Credit Hire in Personal Injury Claims: How It Works And What to Expect

After a car accident, one of the first concerns many drivers face is losing their car.

At Gildeas Solicitors, we understand that after an accident, getting moving and back to your day to day is absolutely critical.

Credit hire services can be a way of solving this problem, offering a temporary vehicle without any expensive upfront costs. But while this service is vital, credit claims need to stand up to being scrutinised in court.

Read on as we explain the key points you need to know.

What is credit hire?

Credit hire is not a company car.

If your vehicle was damaged or written off due to an accident that wasn’t your fault, instead of going to your insurers, you might choose a credit hire company.

They will supply you with a vehicle on a ‘credit’ basis (i.e., a loan) whilst yours is being repaired, or if it’s written off.

What are the benefits of credit hire?

• The innocent person involved in a road traffic accident doesn’t need to make a claim on their insurance and pay an excess – which can be expensive, depending on your policy.
• In most situations, there is no upfront cost. This makes it an attractive option for people who can’t afford to lose their vehicle, or who can’t afford the expense of an alternative.
• A replacement vehicle from a credit hire company usually arrives more quickly than one from your insurers.
• Credit hire companies sometimes have additional benefits, e.g., the company pay to clean the car whilst you have it, or they might give you a small payment towards fuel.
• Credit hire companies also tend to have a larger source of vehicles, so you’re more likely to get a similar vehicle to your own.

How does credit hire work?

Most personal injury solicitors work in partnerships with credit hire companies to offer this service.

You’ll be asked to sign a credit hire agreement with a credit hire company before receiving the replacement vehicle.

The costs of hiring a vehicle are factored in as a part of your claim and recovered from the insurance company of the driver you’re making a claim against.

Key points in proving a credit hire claim:

It’s your solicitor’s responsibility to justify to the court why you needed to hire a vehicle.

That’s why it’s essential that you give accurate information to your solicitor and the credit hire company. You should check both the agreement and their T&Cs before you sign anything.

If your solicitor can’t 100% prove why you needed a hire vehicle, this part of your claim could fall through.

Unfortunately, by law this means that you are then responsible for the costs of hiring the replacement vehicle.

Mitigating your losses in credit hire claims

In personal injury law, there’s a rule which means that when making a claim, you still have a responsibility to make sure any losses you’ve incurred are as minimal as possible – whether it was financial, your injuries, or otherwise.

This is called  mitigating your losses  and it also applies to credit hire claims. Your solicitor will need to prove to the court why the credit hire costs were reasonable, for example: 

Duration:

Even if your solicitor can prove that you 100% needed to hire a vehicle, they also need to justify if the length of time it was hired for was reasonable. If there are unnecessary delays, this could be picked up on by the other side.

Vehicle hire rates:

The court decides on how much of the hire costs to award you. It usually makes this decision based on your income. It’s your solicitor’s job to provide evidence about this. For example, if you couldn’t afford to pay the upfront costs for a hire car, then the court is more likely to award you the full hire costs. The legal term for this is “impecunious”.

But if you had plenty of cash coming in or significant savings in the bank, the court would expect you to have footed the bill to hire a replacement car. This is called being “pecunious”. Being pecunious means you might only be awarded a basic hire rate, or worse – this part of your claim can fall through.

What can I expect if I make a credit hire claim?

If you take up this service, you’ll probably be faced with questions from your solicitor like:

• Why do you use your car – for work, commuting, etc?
• Was there another family car available to you?
• Could you have paid for a hire car with your own money?
• Could you have paid for repairs to speed up the process?

Your solicitor will ask you for evidence to explain your situation, e.g., bank statements.

It sounds daunting but, with your help and co-operation, your solicitor will likely be able to resolve the matter in an efficient manner.

When should I use credit hire?

You should take advice from your solicitor. A good solicitor can inform you when you can use credit hire, and when you might not be eligible.

In conclusion, credit hire is a necessary service – but it must be fair, reasonable and be able to stand up in court when scrutinised by the other side.

Our credit hire team deal with hundreds of individuals and businesses alike in credit hire claims.

So, if any of the above sounds familiar to you and you need some help, please contact our specialist personal injury lawyers today.

If you or a loved one is suffering, don’t hesitate to ask for support.

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More from Gildeas:

• Impecuniosity: The Little Known Legal Principle That Could Increase Your Compensation
• Mitigation: Could You Lose Out On Compensation Without Realising It?
• Maximising Your Compensation: A Step by Step Guide
• FAQs