Do You Always Get the Same Size Replacement Vehicle After an Accident?

Courtesy Car vs Credit Hire Car – Why It Matters

After an accident in the UK, most drivers will be offered some form of replacement vehicle. This usually falls into two categories:

• • Courtesy Car – supplied by your own insurer or repair garage under your policy. Normally small and basic, with limited availability. Usually no hire charges are recovered from the at-fault party.
  • Credit Hire Car – provided by a credit hire company when the accident was not your fault. You don’t pay upfront; instead, the hire company seeks the cost from the at-fault insurer later.

UK courts closely scrutinise credit hire agreements to ensure the driver acted reasonably. Issues like the length of hire, the daily rate, and whether you really needed that vehicle class are all tested. Failing to act reasonably may mean not all costs are recoverable, leaving the driver potentially liable.

Mistake 1: Not Checking Whether You Actually “Need” the Hire

The law says you are only entitled to a replacement vehicle if you have a genuine need. If you could reasonably manage with public transport, lifts, or delaying some non-essential journeys, you may not be entitled to full recovery.

How to avoid:

• • Write down why you need a car (commute, children’s school runs, business deliveries).
  • If your use is very limited, keep a short log of daily mileage.

Mistake 2: Ignoring Courtesy Car Rights in Your Own Policy

One of the biggest mistakes is going straight to a credit hire company without checking if your own insurer can provide a free courtesy car. The law places a duty to mitigate losses on you, meaning you must take reasonable steps to reduce the financial impact.

How to avoid:

• • Always ask your insurer if a courtesy car is available.
  • If it’s too small or unsuitable (for example, you need an automatic or space for disability equipment), record your reasons for rejecting it.

Mistake 3: Choosing More Car Than You Really Need

Courts don’t automatically accept that you need a “like-for-like” vehicle. For example, if your damaged car is a luxury model but your real requirement is simply commuting, a lower-spec car may be deemed sufficient.

How to avoid:

• • Choose a car that matches your practical needs (fuel type, number of seats, boot space, automatic/manual).
  • If you need like-for-like, keep evidence of why (for example, business reasons or special adaptations).

Mistake 4: Signing Credit Hire Contracts Without Reading Them

Credit hire agreements often state that you are personally liable for charges if the insurer refuses to pay. Drivers frequently sign without understanding cancellation terms, late return penalties, or fuel policies.

How to avoid:

• • Ask: “What happens if the at-fault insurer disputes the hire charges?”
  • Take a full copy of the contract and read the small print.
  • Photograph the car at handover and return to avoid unfair damage claims.

Mistake 5: Failing to Prove Impecuniosity

If you could not afford to pay upfront for a standard rental car, the courts allow recovery of the higher credit hire rates. This principle was confirmed in Lagden v O’Connor. But you must provide evidence such as bank statements and wage slips. Without proof, courts often reduce claims to the lower “Basic Hire Rate”.

How to avoid:

• • Gather three to six months of bank statements and payslips if you truly could not fund a normal hire.

Mistake 6: Paying or Claiming the Wrong Daily Rate

When impecuniosity is not proven, the law restricts recovery to the Basic Hire Rate (BHR) – the lowest reasonable rate available from mainstream suppliers. Courts will compare your credit hire rate with open-market prices.

How to avoid:

• • Ask the hire company how their rates compare with mainstream companies.
  • Keep screenshots or quotes of public rental prices around the start of hire.

Mistake 7: Letting Hire Drag On Too Long

Hire costs rise quickly, and insurers often challenge long hire periods. Common issues include delays in authorising repairs, slow acceptance of a total-loss valuation, or failure to start searching for a replacement car.

How to avoid:

• • Push for a quick repair authorisation.
  • If your car is written off, chase the insurer for valuation and begin sourcing a replacement immediately.

Mistake 8: Refusing a Suitable Offer from the At-Fault Insurer

If the third-party insurer offers you a suitable replacement car quickly and you refuse without a strong reason, the court may cut your claim. This again comes down to the duty to mitigate.

How to avoid:

• • Consider all offers carefully.
  • If refusing, explain why in writing (e.g., wrong size, not automatic, too far away for collection).

Mistake 9: Using the Vehicle for Purposes Not Declared

If your own car was used privately but you use the hire vehicle for business, problems may arise with insurance coverage and claim validity.

How to avoid:

• • Be upfront about how you intend to use the replacement car.
  • Ensure the insurance provided matches your real usage.

Mistake 10: Accepting Unnecessary Add-Ons

Credit hire companies sometimes add optional extras such as second-driver fees, delivery surcharges, or sat-nav hire. Unless these are essential, courts may rule they are not recoverable.

How to avoid:

• • Only accept extras you genuinely require.
  • Keep a record of why they were needed.

Mistake 11: Poor Documentation

Many disputes arise because the driver didn’t keep records. Without evidence, insurers can argue that you delayed repairs, failed to return the car promptly, or misused the vehicle.

How to avoid:

• • Photograph the car at collection and return (all sides, interior, mileage, fuel).
  • Keep a diary of key dates: accident date, when hire started, when your own car was repaired or written off, and when offers were made.

Mistake 12: Not Returning the Car Promptly

Your entitlement to a hire car ends when your vehicle is repaired or when you receive a settlement for a total loss. Continuing to keep the car “just in case” is a classic error.

How to avoid:

• • Return the car as soon as your vehicle is back or when you have bought a replacement.
  • Get written confirmation of the return date.

Mistake 13: Overlooking Storage and Credit Repair Costs

Storage and repair on credit can also be challenged if they are unreasonably long or expensive. If your car sits in storage for weeks while nothing is being done, those charges may not be recoverable.

How to avoid:

• • Regularly ask the repair garage or hire company for progress updates.
  • Keep written records of reasons for any delays (awaiting parts, valuation issues).

Mistake 14: Refusing to Provide Financial Disclosure

If you claim you could not afford a standard rental but then refuse to provide bank statements, courts may assume you could have done so. This often results in recovery being capped at the Basic Hire Rate.

How to avoid:

• If claiming impecuniosity, provide complete financial disclosure promptly.

Mistake 15: Assuming Car Value Equals Hire Entitlement

Some drivers think the more valuable their car, the higher their hire claim can be. In law, the value of your car is irrelevant. What matters is whether the replacement car was reasonably required, at a reasonable rate, and for a reasonable duration.

Key Legal Principles to Remember

• • Duty to Mitigate – You must act reasonably to reduce the financial impact.
  • Impecuniosity (Lagden v O’Connor) – If you couldn’t afford upfront rental, higher credit hire rates may be recoverable, but only if you prove it.
  • Basic Hire Rate (Stevens v Equity Syndicate Management) – If you are not impecunious, recovery is capped at the lowest reasonable open-market rate.
  • Reasonable Need vs Like-for-Like – You are entitled to a car that meets your genuine needs, not necessarily the exact make or luxury level.
  • ABI General Terms of Agreement (GTA) – Many insurers and hire companies follow this framework, which helps reduce disputes if rates and terms comply.

Practical Checklist for Drivers

• • Check your own policy first for courtesy car options.
  • Clarify your need (commuting, family, business).
  • Pick the right class of car, not more than you reasonably require.
  • Read the contract before signing and keep a copy.
  • Record evidence of market rates at the start of hire.
  • Provide financial proof if claiming impecuniosity.
  • Keep hire duration as short as possible.
  • Document everything with photos, emails, and notes.
  • Return the car promptly when your need ends.
  • Consider offers from the at-fault insurer and explain refusals clearly.

Conclusion

Getting a replacement car after an accident in the UK can be straightforward if you know your rights and obligations. Most problems arise when drivers take too much car, for too long, at too high a rate, without understanding the paperwork.

By keeping your actions reasonable, documenting your decisions, and returning the hire promptly, you protect yourself from disputes and ensure the at-fault insurer pays what they should.