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My husband and his sisters have had frank conversation with her, pointing out the safety issues for both her and others, but she just wants what she wants. There are dents all over the car from fender benders; thank goodness no one has been hurt. Now her car needs mechanical service, and we thought that would end the problem because she has no money to spend on the repairs. But nope. She brought the car to the garage my father in law worked at before he died, and they will repair it for nothing. They have done this for her with other repairs, which I know is why she drove herself to the garage to let them know she couldn't afford the repairs instead of letting the issue go. My husband (her son) went to the garage and explained to the owner's son the family's concerns about her driving. Unfortunately he didn't tell the owner of the business, and it was the owner who wants to "take care of the car" in honor of my father in law. She doesn't want to give up her independence, which includes driving across town daily to the local diner for socialization. We get it, but we have a small ADA bus service who will provide the transportation. My husband and his,sisters don't know what to do now. I think they need to keep beating the drum on the safety issue and maybe speak to the owner of the garage as well. There could be a liability issue on the garage if they fix a car after the safety concerns are ignored. Should someone contact her doctors and explain the situation? Maybe they should ask about a senior driving test? Thank goodness I didn't have to have this conversation with my parents because they gave up their driving privileges on their own.

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This isn’t on the repair place to figure out. The family clearly knows she isn’t safe to drive and it’s on them to make it stop. Disable the car, there are a myriad of ways to do so, provide no explanation or discussion with MIL about it. Report her to local DMV and her doctor as an unsafe driver. States vary widely on taking action on this, even if her license is removed, it still won’t prevent driving if she’s being unreasonable. She needs a medical evaluation for dementia, also not discussed with her. Now is the time you make sure ducks are in a row on things like someone being named POA for healthcare and medical decisions for the time when she cannot. Find out if there is a will with an executor, an advanced directive that spells out her wishes, be familiar with her finances so you’ll be aware if she’s scammed or needs to pay for care. Don’t wait on the driving and don’t apologize for it, just think how it might feel if she hurt or killed someone
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Is your husband your MIL's PoA? If so, he needs to be leading this effort. First and foremost, this is a clear symptom of dementia. A very common one. She needs to get tested so that the results are in her medical records. This will not convince her to stop, however. You and hubs must now "finesse" how you get her to do things. Someone (preferably one of her daughters or DILs) needs to make the medical appointment for her and let them know about the dementia concerns. They will gladly test her. The way you get her in is to make a "therapeutic fib" that she needs to do her free Medicare annual wellness check (which is a real thing) for some reason: the insurance company requires it, her doctor ordered it, whatever you think she'll buy. Someone needs to go with her to the appointment and be in the room while she's talking to the doc, Sit behind her and if she doesn't answer questions accurately, you indicate the correct answer by silently nodding or shaking your head. When I did this for my MIL I was shocked at how poorly she did on the tests.

Next, you make another therapeuric fib about why the car has been removed: the shop did needs to finish doing something, they forgot to do x, they found a big problem in the transmission and needed it back... whatever. Also DO tell the owner about the situation so that he doesn't waste his time helping her for no reason.

Next, report her as a dangerous driver either in person or online at her state's DMV. They will need as much info about her (name, address, DL #, etc. and incidents as proofs). They will most likely send her a letter telling her to come in for a test (depends on the state). Don't let her see the letter and do not take her for this test. Let her license expire. Cancel her car insurance. Make up for her lack of driving somehow but NOT on public transportation (no public bus, taxi, Uber, etc.). She will need to rely on rides from trusted sources like friends, neighbors, relatives, paid companion aids (like from Care.com or an agency). Do tell her neighbors and friends to NEVER lend their car to her if she asks.

She will be upset, even angry. It doesn't matter. A car driven by the wrong person is a weapon that maims and kills people. Your MIL has the beginnings of dementia. Dementia robs people of their reason and logic and empathy for others, that's why you are wasting your breath trying to "reason" her out of driving. It won't happen. Just read the dozens and dozens of (recent!) posts on this topic. I've had to go through it with 3 seniors and now my own Mom as well. It won't feel good but it must happen. ASAP. I wish you all the best as you navigate helping your MIL to stay safe.
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Is it possible that while the car is in for the repairs they "find" something more serious? Something that is expensive to repair and the owner can't justify
taking care of it".
If this does not work for one reason or another you could:
Get her doctor to send the proper form to the Secretary of State (DMV) and indicate that her license should be revoked. Some doctors are hesitant to do this for some odd reason.
I am wondering have each of the "fender benders" been reported?
I am thinking her insurance has got to be very high.

It is not the responsibility of the mechanics to make sure she does not continue to drive.
Who, if anyone is her POA? That is the person that should put their foot down and say enough is enough.
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