Probably everyone has lent their car to someone else at some time or another. But who thinks about the fact that this may well entail legal consequences? It starts with insurance coverage and possibly ends with legal consequences. So what should you look out for if you want to lend your car out?
The most important facts in a nutshell
- Who lends its car, should make on the one hand a handing over minutes and a loan contract, on the other hand inform the insurer.
- In principle, the vehicle owner is initially liable in the event of accidents, traffic violations or if the car is unroadworthy, even if he is not responsible for them.
- If you lend out your car but only specify yourself as the driver in the insurance contract, you risk premium increases and penalties.
- If the hirer causes an accident with the vehicle, the vehicle's insurance will apply, not the hirer's insurance.
What is the difference between renting and leasing a car??
If you rent out your car, you make it available to another person free of charge. With a rental, on the other hand, the borrower pays a fee. Private car rental is possible, for example, via car-sharing portals where private individuals offer their vehicles for rent.
While contracts and general terms and conditions are already specified by the portal operator in the case of car sharing, it may make sense to draw up a rental contract when lending out your own car. In any case, before the vehicle is handed over, a protocol should be made regarding the condition of the vehicle. This will ensure that there are no disagreements about possible damages.
Pay attention to the group of persons in the insurance contract
The insurers ask in the insurance application, who uses the vehicle. Does this apply only to the policyholder, to spouses or to an unspecified group of persons? Depending on the number of users, the accident risk statistically increases and so does the premium. If you rent out your car, you should inform the insurer in any case. If, contrary to the contract, a third party causes an accident, there may be a reduction in benefits or penalty premiums. The penalty payment may well amount to a year's premium.
The situation is somewhat different if the vehicle owner leaves the vehicle to a third party due to an emergency or driving incapacity. If, after three glasses of wine, you ask your friend to drive you home instead of driving yourself, you are not acting in breach of contract but in accordance with the law.
What to look out for in advance when renting a car?
The car owner is responsible for the road safety of the car. If you rent out your car, you have to make sure that the car is roadworthy according to the road traffic regulations. The owner must make sure that the borrower is in possession of a valid driver's license. For the duration of the loan, he must hand over the vehicle registration document (registration certificate part I) to the borrower so that it can be presented at any time during a traffic control. Driving without a vehicle registration certificate costs a ten euro fine. If you rent out your car, you can reclaim the vehicle at any time.
What about liability for traffic violations??
In principle, the vehicle owner is initially liable if he cannot prove that a third party was on the road with his car. Assuming neighbor gets speeding ticket with borrowed car, proof of who was driving is easy based on photo. The neighbor has to pay the ticket, the car owner has nothing to worry about.
The situation is different if the car was parked in a no-parking zone and a police officer issues a parking ticket. The vehicle owner cannot prove that he has not parked the car in violation of traffic regulations, and therefore receives the ticket.
Liability in the event of an accident
Accidents are critical. First of all, of course, the motor liability of the borrowed vehicle takes effect if the borrower causes an accident and damages a third party. Damage to the vehicle, if any, is covered by comprehensive insurance. However, the vehicle owner can take recourse against the hirer for the damage if the latter is at fault or partially at fault for the accident. On the one hand, this applies if there is no comprehensive insurance, on the other hand, for the higher premium in the liability and comprehensive insurance after the upgrade. Partial cover does not apply in the event of an accident.
Both motor vehicle liability insurance and comprehensive insurance are vehicle-related policies, not person-related policies. You settle damages caused by the insured vehicle, regardless of who was driving. The liability insurance of the borrower does not cover the damage caused by him with the borrowed vehicle. This applies to both motor vehicle liability and personal liability insurance. However, some private liability insurances now offer the inclusion of cost coverage if an accident was caused by the policyholder and the vehicle owner is upgraded.
Lending a car: How to stay on the safe side
If you want to be nice and lend out your car, you will be even more annoyed afterwards if there is damage and the lender does not want to know about a cost transfer. This potential nuisance can only be avoided if you conservatively set up a loan contract. This includes:
- The condition of the car with any previous damage
- Who pays for which costs
- Who is liable in case of doubt
- From when to when the vehicle is lent
- Who pays the possible deductible in the event of an accident
To avoid possible penalty premiums, it is essential to inform the insurer. In case of doubt, it makes sense to extend the circle of drivers in the insurance contract.