My wife and I recently had a third child, so we bought a minivan to replace her compact car. Since the car is over 10 years old with almost 150K miles, we know it won't bring us much money, so there hasn't been any sense of urgency to sell it. As such we have it in the driveway collecting dust.

Just this week a family member has had a major mechanical issue with his car, and he does not have the means to fix it immediately.

My wife and I are contemplating offering to let him borrow our old car, but I sense there is some risk there. It is still covered under our liability insurance, and the title is, of course, in our name.

Aside from the risk of possible damage or depreciation to the car itself (which I could live with), is there a way to eliminate other risk if he borrows the car?

I am thinking specifically of my insurance rates rising or, worse, possible litigation as the title holder if he were in an accident. But if there are more risks involved, I would be interested to hear what they might be and how to mitigate them.

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    If it helps any, I am a Texas resident, as is my family member. – Wesley Marshall Apr 2 '16 at 20:46
  • Remove the car from your insurance and have your family member put it on their insurance. I'm no litigation expert but one one thing that could cause you grief is if the brake lines leak and someone gets hurt. I would imagine that the party which was hurt will come after you as well since it's your car and was not properly maintained. If it's not worth much money to you then you can consider giving to them... – MonkeyZeus Apr 7 '16 at 19:55
  • Most insurance policies address the situation of lending the car - some policies cover vehicles, others cover drivers, and either kind may or may not cover damages to other persons or property in an accident. You'd really have to review your policy documents (or simply call your agent) to find out the specifics for your policy. – brichins May 31 '18 at 19:41

The simple solution here would be to either sell or give the car to your family member. The answer depends on whether they can afford to buy or you can afford to give. Transferring ownership gets rid of any of the liability considerations you outline, and also gets it out of your driveway! It also saves you from having to deal with any relationship issues that could arise if they borrow and something goes wrong (they damage, fail to return, etc). Your gut is telling you that there could be issues with lending a car to you family member, and i would trust your gut & transfer ownership one way or another.

  • I agree, in principle, but I worry that there could be a larger relationship issue if I sold him the car and some problem arose with the vehicle soon thereafter. And although I am in a stable position financially, I'm not quite at a point where I am comfortable giving away a car, even to someone close. – Wesley Marshall Apr 2 '16 at 22:44

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