What Is a Credit Hire Agreement

If you have been involved in a car accident that was not your fault, you may be entitled to a credit hire agreement. But what exactly is a credit hire agreement?

A credit hire agreement is a contract between a car hire company and the driver who has suffered a car accident. The driver who has suffered the accident is entitled to hire a replacement car while their own car is being repaired or until they receive a settlement from their insurance company. The cost of hiring the replacement car is usually covered by the at-fault driver`s insurance company.

The reason why it is called a credit hire agreement is because the car hire company will provide the replacement car « on credit. » This means that the driver who has suffered the accident will not need to pay for the cost of the car hire upfront. Instead, the car hire company will bill the at-fault driver`s insurance company directly for the cost of the hire.

However, it is important to note that the at-fault driver`s insurance company may dispute the cost of the hire, especially if they believe that the cost is too high or that the driver who has suffered the accident did not take reasonable steps to minimize the cost. In such cases, the driver who has suffered the accident may need to pay some or all of the cost of the car hire out of their pocket.

Credit hire agreements can be complex and confusing, especially if you are not familiar with the legal procedures involved. It is therefore important to seek legal advice if you have been involved in a car accident and are considering entering into a credit hire agreement.

In conclusion, a credit hire agreement is a contract between a car hire company and the driver who has suffered a car accident to provide a replacement car on credit. The cost of the hire is usually covered by the at-fault driver`s insurance company. However, it is important to seek legal advice if you are considering entering into a credit hire agreement, as the process can be complicated and may involve disputes with insurance companies.