Prom Rules: Should You Knowingly Rent A Car For Your Underage Or Ineligible Prom Going Teen?

Introduction

Some Prom going teens have parents who misbehave on Prom night by knowingly renting a luxury, exotic or other type of car for their Prom bound teens against the rules.

Are The Financial Risk Worth It?

But is it worth the financial risks and potential for being a target in a legal action initiated by the rental companies? There are indeed very big financial risks

Although many teens return home on Prom night without even a scratch to the luxury or similar cars rented by their parents at exorbitant rates, the risks are definitely not worth the rewards.

Prom season which runs typically from March through June, signals the annual influx of parents knowingly and deceptively renting cars for their teens to drive to their one-in-a-lifetime big night. But just one night can leave a family with major financial devastation if the car is returned with damage, involved in an accident, drink driving incident or even a fatality.

Rental car companies traditionally refuse to rent to anyone under 18, a big hurdle for most high – school students. Prom goers have ditched the long-held tradition of renting a limousine for their big night. Instead they're opting for luxury cars.

Prom Season Signals Influx Of Parents Renting Cars For Their Prom Going Teens

Prom season, which runs from April through June, signals the annual influx of parents knowingly renting cars for under age, in eligible teen drivers. Space with the travel downturn, rental – car companies are increasingly concerned that they don't get stuck with the cost of collecting on repair bills from under age drivers.

Rental car companies are hypersensitive to the practice of families renting cars in the names of the older parents but turning the keys over to the teens when out of view of the companies. As a result, the companies make if very hard for older friends or family members to lend their teens a hand by refusing to rent to drivers under age 25 unless they pay a very hefty surcharge. In same cases if the car company suspects that a car is being rented for a prom-going teen they will outright refuse to rend the car even to older siblings, friends or parents.

To prevent someone older from renting a car for an under 25 year old driver, rental firms place similar age restrictions on extra drivers of a rental car, too.

In many cases, when a driver rents a car, any additional drivers requested on the rental contract must be physically present, with their license in hand.

Even with all the restrictions, sniffing out car rental violators from legitimate drivers can be a daunting task for the beleagued companies.

One representative of a major rental car company reported that even when you look a parent directly in the eye and ask them if they're going to be the only driver of the car, they'll say yes even when they have every attention of turning the keys over to their Prom going teen.

Parents Need To Think Long And Hard Before Renting Cars For Their Teens

If parents know the liability they're taking when they rent a luxury car for their teens they might think long and hard about taking the risks.

Many rental car companies take additional precautions during prom season, such as questioning renters to come to the counter with teens, including the decision to refuse to rent altogether to people they suspect are going to pass their keys onto their children.

Rental car companies have every reason to be cautious about renting to teen drivers.

Although young adults from age 15 to 20 traditionally make up approximately 6.8% of total licensed drivers, they account for 17% of all police – reported car crashes and 14% of all drivers involved in fatal crashes, according to the US Department of Transportation.

Rental Car Insurance Is Invalidated When Car Is Rented Inappropriately

Although rental companies only find out about parents illegally giving rental car keys to their Prom going teens when there is a problem. At that point the problems are major. Although the liability parents face when a teen crashes a rental car rented under false pretenses depends on the insurance carrier, the penalties can still be severe.

A spokesman for a major car rental group said if a parent or adult rents a car under their name and then lets an unauthorized driver, including underage drivers, operate the vehicle, all insurance coverage purchased from the rental company is immediately voided. After all, the car was rented deceptively and not specifically for the teen who had the accident.

How Private Insurance Carriers Handle Rental Car Accidents For Deceptively Rented Cars

If private insurance is utilized instead of rental car insurance it also might not pay for any damage or accidents.

State Farm is one of the nation's largest auto insurance carriers and tends to take each claim on a case by case basis. In some cases a car rented by a parent for their teen would be covered if the policyholder gave the teen specific permission to drive the rented car, regardless of the rental car's policies. However State Farm takes a very dim view of their policyholders using their insurance coverage to fraudulently rent cars for their underage or ineligible teens.

Not all insurance companies will pay for damages caused by a Prom going teen. In fact, many insurance companies very well might take the side of the rental car company. Allstate, also one of the largest auto insurance carriers, has a clause which says that permission for who has the right to drive the vehicle lies with the owner of the vehicle, which is the rental car, not the policyholder.

Historically, rental car companies may wind up spending huge sums of money to collect damages if a renters insurance company refuses to be pay because of deception.

Bottom line? Parents have to follow the rental car rules and can't be sneaky about it. You can't rent a car and let your teens secretly drive it on Prom night. You have to inform the rental car company. If you don't, you may be committing deliberate fraud.

While renting a car for an underage driver without express disclosure and permission from the rental car company may not violate any state or federal laws, lawyers suggest it could be considered a direct violation of the rental agreement. These violations can result in significant damages in a civil court in the event of major damage, collision or a related fatality.

Rental car firms say they are typically the last to discover a problem. The truth is uncovered only after calls from the impound yard or police officers wanting to know if the rental company wants to come and get their car.

If you're seriously considering renting a luxury car for your teen for their Prom be clear about that when you call rental car companies. Also, be sure to discuss your plans with your insurance carrier to get their feedback on what your policy covers or doesn't cover.

What Are You Options For Your Teen's Prom Night Transportation?

To avoid getting in hot water with your car insurance carrier or risking a major financial loss, consider the following options:

1. Rent the luxury car of your teen's dreams, but act as their chauffer. By doing that, you would not be deceiving the rental car company since the person renting the car will be driving it.

2. Have your teen get together with their friends and rent a special Prom party bus.

3. Reconsider a limo. If that seems out of the question, consider a town car instead.

4. Lease a luxury car from a leasing company for an extended period of time.

Co-ordinate the lease with your teen's prom date. Before you finalize the lease get permission for your teen to drive the car during the lease period. Be sure to be clear with the leasing company about your plans to lend your leased car to your teen for their Prom.

5. If the Prom is being held in a hotel consider having your teens get together with their friends and rent rooms at the hotel which eliminates the need for any type of special transportation to and from the Prom.

If you're concerned about your teens spending the night at the hotel, make sure that they are properly supervised.

When in doubt, ask your insurance agent for additional suggestions.

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- Revised Publication Date: 02/18/11

Hair: Ouidad Photography: Kristen Somody Whalen

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