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Discussion Starter · #1 ·
I have a business that's main focus is snow removal lets call this company A. I work for my parents company full time doing contracting and one day will take full ownership company b. company a uses three trucks for the months of November December January February they sit the rest of the year. Company b could use another truck but most of the winter the employees are laid off.
My thought is to lease/rent the truck to company b for 8 months. How do i go about insurance etc??
 

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Company b's auto policy should cover leased or rented autos, but I would keep them on company a also. Write up a short lease agreement, but you will need to hash out who will maintain them in the 8 months.
 

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I like SectorSecurity's answer. If you were my client, I would probably counsel you as follows:

You don't necessarily have to go through setting up a formal vehicle lease agreement. One of the principles of insurance is that you can't insure what you don't own, so as registered owner of the truck the insurance policy would have to be in your name, regardless. How the policy is rated and premium calculated, however, is based on how the vehicle is used. So, the policy is is set up in Company A's name (or whatever name is listed on the vehicle registration) and then Company A and B's employees/drivers are all listed and you disclose that the vehicle is used part time for Company A's snow removal and part time for Company B's contracting business. and the premium charged is calculated either on the combined usage; or if a clearly defined split usage, you could call me in November and I change the rating to snow removal; then in March I switch it over to artisan trade work rating; then next November re-rate back to snow removal, etc., etc.

I only suggest doing it the easy way as there is a family connection and common family ownership. If, however, you want to keep the two businesses totally separate, (or if someone here was thinking of sharing vehicles with a friend's business), then it's in your business' interest to get a formal lease agreement drawn up whereby the Lessee (Company B) leases the vehicle from Company A for the 8-9 months in question. Part of that lease agreement will require them getting their own insurance on the vehicle, but you would be listed as a Named Insured with respect to being Lessor (as you are still the registered owner of the vehicle and the principle of not being able to insure property you don't own must be met). An endorsement called Permission to Rent or Lease is added to the policy. If the policy is set up this way and a claim happens while Company B has care, custody, control of the vehicle, then it won't affect Company A's claims record. Otherwise, it is the same as if you let your friend borrow your car and he had an accident; you get stuck with the claim. Also, for accounting deductions, it would make it more clear-cut as to who is paying for insurance, Company A or Company B.

P.S. The rule-of-thumb between a rental and a lease is usually that a rental is for less than 30 days; while a lease is 30 days or longer. With a lease you have to get the plate portion of the registration switched over to the Lessee; so Lessor name is still on the vehicle portion and Lessee name is on the plate portion. Rentals don't require any kind of re-registration at the Ministry of Transportation ;but if you rent out your vehicle and get paid for renting it out, you must declare that to your insurer as they will rate the vehicle different than if someone just borrowed it at no cost.
 

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Discussion Starter · #5 ·
Thanks for the replies. As of right now we haven't done anything and the more I think about it the less I'm inclined to do it. The trucks I have for plowing are older 1995 and a 2006. Repair costs for driving the extra mileage are probably going to out weigh the benefits. If I had a newer truck it would make more sense.
Thanks
 

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There is a company called "Relay Rides" that will rent your vehicles on the open market by the day, week, or month.

They cover the insurance, roadside assistance, etc. and they have a very good screening process. It's much like Zipcar except that people are renting personally owned vehicles. In fact it was the former CEO of Zipcar that founded the company.

I thought about doing this myself because I got a new work truck and my "personal" vehicle sits on the driveway 5-6 days out of the week. I don't mind the wear and tear of it being driven as much as I am concerned about it deteriorating from it just sitting there. At least if I rent it out, I can get enough money to cover the costs of the insurance, tags, taxes, maintenance, etc. and then when I actually need my car, I can get it.
 
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