Can My Friend Borrow My Car?

How Does Sharing Your Car Impact Your Insurance?

Sharing your car with a friend once or twice shouldn't impact your car insurance premiums. Your auto insurance typically covers permissive users—in other words, drivers who have permission, either implied or stated explicitly, to drive your car. For example, your spouse probably has implied permission to use your car whenever they want without having to ask. Your visiting friend has explicit permission to drive the car if you say yes when he asks to borrow it.

Understanding Permissive Use

Someone who drives your car without permission is considered a non-permissive user. If a non-permissive user is involved in an accident, your auto insurance typically won't cover it; instead, the non-permissive driver's insurance would be used.

Unless they're specifically excluded on your car insurance policy, anyone who lives in your household is generally considered a permissive user. However, some auto insurance companies don't consider household members permissive users unless they're specifically listed on your policy. It's a good idea to list anyone who may regularly drive your car on your policy. People who drive your car only occasionally—say, a couple times a year—usually don't need to be listed, but you should check with your insurance provider to be sure.

Learn more: Can Someone Drive My Car and Be Covered on My Insurance?

Should You Add Your Friend to Your Insurance?

If you plan to let a friend borrow your car on a regular basis, another option is to buy a shared insurance policy. Sharing an auto insurance policy with someone who regularly drives your car could save money: You can split the cost of premiums and potentially enjoy a multi-car discount.

Not all insurers allow unmarried people (such as roommates) to share a car insurance policy, though. If yours doesn't, listing the person on your auto policy can help ensure you're protected. To safeguard your car and your finances, ask your insurance company about the best way to handle your specific situation.

Learn more: How to Add Someone to Your Car Insurance

What Happens if Your Friend Crashes Your Car?

If your friend is involved in a crash while driving your car, your car insurance may cover the damages depending on whether it was being driven with permissive or non-permissive use.

• Permissive use: If your friend had permission to use the car, your auto policy's liability, collision and comprehensive coverage usually pay for damages in an accident. There are a few exceptions, however:
  • You excluded the person from your insurance. Excluded drivers aren't covered even if you give them permission to drive the car.
  • You have a named-driver auto policy, and the person isn't listed on your policy. Named-driver policies only cover people who are specifically listed.
  • The person wasn't listed on your standard auto policy, but your insurer determines they should have been (such as a nanny who regularly drives your car).
• Non-permissive use: If someone uses your car without permission and has an accident, you typically aren't responsible for damages. However, if your vehicle is damaged in the crash and the person who borrowed it is uninsured or underinsured, you might have to file a claim with your car insurance to pay for repairs.

Learn more: What Does Car Insurance Cover?

How Much Will Your Insurance Pay if Your Friend Is in an Accident?

Even if your auto insurance policy covers permissive users, coverage limits may be lower when your friend borrows your car and gets into an accident. However, your insurance company may ask your friend's car insurance to cover the remaining costs if the claim exceeds your coverage limits.

Example: If your friend's accident results in $60,000 worth of damage but your policy only covers $35,000, your friend's car insurance may pay the $25,000 your insurance doesn't cover.

To help ensure you're adequately protected, though, it's a good idea to purchase a shared policy or list your friend on your auto insurance if you expect them to drive your car frequently.

Learn more: How Much Car Insurance Do I Need?

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Things to Consider Before Letting Your Friend Borrow Your Car

You can protect yourself while your friend is driving your car by giving them permission, listing them on your auto insurance or even purchasing a shared policy if they regularly drive your car. However, there are a few other questions you should ask before letting someone else take the wheel.

• What does their driving record look like? It's generally not wise to let someone borrow your car if they have a history of unsafe driving, such as speeding tickets, accidents or DUIs. Depending on your state's laws, you could be deemed legally liable for damages or injuries if you let an irresponsible or impaired driver get behind the wheel.
• Do they have a valid driver's license? State laws generally require a valid driver's license to drive legally. A person who's never had a driver's license may lack the skill and experience to drive safely, while a suspended or revoked license generally indicates the person is a high-risk driver. In either case, it's probably not a good idea to let them use your car.
• Do they have their own auto insurance policy? Auto insurance generally follows the car, not the driver, but letting an uninsured driver borrow your car is dangerous for both of you. Your uninsured friend could face fines, license suspension or worse if they're pulled over or get into an accident. And since they have no insurance, your car insurance—or you personally—will be on the hook for any damages they cause.
• How will they be using your car? Personal auto insurance typically doesn't cover accidents that happen while the car is being used for business purposes. Letting a friend use your car to shuttle clients around, work for a rideshare service or make deliveries could put you at risk.

Even if it's uncomfortable to do so, don't be afraid to say no to your friend if you're not comfortable with their answers to the above questions. Your decision to refuse their request could end up saving both of you a lot of financial harm and heartache.

The Bottom Line

Adding a driver to your auto insurance could raise your rates, but the extra protection can be worth the cost. To offset any increase in your premiums, ask your insurance company if there are discounts you may qualify for.

You might also be able to save on auto insurance by switching to another provider. To see if lower rates are available, compare quotes from several different insurance companies. You can do this by visiting insurance company websites or directly contacting insurance carriers. You can also try Experian's free car insurance comparison tool. It gathers quotes from top insurance companies in your state, so you can see at a glance if there's a better price out there.