Recent research carried out by Swiftcover has revealed a shocking increase in costs for motorists who are involved in road accidents, costs which appear to be being artificially inflated by credit hire companies. In some cases, it is claimed that some insurance companies are in cahoots with credit hire firms, by way of accepting much higher-than-normal credit hire firm service costs in exchange for a fee.
Credit hire companies do of course offer a very valuable service to motorists who have been involved in a car crash and who need services such as repair or storage for their vehicle, or the hiring of a replacement car. These costs, suggest Swiftcover, are often much higher than normal since it is thought that the insurance provider will cover them. But that increase is eventually passed tonto motorists in the form of higher premiums.
The research estimates that this adds around £200 million of additional costs, all of which are eventually paid for by motorists. While this is a bad situation, it can get a lot worse if an insurer rejects the costings from a credit hire company on the basis of them being too high; this can leave the car owner liable for what might be a very large bill indeed.
Martin Andrews, director general of the Credit Hire Organisation explained that credit hire firms were addressing a real need in the market and were not ‘swindling’ motorists.
But the Office of Fair Trading is on the war path on this one, also accepting that premiums are artificially higher because of these practices. Watch this space to see if credit hire prices come down in the near future. Thankfully such pitfalls are not present in the world of car breakdown cover.
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