take a look at CoverHound’s selection of the best auto insurance quotes on the web. You never know how much extra money you could be saving on your premium.

Typical Protocol

The typical protocol surrounding dealership test drives is that there is no protocol. That’s right, every dealership will go about test drives in their own unique way. Some could ask to see your license, others will take it a step further and make a copy of the license, and the more-stringent dealers could even have you sign forms with driving terms and restrictions, in addition to denoting your responsibility to any vehicle damages while it’s in your hands.

Dealerships could urge you to pay for the vehicle, which will then leave you responsible to pay for damages yourself (however they cannot do this legally). In most cases, the dealership’s insurance will kick in to cover most of the vehicle’s damage. You could however be required to pay up to their deductible amount in such an event, and that may not be cheap.

But the situations that could arise are quite nuanced. Here’s a further breakdown of the hypotheticals of crashing a test-drive vehicle.

Bigger Dealerships = Good Insurance

If you’re test driving a car from a bigger, more established dealership, they more than likely will have a good insurance policy for their entire vehicle fleet. If you crash their vehicle, they’ll be much likelier to make a quick claim on their own policy instead of collecting from you or your insurer.

This will of course depend on specific state laws, whether you were at fault, and most importantly, whether you even have insurance to begin with.

Let’s go over some scenarios below.

You’re at Fault in a Fault State

If you’re at fault in the accident and in a fault state, the damages to the test vehicle and the other party’s vehicle, as well as any medical costs, would be yours or the dealership’s responsibility. The dealership could pay the deductible and let their insurance policy kick in, but they’d be well within their right to collect that deductible (and more if severe injuries or costs occurred), either through subrogation or filing suit.

This one really depends on the specific dealership and how they choose to handle the event. The more well-known and financially secure the dealership is, the better your chances of not being financially liable are.

You’re Not at Fault in a Fault State

This one’s simple. Any vehicle damage and medical costs would be the other party’s responsibility.

You’re Not at Fault in a No-Fault State

In this scenario, the other driver would only pay for their vehicle damages and medical costs. Your dealership’s insurance would then pay for damages to the test-drive vehicle.

Ask the Questions

It always helps to be prepared before something actually happens, so be sure to ask plenty of questions before getting behind the wheel. Does the dealership have fleet insurance for all their vehicles? If so, what is the deductible amount? Have they had anyone crash a test-drive vehicle in the past? If so, what happened to them? The dealer’s answers will certainly give you an idea of what you could be in for should something unfortunate occur.

Will the Accident Go On My Record?

Crashing a test-drive vehicle will only go on your record if you’re at fault. If you’ve demonstrated negligence by making an unsafe lane change, running a red light, hitting the brakes too late at an intersection or driving recklessly in general, you can expect for your record to be hit, and at the least, to fork over the dealer’s deductible amount (but cross your fingers it’s not more).

So, to summarize, don’t get in an accident while test driving a vehicle from a dealership, but if you’re going to, make sure it’s not your fault.

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