Who Pays for a Hire Car After a Not at Fault Accident?
Your car is off the road through no fault of your own, and life does not stop. You still have to get to work, do the school run and manage everything else that depends on having a vehicle. So one of the first practical questions after a not at fault accident is a simple one. Who pays for a hire car while mine is being repaired or replaced?
The good news is that if someone else caused the accident, you are generally entitled to be put back in the position you were in before it, and that includes not being left without a car. But how you get a replacement vehicle, and who ultimately foots the bill, depends on the path you take, and there are some traps worth knowing about, particularly with the accident replacement vehicles that are heavily advertised.
This guide explains your right to a hire car when you were not at fault, the different ways to get one, what counts as reasonable, and what to watch out for. Please treat it as general information rather than advice about your own situation, and you should seek advice about your particular circumstances before making decisions.
Are you entitled to a hire car if you were not at fault?
In general terms, yes. When another driver is at fault for damaging your car, the law aims to restore you to the position you would have been in had the accident never happened. Being deprived of your vehicle is a real loss, often called loss of use, and the reasonable cost of a replacement vehicle while yours is being repaired or replaced is something you can generally recover from the driver at fault, or their insurer.
It is important to be clear about which system this falls under. Your right to a hire car is a property and economic loss matter, recovered from the at fault party under the general law. It is not part of the CTP scheme, which covers personal injury only and does not pay for cars or hire vehicles at all. We explain that division in our guide on CTP versus property damage insurance. So a hire car claim stands separately from any injury claim you might also have.
The entitlement is not unlimited, though. It rests on a few conditions, chiefly that the other driver was at fault, that you genuinely needed a replacement vehicle, and that the cost and the length of the hire were reasonable.
The different ways to get a replacement vehicle
While the at fault driver ultimately bears the cost, there are several routes to actually getting a car in your hands, and they work quite differently. The table below sets them out.
| Option | How it works | What to watch for |
|---|---|---|
| Your own comprehensive insurance | If your policy includes a hire car benefit, your insurer arranges the vehicle | Often limited to a set number of days, or not included at all |
| Accident replacement vehicle (credit hire) | A provider gives you a car with nothing to pay upfront, then recovers the cost from the at fault insurer | Depending on the agreement you sign, you may become liable for the cost if the recovery fails, and rates and terms vary |
| Claiming directly from the at fault driver | You arrange and pay for a hire car, then seek the cost back from the driver or their insurer | You are out of pocket in the meantime and must show the cost was reasonable |
Each has its place. Your own comprehensive policy can be the simplest option if it includes a hire car benefit, though many policies either do not, or limit it to a short period. Claiming directly gives you control but means paying upfront. And accident replacement, discussed next, is the option most heavily marketed, and the one that most warrants care.
What counts as a reasonable hire car
Because the at fault party only has to cover what is reasonable, it helps to understand what that means in practice, as this is where disputes most often arise.
The vehicle should be reasonably equivalent to your own, not a significant upgrade. If you drive a small hatchback, hiring a luxury four wheel drive is likely to be challenged, because you are entitled to a comparable replacement, not a better one.
The hire period should be reasonable, meaning the time genuinely needed to repair your car or, if it is written off, to sort out its replacement. Hire that drags on without good reason, or continues after your car is ready, is likely to be disputed.
The cost should be reasonable for the type of vehicle and the period. And there should be a genuine need for the car in the first place. If you had no real need to drive during the relevant period, a hire claim is harder to justify.
The underlying principle is that you should be kept whole, not left better off, and a claim that stays within these bounds is far less likely to be resisted.
Accident replacement and credit hire: how it works and what to watch for
Accident replacement vehicles, often arranged through credit hire companies, are widely advertised, and the pitch is appealing. You are provided with a car at no upfront cost, and the company recovers the hire fee from the at fault driver’s insurer, so in theory it costs you nothing.
In many cases it works exactly as promised. But whether you could end up personally liable for the hire cost, for example if the recovery against the at fault insurer fails or falls short, depends on the terms of the agreement you sign, and these vary between providers. Nothing to pay upfront does not necessarily mean nothing to pay ever, so it is essential to read the agreement carefully, be sure you were not at fault, keep the hire reasonable in cost and duration, and get advice before committing if anything is unclear.
What you need to do to protect your claim
Whichever route you take, a few practical steps make recovery far smoother.
Establish that the other driver was at fault, and gather the evidence for it, including the other driver’s details, the circumstances of the accident, photographs, and any witness or camera evidence. Keep your car off the road only for as long as is genuinely needed, and get the repair or assessment moving promptly, so the hire period is not longer than it has to be. Hold on to all documentation, including the hire agreement, invoices and repair records. And choose a replacement vehicle comparable to your own rather than an upgrade.
Acting reasonably throughout, what the law calls mitigating your loss, is the best protection against an insurer arguing that part of your hire claim was unnecessary.
If the at fault insurer will not pay
Sometimes the at fault driver’s insurer disputes the claim, or refuses to pay the full cost, arguing the rate was too high, the period too long, or that fault is not accepted. If that happens, the claim does not simply disappear. A car property damage claim, including the cost of a hire car, can be pursued against the at fault driver in the Local Court, whose Small Claims Division handles claims up to $20,000 and whose General Division handles claims between $20,000 and $100,000 through a more formal process. It is also worth knowing that these claims generally have a much longer time limit than a CTP injury claim, usually up to six years, though acting promptly is still sensible while the evidence is fresh.
How Stephen Young Lawyers can help
Where another driver was at fault and had insurance in place, we can help you pursue your property damage claim, including the reasonable cost of a hire car, against that driver and their insurer. We do not advise on the terms of accident replacement or credit hire agreements, which is a matter between you and the hire provider, but we can pursue the underlying loss caused by the at fault driver.
An experienced personal injury lawyer can advise on your not at fault accident, pursue your losses against the at fault driver and their insurer, and, importantly, make sure that dealing with your car does not distract you from any injury claim you may also have, which runs under the separate CTP scheme with much tighter deadlines. Where you were injured as well as left without a car, the injury claim is usually the more time critical of the two.
For more on how the two sides fit together, see our guides on CTP versus property damage insurance and on how to make a CTP claim in NSW. You can read about your broader options on our motor vehicle accident claims page. As an Accredited Specialist personal injury firm based in Sydney CBD, with a multilingual team and a No Win No Fee approach for eligible matters, we can review your situation and tell you where you stand.
No lawyer can promise you a particular outcome, and every claim turns on its own facts. What can be said is that a not at fault driver should not have to go without a car, and that understanding how hire car recovery works helps you get a replacement without getting caught out.
Speak with an experienced motor accident lawyer today
If you have been left without a car after a not at fault accident in New South Wales, or you are unsure about an accident replacement agreement you have been offered, it is worth getting clear advice before you commit.
Contact Stephen Young Lawyers today for a free, no obligation consultation. Call us or get in touch through our website to speak with an experienced personal injury lawyer about your accident and your options.