Why Does the Toyota Dealer Rental Department Require You to Have Full-coverage Insurance?

[jen202]

My Toyota dealer provides a free replacement rental car from their own in-house department provided your car is in the service department for 8 hours or more. They try to give you the same model as you are having serviced. They also will rent a car for a week if you want to try it before you buy, or for other reasons. It can be driven anywhere in the US and Canada.

One dealer required you to have just liability insurance. My current dealer requires full-coverage insurance though!

Why does the Toyota dealer require any insurance at all (instead of just selling it to you)? What if you want to rent a car there but don't want to get your current insurance company involved? What if you don't have full-coverage since your car is old? What if you have no car (and therefore, no insurance), but want to rent the car before buying? Usually rental companies offer insurance you can buy.

 

[djs]

Car dealerships are not rental car companies and probably don't have enough volume of cars they 'rent' to worry about setting up the necessary relationships to offer coverage.

I think its safe to assume the overwhelming majority of people who have their car serviced at a dealership have full coverage auto policy in place, so they would be wasting their time. In the rare case someone wants to do an extended test drive, they can add full coverage to their current liability policy and then they can do the test drive.

If someone doesn't own a car then odds are, its not a good fit for someone buying a new car. No car usually goes to a used car then to a new car. Renting them a car for a week would probably remove the need for them to actually buy a car. That is what Enterprise rental is for.

My suggestion? Take the shuttle home (or to work) or call Uber and solve the problem for the day.

Dan

 

[jen202]

Car dealerships are not rental car companies and probably don't have enough volume of cars they 'rent' to worry about setting up the necessary relationships to offer coverage.

I think its safe to assume the overwhelming majority of people who have their car serviced at a dealership have full coverage auto policy in place, so they would be wasting their time. In the rare case someone wants to do an extended test drive, they can add full coverage to their current liability policy and then they can do the test drive.

If someone doesn't own a car then odds are, its not a good fit for someone buying a new car. No car usually goes to a used car then to a new car. Renting them a car for a week would probably remove the need for them to actually buy a car. That is what Enterprise rental is for.

My suggestion? Take the shuttle home (or to work) or call Uber and solve the problem for the day.

Dan

Thanks Dan! You covered most of my questions. But older cars are the ones that would probably be in the shop for over a day, since they need more repairs, and especially for dealer-only problems. And older cars are not likely to have full-coverage. And if I called and asked to have full-coverage added for just two or three days, my insurer would probably laugh at me.

Oh well, I was just wondering since my dealer had that sign posted. I know my friend from Israel had a valid PA driver's license and IDL, and no car. But he rented a car every few months to see new cities. Once he settles down after grad school, I see no reason why he wouldn't just jump to a new car from no car at all.

 

[jen202]

Also, specifically I am wondering what benefits full coverage provides you when you rent a car from Toyota as opposed to just liability? Both insurances cover you equally in a rental car for liability and collision/comprehensive, right? So why did one dealer just require insurance, and the other full-coverage?

 

[VolAgent]

https://insurancecommentary.com/is-...-autos-rental-cars-and-test-driving-vehicles/

You may not even be as well covered as you think.

And no, liability and comp/collision are not equivalent when talking about a rental car. The comp and collision are necessary to repair the car if you are at fault, while the liability is to make whole the other person you hit.

However, the link also gives examples of when the dealer's insurance subrogated against the driver and the driver's insurance refused to pay as primary since the car was covered by the dealer's insurance.

And finally as to your friend from Israel, he would be more the exception. Most people's first car is a used car. Whether purchased directly or as a gift from their parents. Either a hand me down or a used car purchased for them.

 

[djs]

Also, buying a new car does not require, or even usually involve, renting the car first. You get a test drive, then sign on the dotted line(s).

Dan

 

[jen202]

You may not even be as well covered as you think.

And no, liability and comp/collision are not equivalent when talking about a rental car. The comp and collision are necessary to repair the car if you are at fault, while the liability is to make whole the other person you hit.

However, the link also gives examples of when the dealer's insurance subrogated against the driver and the driver's insurance refused to pay as primary since the car was covered by the dealer's insurance.

And finally as to your friend from Israel, he would be more the exception. Most people's first car is a used car. Whether purchased directly or as a gift from their parents. Either a hand me down or a used car purchased for them.

Ouch! So most of my life when I have rented from Enterprise, I did not have collision or comprehensive? I just gave them my own insurance info and paid with a credit card with CDW. I thought my insurance liability covered me for collision/comprehensive as a bonus, and the credit collision damage waiver paid for my deductible. So I was driving with out insurance all this time?

What if I buy the rental car agency's full insurance (Enterprise or Hertz), with or without a credit card that has CDW? Am I fully covered then?

 

[jen202]

I didn't post a link, but I quoted VolAgent's post, which did have a link. The forum wouldn't allow me to post it because I did not have 20 posts. But it wasn't my link. I think this is a glitch.

 

[DIMINISHED VALUE]

What if you don't have full-coverage

And even if you do have full coverage....

Here's something else to think about when renting ANY car. Your full-coverage auto policy does not cover you for the diminished value of a car that is damaged by your negligence. You can add it to your policy for a small amount but virtually all policies don't provide that coverage. You have to ask.

If you opt for all of the insurance provided by the rental company you have no worries. But of you decline the coverages and rely on your own policy - and cause damage to someone's late-model car - you will be liable for a diminished value payment which can reach the tens of thousands of dollars.

 

[VolAgent]

Ouch! So most of my life when I have rented from Enterprise, I did not have collision or comprehensive? I just gave them my own insurance info and paid with a credit card with CDW. I thought my insurance liability covered me for collision/comprehensive as a bonus, and the credit collision damage waiver paid for my deductible. So I was driving with out insurance all this time?

What if I buy the rental car agency's full insurance (Enterprise or Hertz), with or without a credit card that has CDW? Am I fully covered then?

Obviously the fine print matters...

With CDW, in general the rental company is waiving their right to go after you for damage to the vehicle. So, you don't have to worry about the actual damage, nor diminished value or loss of income. The link I posted was outlining situations where someone was test driving a vehicle owned by a dealership or was renting a vehicle from a dealership and was relying upon their own insurance, not anything purchased from the rental company or dealership.

So, you were probably just fine. The written contract always rules, but with CDW and your own liability coverage you should be just fine.