If your business allows test drives and loaner vehicles, there are risks to be aware of, including theft, property damage, inventory damage and personal injury.

With these five tips, you can reduce the risks your business faces:

  1. Create test driving criteria—As a dealer, you can require drivers to meet certain criteria before a test drive. Common requirements include age, valid driver’s license, proof of insurance and placing a credit card on file. Always have an employee accompany the customer on test drives.
  2. Establish a route—When allowing test drives, a set route can save time, give your customers a complete picture of the vehicle and reduce the chance of an accident. Give your customers a variety of road conditions and speed limits and avoid busy areas that reduce driving time. Limit test drives to less than 30 minutes. We also recommend that your pre-established route contain right hand turns only, as data shows accidents increase when drivers in unfamiliar vehicles perform left hand turns across lanes of traffic.
  3. Require seat belts—Remind test drivers and loaner users to wear a seat belt at all times. You may also consider placing a permanent sign at your parking lot exit reminding drivers to wear their seat belts.
  4. Implement written agreements—If your dealership provides loaner vehicles, have policies in place. Require customers to sign a loaner agreement that has been reviewed by an attorney (This agreement helps transfer the primary liability to the personal auto insurance of the driver). Request a valid driver’s license and proof of insurance, establish the radius and duration for the vehicle’s use and limit the use of the vehicle to only the individual named in the document.
  5. Complete inspections—Always inspect your loaner vehicles before and after they have been loaned. Keep a vehicle log to track any issues.