You may have recently received a memo from PDP outlining how you can be protected for service loaner vehicles as rentals. The memo is accurate relative to Florida law but there is more to know.

The update from PDP explains how Florida law classifies a “rental company” in Florida and provides that a dealer loaning a vehicle for 10 days or less is considered a “rental company.” Dealers offering service loaners will be classified as rental companies and thus are protected from vicarious liability suits because of the protection of the Graves Amendment. 

A recent decision by one of Florida’s five appellate courts concludes that a dealer offering a loaner vehicle to its service customers is shielded from vicarious liability arising from the customer’s negligent use of the vehicle by the federal law, known as the Graves Amendment. 

This decision is the first by a Florida appellate court to hold that the Graves Amendment applies to loaner vehicles. While the recent appellate decision does not address Florida’s definition of a “rental company,” FADA does agree with PDP’s recommendation — that service customers in a loaner for more than 10 days should execute a new loaner agreement every 10 days (and perhaps change the loaner vehicle).

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