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Credit hire - why hire two vehicles?

View profile for Barry Sutton
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Disputed credit hire claims

You have unfortunately been involved in a non-fault road traffic collision – your own vehicle is damaged and cannot be driven – you receive a credit hire vehicle (1) which suits your needs provided for by a credit hire provider, your own insurer or an accident management company etc. You then receive further contact from the opposing insurer also with a second offer of a suitable hire vehicle (2) which will be provided by a mainstream provider (such as Hertz, Enterprise, Europcar etc.) What do you do?

Whilst your first instinct may be to ignore this second offer, put it in the bin, carry on using the credit hire vehicle (1) you already have, you need to be very careful that you are not failing in your legal duty to reasonably keep your losses to a minimum.

In general terms this second offer may well suggest that should you hire a vehicle (2) via the opposition insurer (and a mainstream provider), as the costs associated with this new vehicle (2) will be less than those costs which you are incurring.

At this point you may consider that you are not incurring any costs as the credit hire vehicle (1) you have is not costing you anything. Once more you should be careful.

The credit hire vehicle (1) you have is likely provided to you on credit terms and generally has a cost associated which you signed to be liable for but are not being presently asked to pay.

The second offer, known as an intervention offer (due to the nature of attempting to intervene in the ongoing credit hire contract), is likely made on different terms in that generally the cost associated with the hire of that vehicle (2) is going to be paid by the opposing insurer on your behalf and you do not sign to incur a liability for those charges.

The second offer should set out the intervention cost that the opposing insurer will pay for the vehicle (2) you will use and the intervention cost will generally be lower than the market rate costs which an individual would be able to hire the same vehicle from the mainstream provider. This intervention cost is lower than the market rate likely due to the bargaining power an insurer will have over a mainstream provider in being able to provide potentially hundreds of new intervention customer leads per month.

As an individual you would be able to consider the daily costs associated with the credit hire vehicle (1) which would have been present on a document you signed when receiving the vehicle (1) and compare this daily cost to that which the opposing insurer suggests they will pay per day on your behalf should you accept their offer of a vehicle (2).

Subject to the intervention offer being valid and reasonable, should the cost of the intervention vehicle (2) be less than the cost of the credit hire vehicle (1) then my advice would be to accept the intervention offer.

We  would also recommend that you contact the credit hire provider of the current vehicle (1) you have and they may well be able to give you helpful guidance regarding this intervention offer should you not have a solicitor representing you at that time.

It may well be that following your instructions the credit hire provider is able to accept the intervention offer on your behalf and liaise to ensure that the opposing insurer’s provider is able to deliver you a suitable vehicle (2) at a convenient time / location and the credit hire vehicle (1) can be picked up around the same time to ensure that you do not lose your mobility through this transition period.

An advantage to allowing the credit hire company to play a role during this transition is to ensure that the hire vehicle (1) is not left with you once you receive the intervention vehicle (2), which could cause you to be liable for the cost of the hire vehicle (1) being left with you. Another advantage is to ensure that the opposing insurer is able to fulfil their intervention offer and actually deliver you a vehicle (2) before the credit hire vehicle (1) is taken away.

As a consumer you should be aware that just because you receive an intervention offer of a hire vehicle (2) from the opposing insurer, they may not actually be able to fulfil the offer and provide you with a suitable vehicle (2) to meet your needs which is reflective of the credit hire vehicle (1). If the opposing insurer is unable to provide you with a suitable vehicle (2) then you will not be acting unreasonably in remaining in the credit hire vehicle (1).

By involving the credit hire company with any intervention offer received you are best placed to be able to limit any liability you may have for credit hire charges and at the same time comply with your duty to reasonably keep your losses to a minimum.

We hope that the above information helps you when considering any intervention offer but should you have any queries please do not hesitate to contact us. We have a specialist team highly experienced in dealing with the recovery of credit hire charges. Call us on 01616 966 229.

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