Understanding Your Consumer Rights in Credit Hire Cases

When you’re involved in a non-fault road traffic accident, navigating the aftermath can be overwhelming — especially when your vehicle is damaged and you’re left without transportation. This is where credit hire services come in: they provide you with a temporary replacement vehicle without upfront payment, and the cost is later recovered from the at-fault party’s insurer. However, many people don’t fully understand their consumer rights in these cases.

In the UK, consumer protection laws and regulations exist to safeguard you during credit hire agreements. This article explores your rights as a consumer when engaging with credit hire services — from understanding contracts to resolving disputes.

What Is a Credit Hire Vehicle?

Credit hire refers to the process where a non-fault accident victim is provided with a replacement vehicle while their own is being repaired or replaced. Instead of you paying for the hire car upfront, a credit hire company supplies it on credit and later claims the cost from the at-fault driver’s insurance.

Credit hire companies work under the assumption that you, as the innocent party, are entitled to be put back in the position you were in before the accident, in line with UK common law principles.

Key Consumer Rights Under UK Law

As a consumer in a credit hire agreement, you are protected by several pieces of legislation and case law. These include:

1. Consumer Rights Act 2015

This act is one of the most important protections you have as a customer. It ensures:

1. 1. Fair and transparent terms: The terms and conditions of a credit hire agreement must be written in plain language.
      
   2. The right to services performed with reasonable care and skill: The credit hire company must provide a roadworthy vehicle suited to your needs.
      
   3. The right to challenge unfair terms: If the contract includes terms that cause significant imbalance in the parties’ rights to your detriment, it may be deemed unfair and unenforceable.
      

2. The Road Traffic Act 1988

Under this act, every motorist is required to have insurance. If you are not at fault, you have a legal right to claim for losses incurred due to the accident, including vehicle hire charges.

3. The Principle of Mitigation of Loss

While you have the right to a replacement vehicle, the law also expects you to act reasonably. You must not rack up unnecessary costs or continue to use a hire car for longer than needed.

Who Can Use Credit Hire Services?

You’re eligible for a credit hire vehicle if:

• • You were not at fault in the accident.
    
  • You need a vehicle for work, school, daily life, or other personal responsibilities.
    
  • You cannot afford to pay for a replacement vehicle upfront.
    

Even if you have comprehensive insurance, using your own policy might mean paying an excess or losing your no-claims discount. Credit hire helps you avoid that.

Your Rights When Entering a Credit Hire Agreement

1. Clear and Transparent Information

Credit hire companies are required to explain:

• • How the agreement works.
    
  • That you’re not paying upfront.
    
  • That recovery of charges is from the at-fault insurer.
    
  • What happens if the at-fault insurer refuses to pay.
    

You have the right to ask questions and receive written documentation outlining all fees, responsibilities, and your options.

2. Cooling-Off Period

Under the Consumer Contracts Regulations 2013, you’re generally entitled to a 14-day cooling-off period for services agreed upon away from business premises (e.g., by phone or online). However, if you request immediate service (e.g., the hire car delivered right away), this period may not apply in full.

3. Suitability of the Vehicle

You’re entitled to a vehicle that reasonably matches your original car. For example:

• • If you drive a family saloon, you should be provided a similar-sized vehicle.
    
  • If you use your car for work (e.g., as a taxi driver), you should be supplied with a suitable business vehicle.
    

You do not have to accept a lower-class vehicle unless it’s part of mitigation.

4. Privacy and Data Protection

The credit hire company must comply with GDPR (General Data Protection Regulation). They must protect your data and use it only for the purposes agreed upon.

Your Rights in Case of Disputes

1. Challenging Liability

If the at-fault insurer denies liability, the credit hire company may ask you to help prove the other party was responsible (e.g., witness statements, photos). However, you are not responsible for the other driver’s insurer refusing to pay unless:

• • You misrepresented facts.
    
  • You were actually at fault.
    

2. Being Sued for Unpaid Charges

This is rare but possible if the at-fault party refuses to pay and the credit hire company decides to sue. However, under the law:

• • The company must prove you agreed to be personally liable if the claim failed.
    
  • If the contract terms were unclear or unfair, you can defend against the claim using consumer protection laws.
    

Recent case law supports the position that credit hire companies must make it clear if the consumer will be liable. If they don’t, you have legal grounds to contest any charges.

Common Pitfalls and How to Protect Yourself

Here are some practical tips to protect your rights:

Always Read the Agreement

Ask for a copy of the credit hire agreement. Ensure you understand the following:

• • Duration of hire.
    
  • What happens if the other party’s insurer refuses payment.
    
  • Whether you’re liable if costs cannot be recovered.
    

Get Everything in Writing

Verbal promises can be hard to enforce. Request all communication — especially concerning liability or vehicle type — in writing.

Keep Evidence

Keep records of:

• • The accident.
    
  • The need for the vehicle (e.g., your job or school run).
    
  • Any communication with the credit hire or insurance companies.
    

This documentation can support your claim and protect you from potential disputes.

Frequently Asked Questions

Q1: What if the at-fault insurer offers me a car? Do I have to accept?

Answer: No. You have the right to use a credit hire vehicle if:

• • The insurer’s offer isn’t like-for-like.
    
  • You don’t want to deal directly with the at-fault insurer.
    
  • The offer is delayed or inconvenient.
    

However, you may need to justify your refusal in court if costs are disputed.

Q2: Can I be forced to pay if the at-fault driver’s insurer refuses to pay?

Answer: It depends. If the credit hire company made it explicit in the contract that you are liable in such a case, then possibly yes. However, if the terms were unclear or misleading, you may have a strong defense under the Consumer Rights Act 2015.

Q3: Can I claim for other losses like fuel or loss of earnings?

Answer: Yes, as part of your overall claim, you can claim associated losses, including:

• • Fuel costs for the hire car.
    
  • Loss of income if you’re unable to work.
    
  • Vehicle recovery or storage costs.
    

Your credit hire company or solicitor can help document these.

Legal Precedents That Protect Consumers

Several court decisions shape consumer rights in credit hire cases. Notable examples:

• • Dimond v Lovell [2000]: Highlighted the importance of clear contracts and mitigation.
    
  • Lagden v O’Connor [2003]: Supported claimants who could not afford to hire a car themselves, thus allowing credit hire.
    
  • Copley v Lawn [2009]: Clarified that a non-fault driver doesn’t have to accept an offer from the at-fault insurer.
    

What to Do If You Feel Your Rights Have Been Violated

If you believe a credit hire company is treating you unfairly:

1. 1. Complain to the company first and request a resolution in writing.
      
   2. If unresolved, contact Citizens Advice or Solicitors Regulation Authority (SRA).
      
   3. Consider taking legal advice from a solicitor who specialises in consumer law or road traffic accident claims.
      

Conclusion

Credit hire services are a valuable support tool for innocent drivers involved in accidents — allowing them to maintain mobility without bearing immediate financial burdens. However, it’s vital to understand your consumer rights under UK law when entering these agreements.

From the right to clear contracts and suitable vehicles to protection from unfair charges and liability, the UK legal system provides robust protection. Always read your agreements carefully, document your circumstances, and don’t hesitate to seek legal advice if something feels wrong.

Being informed is your best defence. Don’t let confusion turn a helpful service into a legal headache.