Who pays for damage to a brand new car if it is damaged at the end of a test drive by a customer with no insurance?

Question

I took a friend to a new car dealer so they could look at and test drive new cars. They don't have insurance because they haven't owned a car in a few years. Told the sales person that the most important features were the safety features (blind-spot warning, backup alarm, collision alert, etc...) At the end of the drive, salesperson with them in the car instructed them to back-up into a darkly-shaded area with a support pole nearby. No alerts or alarms went off (as in my vehicle would have) and they hit the pole, damaging the back corner of the new car. Didn't see any dents, just a lot of the paint from the pole that they manager said might buff out. They told my friend that they would have to pay $400-$500 and perhaps more depending on what they could fix. Then they asked for insurance and was informed the customer/driver didn't have any. After returning home, the internet seems to indicate that dealers have coverage for precisely this type of incident. But my friend is worried.

Joel Gary Selik · Answer

Yes, the car dealership has insurance that will cover this.

Charles M. Baron · Answer

First, you are not legally permitted to provide legal advice to your friend if you're not a licensed attorney.  Your friend must directly contact a lawyer if he/she needs advice that he/she can rely on.  General educational guidelines for the kind of issue you describe are as follows.  Regardless of whether an auto dealer has insurance to cover damage to test-driven vehicles (and they likely do), if damage is caused by the negligent (careless) driving of an uninsured customer, the dealer could potentially sue the customer, and if the dealer instead elects to make a claim to its insurer, the insurer could potentially sue the customer for the amount they pay out to the dealer.  If a claim is made, and the customer's position is that the salesperson's negligence is what caused the accident, the customer could raise that as a defense (which may or may not fly).  Whether the dealer or the insurer would bother to sue over $400-$500 (plus awardable court costs of a few hundred bucks) is hard to say.  Since it would be in Fla. small claims court (which has a limit of $8,000), the dealer would have the option of NOT hiring an attorney, instead going with self-representation - so the issue for the dealer would be whether someone wants to bother to spend the few hours needed to pursue it.  Generally in the type of situation you describe, it's sometimes a good idea to try to amicably resolve the issue by offering a compromise amount, and if amicably resolved, there should be a signed release of liability.  Again, all of the above is only general educational info, not legal advice, for which the facts of the situation would have to be discussed with the party who has the issue.

Q: Who pays for damage to a brand new car if it is damaged at the end of a test drive by a customer with no insurance?