Recently, we shared a blog about how we gained a new client due to the way their previous broker mishandled a claim. The feedback from that article has been excellent, so we’ve decided to follow up with a piece focusing on replacement vehicles after an accident and what you should be aware of when navigating your options.

Claims – “I’m Not at Fault and I’ve Been Offered a Free Courtesy Car”

If you’re involved in an accident that wasn’t your fault, you’ll often receive multiple calls, texts, or letters from companies offering you a replacement vehicle. This is usually while your own car is being repaired, or while you’re waiting for settlement if your vehicle is beyond econonical to repair or written off (a total loss).

But what are your options when it comes to accepting a replacement vehicle, and what should you consider?

Courtesy Car

If your vehicle is repairable, your insurer may arrange a courtesy car usually provided through one of their approved repairers, subject to availability. This is typically offered at no or minimal cost to the insurer, but it’s not guaranteed.

The courtesy car is usually a small vehicle, such as a Ford Fiesta, so it’s unlikely to match the size, specification, or value of your own car. If your vehicle is written off (declared a total loss), you are unlikely to be offered a courtesy vehicle at all.

With a courtesy car, you’ll only need to cover fuel costs and any insurance excess if the vehicle is damaged or stolen. If you don’t need to travel far or require a like-for-like replacement, this can be a convenient and cost-effective option worth considering.

Scenario	Will the vehicle be available or be provided?	Comments
At fault	If available but not certain	If provided it will be a small vehicle not a like for like. Will be provided by the repairer often the insurer pays nothing or a limited amount. There is also often limited mileage use applied.
Non fault	No	You are likely to be offered a credit hire vehicle or an intervention vehicle from the at fault third party Insurer.
Theft – non repair	No	N/A

Positives	Negatives
You only pay for fuel and any excess if the vehicle is damaged or stolen.	It is not always going to be available. It will be dependent on the repair network.
No financial or legal risk to you.	The vehicle will be small. So not ideal if you use your vehicle every day or travel long distances. If you exceed the limited mileage, additional charges may be applied.
No extra cost, it is included within the terms of your policy.	Will not be provided if the vehicle is not repaired. i.e. a total loss.
	If you are not at fault, you will be offered a like for like vehicle on a credit hire or intervention basis but you still have the option to use a courtesy car if it’s available.

Replacement Car Via Your Own Policy

When you purchase motor insurance, you may be offered the option to include hire car cover either as part of your main policy or as an additional add-on. This type of cover provides access to a replacement vehicle while your own car is being repaired, or if it’s written off, while you wait for a settlement to replace it.

These policies usually offer different levels of cover, which may specify the size or type of vehicle provided and the length of time you can use it typically up to 14 or 21 days.

If you’re at fault for the accident, your replacement vehicle will be arranged according to the terms of your policy. However, if you’re not at fault, you will often be offered a credit hire vehicle, regardless of whether you purchased replacement car cover.

Credit hire can be a useful solution, as it often provides a like-for-like replacement vehicle. If you rely on a larger car or regularly travel long distances, this may be the most suitable option. However, it usually comes at a higher cost and may have certain limitations or conditions to be aware of.

Scenario	Will the vehicle be available or be provided?	Comments
At fault	Yes	The vehicle type will be dependent on the level of cover selected but could be an equivalent, like for like.
Non fault	Yes	You are likely to be offered a credit hire vehicle or an intervention vehicle from the at fault third party insurer.
Theft – Non repair	Yes	Many policies will provide a vehicle for non repair cases also, So will cover a period if your vehicle is stolen and not recovered.

Positives	Negatives
The vehicle will be larger than a courtesy vehicle. Possibly up to a like for like vehicle.	You need to pay an additional premium to access this option.
You only pay for fuel and any excess if the vehicle is damaged or stolen.	The period of hire is limited to up to 14 or 21 days.
You have access to a vehicle even if you are at fault.	If you are non-fault, you will more than likely be offered a credit hire or intervention vehicle solution. If your insurer refers you to credit hire, your Insurer will profit from you.
No financial or legal risk to you on fault cases	If you are not at fault and use credit hire there is a small risk.

Replacement Vehicle Provided By The At Fault, and Liable Third-Party Insurer

It can take time for third-party insurers to investigate an accident and decide who is liable. Because of this, you may not receive an offer of a replacement vehicle immediately and sometimes the offer arrives after you’ve already needed one.

However, once liability is accepted and a vehicle is offered, this is often the best option for most people. The risks are minimal, and you’ll typically receive a like-for-like or equivalent-sized vehicle for the full duration of repairs, or until you receive settlement funds if your car is written off (a total loss).

Scenario	Will the vehicle be available or be provided?	Comments
At fault	No	You will not be offered a vehicle by the third-party insurers.
Non fault	Possibly	If the third-party insurers are proactive and can agree to liability, then they will seek to intervene and offer you. a like for like a replacement vehicle.
Theft – Non repair	No	You will not be offered a vehicle by the third-party insurers.

Positives	Negatives
The vehicle will be offered on a like for like basis.	An offer may not be made to you or long after you need the vehicle.
You only pay for fuel and any excess if the vehicle is damaged or stolen.	You will not be offered a vehicle if you are at fault or if your vehicle is a total loss.
No financial or legal risk

Replacement Vehicle Provided To You When You’re Not At Fault

In many cases, if you’re not at fault for an accident, your insurer, broker, solicitor, or repairer may refer you to a credit hire company. This is often because they receive a commission for the referral, sometimes amounting to several hundred pounds.

If you proceed, you’ll be asked to sign a credit hire agreement, which typically includes:

• Credit terms (usually allowing repayment in up to 12 instalments over 12 months if needed)
• A mitigation statement (confirming your need for the vehicle and agreement to manage costs responsibly)
• A 14-day cancellation period

Your Responsibilities when entering into a credit hire agreement, you have a legal duty to:

• Be honest about your need for the replacement vehicle
• Assist the credit hire company in recovering costs from the at-fault party’s insurer
• Provide necessary documentation, including your driving licence, insurance certificate, vehicle V5, and—if you cannot afford to hire a vehicle privately—proof of financial means (such as bank statements or loan details)

If the credit hire company cannot reach a settlement with the third-party insurer, they may need to issue legal proceedings in your name. You will be required to support this process, though in most cases you won’t have to pay anything unless you fail to cooperate or provide misleading information.

Things to Consider

• Credit hire is a legally binding contract, so it’s essential to read and understand the terms before signing.
• In most cases, credit hire offers access to a like-for-like replacement vehicle, which can be the best option if you need a larger or specialist car.
• If you’re happy to support the recovery process and agree to the terms, credit hire can be a practical solution when you’re not at fault for an accident.

Scenario	Will the vehicle be available or be provided?	Comments
At fault	No	You will not be offered a vehicle by the credit hire firm.
Non fault	Possibly	It is likely your insurer or broker will refer your details to a credit hire firm. If they agree liability is clear and after you have provided details and signed a contract, they will provide a vehicle to you.
Theft – Non repair	No	You will not be offered a vehicle by the credit hire firm.

Positives	Negatives
The vehicle will be offered on a like for like basis.	You will only be offered a vehicle if you sign a credit hire agreement and meet the criteria of the credit hire company and liability is clearly in your favour, at least 50% or more.
	You will not be offered a vehicle if you are at fault or if your vehicle is a total loss.
	You are signing a credit hire agreement, a mitigation statement of truth, so there is a risk.
	You will need to provide evidence and support the recovery process.