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  • Loaner cars

    Posted by richie on November 19, 2014 at 10:00 am

    Our 5 store dealership used to have a loaner car or two at each location and loan to customers. A customer had an accident and sued us for brakes not working. Not true, but a part of the world we live in. Our Garage Liability company then banned us from loaning to customers. I just purchased 2 loaner cars and am buying my own shop. How do you suggest I title cars, who get insurance from, and how to I prevent problems in future. Should I have customers provide proof of drivers license, insurance, sign off waiver etc.  Thanks for your advice!

    Alan Ollie replied 9 years, 2 months ago 9 Members · 8 Replies
  • 8 Replies
  • Tom

    November 19, 2014 at 11:39 am

    This varies a lot from state to state. In general, as I understand it, the best thing to do is to “rent” the cars to the customers – whether you charge for it is up to you. So you have a regular rental agreement just like at the airport. 

    Also, find out what shops in your area have “loaner” cars and ask them who their insurance company is, then contact them for more information. 
    Loaner cars are becoming more important all the time. There is likely a way to do it right pretty much anywhere – although it may not be cheap and simple. 
    Anyone need any snow…we have extra.
  • iaauto717

    November 24, 2014 at 12:19 pm

    We have 2 loaners cars available. We copy customers ins card and license. They sign a loaner agreement that says thier insurance covers the loaner while they are driving it. Maybe contact a lawyer and have a form written for your shop.

    Our customers are very happy to have a free loaner car available.

  • David Stewart

    November 24, 2014 at 3:36 pm

    For the last 10 years we have at least 9 loaner cars we do the reg thru the business and have the customer sign a loaner car agreement. Knock on wood in 10 years not one accident. However we do not loan cars when the weather is bad due to some people do not know how to drive the minute a snowflake hits the ground Just make sure the loaner agreement covers your business

  • russmccloud

    November 24, 2014 at 5:05 pm

    As this varies state to state, you definitely should seek information. We have loaners and use Zurich insurance. The cost is reasonable and the coverage is good. In our state, we do not charge a rental fee as that changes the game dramatically. Your insurance agent may be a good source of information as well as your attorney of course.

    We have a two-part form the customers fill out as well as collecting the aforementioned information. The fuel level is noted as well as vehicle dings, scratches, etc. We simply ask that they bring it back with at least as much fuel as it left. We inspect for damage and fuel level upon the vehicle’s return.

    The one time the customer had a collision that they were at fault, their insurance paid the claim.

    Good luck! 🙂

  • wrenchwench

    January 13, 2015 at 11:20 am

    I agree with everything everyone else has mentioned – I would just add that as an additional level of protection, I have created a separate company that owns all the vehicles. This way, heaven forbid anything horrible happens and you get sued, the only company that can be touched is your car ownership company, not your repair shop.
    Just my two cents.

  • tsteenholdt

    January 20, 2015 at 9:16 am

    I have gotten away from loaner cars. I do have a shuttle van and do loan it to some of my better customers. If I or a customer sees a need for a car I set them up with Enterprise. I market this that Mr. customer can have a rental car for $10 per day. I pay the other part of the rental. The rental car and insurance is all in the customers name. The customer is responsible for insurance, and any upsells done at the rental counter. I think the rental car costs me less than the overall expence of having shop owned cars sitting around, clean-up and upkeep of the cars.

  • Mark Hartmann

    January 27, 2015 at 1:44 pm

    I have tossed this around for years with the same result.

    I keep a company shuttle van and driver as needed. Otherwise an economy rental car is $35 a day from Enterprise. They are local, are a phone call away, prompt and professional.
    I will pay on the more expensive repairs or just make the arrangements on others.
    I have to remind myself what my core business strategy is and loaner vehicles and operating tow trucks are not part of it. Work hard to establish good relationships with those businesses and keep your focus.
  • Alan Ollie

    March 14, 2015 at 10:05 pm

    We have 4 loaners.All have over 140k miles all drive great. People are impressed with how well they run with all the miles on them. 

    I am just starting to upgrade my 2002 jetta and Passats with 2007 Jettas 
    I should not say this but we have never had a problem or tow in in the 3 years we had them. 
    I would have 10 if i could . The ability to upsell and  convenience to be able to pick up or drop off a car 24 / 7s great.

     Plus if you think about it its cheaper than having one extra mechanic its about 130 a month for insurance i am not aloud to charge directly for a loaner with Zurich insurance. About $100 a month in maintenance costs.  Last saturday we had 2 loaners available and 2 oil change turned into Clutch job and a Timing belt because we had a loaners available, 

    We already have a $750 a month bill with enterprise so it would be way higher without loaners. 

    Try to under cut my quote without giving a customer a car while they are waiting 2 weeks for a $5000 on a engine job. The loaner closes the deal.  Ollie 


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