Dealer Liability for Crash During a Test Drive

I’m Katelyn Holub, an attorney focusing on personal injury law in northwest Indiana.

Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss personal injury law topics.

Today’s question comes from a caller who was hit by a car being test-driven by a man considering purchasing it. A dealership salesman was in the car with the man.

The caller wanted to know if the dealer or insurance carrier could be liable for the crash.

These situations are relatively rare, but they do happen.

Many dealerships try to limit liability by having test drivers sign liability waivers before getting behind the wheel. Such waivers aim to transfer any liability that would otherwise rest on the dealership to the test driver.

Dealership liability will focus on whether the dealer failed to use proper care to prevent a foreseeable crash. Consider these factors:

Did the dealer inspect the vehicle before allowing a test drive?

Did the dealer check to see if the driver had a valid license?

Did the dealer provide supervision during the test drive?

Did the dealer confirm that the test driver had valid insurance before giving them the keys to the vehicle?

When a dealership is under a duty during a test drive, fails to use proper care, and breaches that duty and a crash occurs, the dealer may be liable for damage.

Where a test driver is responsible for the crash, their own car insurance policy typically provides primary coverage, similar to an accident involving a rental car.

In cases where a dealer is deemed liable, their insurance company may find itself having to cover the damage.

In the caller’s case, the test driver was speeding. The salesman (an agent acting on behalf of the dealer) encouraged the man to speed and even timed the car’s 0 to 60 mph speed during the test drive.

I hope you found this information helpful. If you are a victim of someone’s carelessness, substandard medical care, product defect, work injury, or another personal injury, please call (219) 736-9700 with your questions. You can also learn more about us by visiting our website at DavidHolubLaw.com – while there, make sure you request a copy of our book “Fighting for Truth.”