What happens if a customer damages a car during a test drive? Learn which insurance policies may apply, who could be responsible for repair costs, and what independent auto dealers should do after an accident. Discover how garage liability insurance, dealer open lot coverage, and consistent test-drive procedures can help protect your dealership from unexpected financial losses.

Car dealerships need specialized insurance to protect their business, inventory, employees, and customers. Most dealers need garage liability insurance, dealer plate coverage, inventory protection, and other business policies depending on their operations. This guide explains the most common insurance requirements for car dealers, what may be required for licensing, and how to choose the right protection for your dealership.