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Credit Hire

What is a credit hire agreement?

A credit hire agreement is an agreement entered into between a third party and a credit hire
provider. The credit hire provider provides a replacement vehiclewhen the third party’s own
vehicle is damaged in an incident. The period of hire should commence from when the damaged
vehicle is being repaired and/orwaiting to be declared a total loss.
The vehiclewill be provided to the third party on a credit basis. This reflects the fact that after
the third party has paid the credit hire charge to the credit hire provider once the hire period
has ended, the credit hire provide rwill seek to recover these costs from the at fault party or his
insurer. In reality,whilst the third party is technically liable for the costs of the hire, these charges
are never actually paid by him but rather,will be paid by the at fault party directly to the credit
hire provider.

When is a credit hire possible?
Credit hire should only be taken:
1. if there is no doubt as to liability.
2. for the duration of the period of loss of use of the damaged vehicle. Please note that if the vehicle is safe and drivable this may only be for the period during which repairs are actually being undertaken.
3. the driver has no other equivalent "spare" vehicle available and without depriving another driver (usually spouse or partner) from using it; and
4. in theory at least,  the driver could not have obtained or paid for an alternative vehicle without suffering any financial impediment (ie they had spare money they did not need for anything else).


When should I not accept a credit hire vehicle?
• If there is any doubt as to whether the other party is 100% liable.
• If the damage was minor and your vehicle is drivable (you will not be entitled to a hire vehicle except for the actual period during which the repair is undertaken).
• If you have an equivalent vehicle you would not otherwise be using (and would not be depriving another person of using - such as your spouse or partner's car)
• arguably, if you have the means to hire an equivalent vehicle for the full period necessary without suffering any deprivation (deprivation being in the legal sense - that you had no other possible need/use or future use for the money).

What is the difference between a credit hire vehicle and a courtesy car?
A credit hire vehicle might be hired to you following a non-fault accident by a credit hire company. It is normally provided on a "like for like" basis following loss of use of your own vehicle and payment is subject to a credit agreement which you enter with the credit hire company. If all goes well the payment for the hire should be recovered directly by the credit hire company from the insurer of the at-fault driver(s). In some circumstances you could be liable for any charges made under the agreement that they cannot recover.

A "courtesy car" may be provided while your car is repaired and may be funded by your insurance policy or by agreement with the third party insurer. Courtesy cars are normally "stock" vehicles often provided by the repairing garage. They may be offered following non-fault, split liability and at-fault accidents. 

I was in an accident which was not my fault. Am I entitled to a replacement vehicle?
Generally speaking the law provides that if you suffered damage or injury wholly caused by another person you should not be disadvantaged in any way.

However the law says your need for a replacement vehicle is not a given. In most circumstances showing the need will be easy to satisfy but you may not be entitled to a replacement vehicle if it can be shown that yours was not needed for the period of repair.

Circumstances where this might apply might include:
• if you were to be on holiday abroad and the vehicle concerned was to be parked up for the entire period of the repair.
• if your car was damaged but you had another of equivalent quality available for your sole use parked in your garage

Iff you need any further information regards credit hire,please feel free to call or email us.

Mobile : 0844 2458 786
Email : [email protected]


 

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