Time to peel back credit hire assumptions

Recent headlines about how the credit hire industry works reveal how little is truly understood about this vital element of the post-collision landscape. 

Peel back the assumptions, and a different picture emerges – one of a misunderstood system that helps tens of thousands of drivers every year.

After an accident, credit hire keeps people moving when they need it most. 

Higher charges typically arise in a minority of cases where vehicle repair delays extend hire durations and this is often due to labour shortages or parts supply issues, particularly for electric vehicles.

There are more than 33 million insured vehicles on UK roads and an accident rate of around 9%. That’s millions of incidents annually where temporary replacement vehicles can mean the difference between mobility and disruption.

For many, losing access to their car isn’t a minor inconvenience, it’s a serious disruption to work, school runs, and daily life. Those unable to afford upfront rental costs often have no alternative. 

The House of Lords recognised this in Dimond v Lovell, where credit hire was described as meeting a “real need”.

Today, with one in three adults struggling to access credit, that need is greater than ever.

In today’s world, the rising cost of living, inflation in vehicle repair and hire and limited public transport in some areas, means cars remain essential to everyday life. 

These factors underscore the importance of fair and accessible credit hire services. These are built around risk and responsibility. 

Accident management companies pay hire providers promptly, extend credit to individuals, and recover costs from at-fault insurers. Where recovery fails, the financial loss is usually absorbed by the business and not the claimant.

Clients are explicitly informed of the credit-based nature of the service, the provider’s identity, and that the arrangement does not form part of their motor insurance. 

These companies also often fund vehicle repairs and manage the entire claims process, taking on substantial commercial risks and administrative burdens for extended periods – often for over a year. 

Claims of excessive cost are often overstated. Higher charges typically arise in a minority of cases where vehicle repair delays extend hire durations and this is often due to labour shortages or parts supply issues, particularly for electric vehicles. These factors are outside the control of both claimant and provider.

Crucially, there’s no incentive for credit hire providers to inflate claims. They’re only paid if the charges are justified and recovered. They deal with some of the most experienced and well-resourced insurer teams in the industry which means claims are scrutinised and unjustified ones don’t succeed.

The law also provides safeguards. If a claimant isn’t impecunious, they’re limited to recovering the basic hire rate, even if they agreed to a higher rate. Where impecuniosity is proven, additional costs like credit provision, recovery risk, and claim administration, are recognised by the courts as legitimate and recoverable.

Signs of greater collaboration are emerging. Horwich Farrelly’s 2025 motor claims report shows a 49% drop in legal costs linked to credit hire since 2023 and a four-day reduction in average hire duration. This suggests the system is becoming more efficient, not less.

Credit hire often makes the difference between being stuck and moving forward after a crash. It’s time the narrative caught up with that reality.