How credit hire companies make their money

Accidents happen. However, under common law anyone who is involved in an accident for which someone else is adjudged to be at blame can make a claim for compensation, either from that person or that person's insurers, for a sufficiently large sum to put them back into the same or a similar financial situation that they were in before the accident.

If an accident occurred and the injured party's car needed to be repaired, that would mean that they would be without a vehicle until the work had been completed and the car delivered back to them. They would need a loan car to use until this had been done, but where would they find one?

Meet the credit hire companies. They exist to loan cars to motorists in this situation, and they make their income from charging their fees to the insurance company that covered the person responsible for the accident.

This would be okay if their fees weren't so heavy. On average however this adds up to an eye-popping £1500 per claim!

It isn't just the hire company which is doing well out of this deal either. It is quite likely that the garage concerned tipped them off, and received a commission of several hundred pounds for doing so.

Some industry insiders have speculated, no doubt erroneously, that there is often a delay before one of these companies can deliver a replacement vehicle so that repairs cannot be started before a weekend; meaning that the hire period extends for another two days. It is also sometimes very strange to hear about cars being sat in garages for a long while 'waiting for parts' when these are easily available from companies who operate very fast deliveries, often several times per day. In the meanwhile the bill that the credit hire company will be presenting to the insurance company is getting bigger and bigger. stop

One could feel very sorry for the insurance companies, if it was not for the fact that so many of them pass on their clients' details to these car hire firms themselves; in exchange, of course, for a fat fee. After all, it is the customer, namely you and I, who will be picking up the bill at the end of the day, not them.

it has been estimated that every single car insurance premium in Britain is inflated by £44 in order to pay the bills of credit hire companies.

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