ON THE MONEY: Worth falling in love with like-for-like replacement?
22 July 2008
The concept of credit hire - the provision of a vehicle of equal standing to a driver's own in the event of a non-fault accident - is gaining ground and should be assessed, says Rupert Saunders
One of the many pitfalls of running a fleet is paying for things without even realising it. Or maybe paying for things which could be avoided. Take parking dings.
Analysis by accident management firm Accident Exchange of insurance claims over the past two years reveals one in five of all reported incidents involved damage to a parked vehicle. With the cost of repair averaging £1800, that amounts to 700,000 scrapes or bangs with another parked car every year, leaving UK drivers with an estimated £1.25bn repair bill.
It's fair to assume that a significant proportion of those will be business car drivers, and, slight dings or scrapes are not good for business - especially if a car is coming to the end of its lease period and there are going to be damage repair charges.
Of course, there is a problem with establishing blame. Or, more importantly in the case of any car accident, establishing innocence, because the innocent motorist has significant rights that should be funded by the guilty party's insurance company.
The concept is called 'credit hire' and it's just as valid to the business car industry as it is in the private sector. In essence, the innocent motorist has the right to remain mobile in a vehicle of equal standing to their own during the repair process and to choose where the damaged car is going to be repaired.
"The provision of a like-for-like vehicle in the event of a non-fault accident for a business-user, when the vehicle is a significant tool of the trade, can never be underestimated," says Tim Eaves, corporate sales director at Accident Exchange.
"This is even more apparent when the vehicle in question is a prestige marque. Being offered a Ford Mondeo, when your normal means of transport is a Merc E-class, does little for driver morale or the image of your company.
"Although credit hire is still a very young support sector to the business car market, it is seen as a valuable service. The ability to offer replacement vehicles with no cost implication or financial risk for corporate users is a unique win-win situation."
Most business car operators will have some form of accident management, either directly or through a contract hire provider. Backing up that process should be a credit hire provider, such as Accident Exchange, Helphire or MSL (among others), with a ready supply of vehicles and the ability to keep your drivers on the road.
The trick is not to phone the insurance company. Instead, call your contract hire provider and ask them to handle the claim. Indeed, it may even work if you have bought cars outright, since more and more dealers are running brand-specific accident management programmes. Either way, if you are being offered courtesy cars that don't match drivers' expectations, or are being charged for accident management services when you are the innocent party, it's worth asking