Personal Injury

Liability Law and Loaning Your Car


As the owner of a motor vehicle, you may be at fault even when you're not driving. This is called vicarious liability. In this case, it means the owner of the vehicle is responsible for any wrongdoing of another person while driving the owner's vehicle.

You should keep this in mind when deciding whether to let someone borrow your car - a friend, an acquaintance or even your employer or an employee if you give permission to use it.

Who's the "Owner?"

Many states presume that the person named on the vehicle's registration and insurance is the owner of the vehicle. However, ownership may not always be proved simply by showing that a person is the named insured on an insurance policy that covers the vehicle. Depending on the statute of a particular state, this can be negated if:

  • Another person acts as a owner because they have possession of, care for or claim to own the vehicle
  • Another person act as a owner because they have the authority or power to sell the vehicle

In other words, if a person appears to act like an owner (i.e possesses the car or claims to have the right to sale the car), that person may be held responsible if an accident occurs involving that car. Also, when a vehicle has been sold to someone else without bill of sale or a change in the name of the owner on the certificate of title, the person who's in possession of the vehicle may also be considered an owner.

Types of Accidents and the Owner's Liability

Some common circumstances where a car owner can be vicariously liable for an accident include:

  • When an employer asks an employee to use a car for a business reason
  • When the owner knows that a driver is incompetent, reckless or unlicensed and lets him or her drive anyway
  • When the owner knows that the vehicle is defective but lets the driver use the car


An owner of a motor vehicle who's also an employer can be liable for his or her employee's negligence in causing a car accident if:

  • The employee was driving the owner's vehicle while doing something related to his or her job, or
  • The employee is unlicensed, incompetent or reckless

Additionally, it must be shown that the driver was in fact an employee of the vehicle owner and not an "independent contractor."

In some states, a car owner can be vicariously liable for an accident if the vehicle was being driven by a member of the owner's family for reasons related to the owner's business.

Also, a car owner might be vicariously liable when the driver and owner were members of a "joint venture" or "joint enterprise" at the time of the accident. A joint venture or joint enterprise exists when the owner and the driver have agreed to use the vehicle for some activity, for example, a business deal, and both have a say in deciding how the vehicle is going to be used, such as deciding the route to be traveled and sharing the costs of the trip.

Family Members

Some states allow the parent or head of household to be liable when a family member is involved in an accident with the owner's vehicle. If a parent knows their child is not a safe driver but allows them to use the vehicle anyway and causes and accident, the parent may be liable for their child's action.

Incompetent, Reckless or Unlicensed Drivers

If an owner of a vehicle loans a vehicle to another person they know is incompetent, reckless or unlicensed, they can be liable for their action. The key is that the owner must know this before loaning the vehicle. Also, the owner must have given permission to use the vehicle. Express permission is when the owner says, "Take my car." Permission may be implied from the actions of the owner, such as a failure to object to the driver's use of the vehicle. Either type can be given.

Although driving records may be used to show the driver was incompetent, reckless or unlicensed, the record can't be used to show negligence at the time of the incident. In other words, just because someone has a record of a behavior, doesn't mean it was the actual cause of a current incident.

However, intoxication at the time of the loan may be suffiecient to prove recklessness or incompetence.

Defective Vehicle

An owner might be vicariously liable if they knowingly loan a defective vehicle, whether through proper care of some other known defect. The owner is liable even if the cause of the accident is the driver's negligence.

Questions For Your Attorney

  • If I'm vicariously liable for a car accident, does that mean the driver who actually caused the accident doesn't have to pay anything?
  • As an employer, what should I do to protect myself from hiring employees with bad driving records?
  • As a parent, is there anything I can do to protect myself from being liable for accidents caused by my child, an inexperienced teenager?

If you've been involved in a car accident within the last three years, please consider taking our car accident survey so that we can include your experience in Martindale-Nolo's 2016 Car Accident Survey. Your participation will help inform others about their situation and options before dealing with their car accident.

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