Subrogation Allowed Against Repair Garage?

Our insured's auto was damaged by a collision that occurred while the auto was being test driven by an employee of a repair garage; the employee was at fault for the collision. The insurer has paid for the physical damage done to the insured's auto, but now questions whether it can subrogate against the garage. This hesitancy is brought about by the general provision in the personal auto policy that states that the insurer's right to recover payment “does not apply under part D against any person using your covered auto with a reasonable belief that that person is entitled to do so.”

Now, we can accept the argument that the insurer cannot subrogate against the employee because it is reasonable to believe that he was entitled to drive the auto to check and make sure the repairs were made properly. However, it seems to us that the repair garage could be subrogated against since it is not a person and it has to bear some responsibility for the employee's actions. Furthermore, what about the “no benefit to bailee” clause in the personal auto policy? If the garage does not have to pay for the damage done to our insured's car, is that not a benefit to the garage-bailee?