What Happens if a Dealership Totals Your Car?

For many of us, our vehicles represent the culmination of hard work and countless hours determining what vehicle is the right one to buy. Buying a car in the first place can be a stressful endeavor, but it’s an investment. Cars depreciate pretty quickly once they’re driven off the lot, but having a loan can help build or repair credit, and having the car of your dreams that you’ve worked so hard for is a point of pride.

When you do everything right and take your vehicle in for scheduled maintenance, it’s a blow if accidents happen while in the dealership’s care. Unfortunately, this has happened to a few people.┬áSo, if a dealership totals your car, what happens next?

What happens if a dealership totals your car?

A police officer standing next to a totaled vehicle surrounded by police tape
A totaled vehicle surrounded by police tape | Roberto Machado Noa/LightRocket via Getty Images

Hopefully, this never happens. However, there have been cases when someone has dropped off their car for routine maintenance or repair at a dealership, and they have come back to find that their car has been damaged, wrecked, or, worse yet, totaled. How does this happen?

Oftentimes, when diagnosing a problem or taking a test drive after routine maintenance or repair, technicians will drive the vehicle on roads and streets around the dealership. This is common practice because a quick trip around the lot won’t usually do much. However, anything can happen on a short drive.

That’s what happened to a woman in Houston. She dropped off her new 2020 Ford Escape for a routine oil change and came to pick it up only to find it had been completely totaled. In her case, the dealership wouldn’t take responsibility, nor would the technician’s insurance. She had to file a claim with her own insurance and let them hash it out with the dealership and the other insurance company. 

Dealerships have their own general liability insurance that should cover just such an event. Every dealership should have this coverage. It covers anything that might happen while they have the vehicle in custody, whether they own it or not.

Another policy they should have is a Garage Keeper’s policy. This policy would cover any vandalism, theft, or damage in the garage that isn’t related to driving the car. For example, if a lift broke and dropped a vehicle, it would be covered under the Garage Keeper’s policy.

The process can be a long one, if they don’t cooperate

Dealing with insurance companies can be a hassle anyway, but if the dealership doesn’t cooperate, then it’s even more of one. In the case of the woman from Houston, the Tomball Ford dealership didn’t cooperate. She had to contact several people before finally handing it all off to her own insurance company.

However, even when dealerships cooperate, you may be out some money. According to the Hartford Courant, a Mustang Shelby GT500 was totaled by a dealership, and the owner lost money in the incident. The dealership’s insurance covered the incident, but Marc Mastroianni, the owner of the Mustang, claimed that the vehicle was actually worth about $60,000. The dealership’s insurance only paid out $39,385. 

The Litchfield Ford dealership was sympathetic but didn’t offer more. They responded that Mastroianni could buy a far newer vehicle with the settlement, but that doesn’t consider either the sentimental value of the vehicle or the money that Mastroianni had already put into it. The 2008 Mustang Shelby GT500 was one of only 20 produced and was Mastroianni’s dream car. There’s no replacing that.

What can you do if a dealership damages your car?

Don’t be shy about contacting a lawyer if you feel that you are owed more than initially offered. All dealerships should have general liability and Garage Keeper’s insurance policies, but don’t walk away with the first offer if you feel like it isn’t enough to cover the vehicle’s value. After all, it’s up to the vehicle’s owner to get the best-negotiated settlement.

Hopefully, this never happens to you!

RELATED: 5 Questions You Shouldn’t Answer When You Walk Into a Car Dealership