Insurers accused of inflating credit hire costs

Anti-Jackson review campaigners have accused insurers of inflating the cost of credit hire replacement vehicles.

According to research from the Access to Justice Action Group (AJAG), the cost of hiring vehicles out from car rental companies for a week can be up £462.66 cheaper than the rate set in the ABI’s general terms of agreement. 

The group’s study says that the GTA weekly rate for a prestige vehicle is £779.66, while hire company Sixt rents out BMW Series 3 for just £320.95.

AJAG Co-ordinator Andrew Dismore said: “The insurance companies are always ready to blame others for the cost of car insurance. This research shows they are part of the problem. Under the official Association of British Insurers’ (ABI) GTA rates, the cost to hire a medium sized family car for a week is set at £349. The average on the regular market to rent a similar car is £172 and the cheapest comparator would have cost £224 less than the ABI rate. Similar huge differences apply for all classes of credit hire, from small cars to white vans and prestige vehicles.

“The law quite rightly says that if you have an accident that is the fault of another, you are entitled to have the damage to your car repaired. Whilst your vehicle is off the road, (or until ‘written off’) you are entitled to claim for the cost of a replacement. But under the ABI’s merry-go-round the object is to beat the other insurer to the claimant, incited by the GTA agreement procedures, and to claim these exorbitant rates.

“The solution is to end the ABI’s sweetheart deal with the credit hirers as to the charging rates. The primary obligation to provide a replacement vehicle should lie with the liability insurer. And there needs to be a set timetable for maximum default hiring periods and repairs at a fair cost.”