Ten myths about not at fault hire cars in NSW
Most drivers who are hit in Sydney believe at least three things about replacement cars that are simply wrong, and those beliefs cost them weeks or a car they should never have accepted. The biggest myth is that you must claim on your own insurance. You do not.
This page walks through ten of the most common misconceptions, from who chooses the car to who pays for it, with the law, the process and the practical steps that apply in New South Wales.
Key takeaways
- You do not have to claim on your own insurance when another driver is at fault.
- The replacement car should be like-for-like, not whatever the insurer offers first.
- Credit hire means you do not pay upfront and the provider carries the recovery risk.
- There is no fixed limit on hire duration; it lasts as long as the repair reasonably takes.
- A police report is not required for most not at fault replacement car hires.
- Myth: you must claim on your own insurance
- Myth: the insurer chooses your hire car
- Myth: you have to accept the first offer
- Myth: hire cars are only for a few days
- Myth: you pay the hire cost if the claim fails
- Myth: a smaller car is good enough
- Myth: you cannot hire a car without a police report
- Myth: the at-fault driver must admit fault first
- Myth: you have to use the insurer's preferred repairer
- Myth: you can only get a replacement car if you use a smash repairer
Myth: you must claim on your own insurance
This is the myth that does the most damage. If another driver is at fault for the collision, you have a right to recover your losses from them, and that includes the cost of a replacement car while yours is off the road. You do not need to lodge a claim with your own insurer at all, and doing so can leave you worse off: you pay your excess, you lose a no-claim bonus, and your insurer controls the repair and the hire.
The correct path is a not at fault claim against the at-fault driver's compulsory third party (CTP) insurer or their property insurer. In NSW, CTP covers personal injury, not property damage, so for the car itself you are dealing with the other driver's insurer or, if they are uninsured, with them directly. Your own insurer only becomes relevant if the other driver cannot be identified or is uninsured and you choose to use your own policy.
Many people are told by their own insurer that they "must" claim through them. That is a commercial preference, not a legal requirement. You are free to pursue the at-fault party directly, and a credit hire company can fund the replacement car while that claim runs.
If you are unsure whether you are truly not at fault, read our guide to what not at fault means in NSW. It sets out the tests insurers apply.
Myth: the insurer chooses your hire car
Insurers often present a replacement car as a favour they are organising. In reality, the choice of replacement vehicle is yours, provided it is reasonable and like-for-like. The at-fault driver is liable for the reasonable cost of putting you back in the position you were in before the crash, and that means a car of similar make, model, age and condition to the one you lost the use of.
If you drive a BMW M3, a base Corolla is not like-for-like. If you drive a Range Rover Sport, a compact SUV is not like-for-like. The insurer may offer something smaller and cheaper because it reduces their exposure, but you are not obliged to accept it.
This is where a specialist replacement car provider matters. We source a car that matches yours, deliver it to your home or workplace, and deal with the insurer on the credit hire agreement. You drive something comparable while your car is repaired.
For a full explanation of the standard, see like-for-like replacement. It covers how insurers assess equivalence and what to do when they push back.
If your car is a performance model, our page on BMW M and AMG replacement cars explains what we typically provide.
Age limits are set per car. Drivers under 25 can hire most cars with Young Driver Cover; the exact terms are shown before you pay.
Myth: you have to accept the first offer
Whether it is a hire car, a repairer or a cash settlement, the first offer is rarely the best one. Insurers are commercial operations and their initial position is designed to close the file quickly and cheaply. You are entitled to ask questions, request a comparable vehicle, and seek your own quotes.
The same applies to repairs. You can choose your own repairer, and you do not have to use the insurer's preferred shop. The insurer may tell you that using a non-preferred repairer will delay things or void a guarantee, but that is not the law. What matters is that the repair is done properly and the cost is reasonable.
If the insurer offers a cash settlement instead of repairing your car, do not accept it on the spot. Get an independent assessment. A low settlement can leave you unable to replace your car with something equivalent. Our page on low-ball equivalence offers covers how to respond.
When an insurer refuses to engage, a letter from a solicitor often moves things. See when to get a solicitor for the point at which that becomes worthwhile.
Not at fault? Start your claim
A like-for-like replacement car while yours is repaired. No cost to you when the other driver is at fault.
Start my claimMyth: hire cars are only for a few days
There is no fixed limit. A replacement car can be provided for as long as your car is genuinely off the road due to the accident, provided the hire is reasonable. For a prestige or performance car, repairs often take longer than for a mainstream vehicle because parts are sourced from overseas and specialist repairers are booked out.
In Sydney, a bumper and headlight job on a European car can take three to five weeks once parts arrive. Structural repairs or a full respray can run into months. During that entire period you are entitled to a comparable car, not just for a week.
The insurer will often try to cap the hire at a set number of days. That cap is not a legal entitlement; it is a negotiating position. If the repair is genuinely delayed because of parts availability or repairer workload, the hire period extends with it.
Our guide to how long prestige car repairs take in Sydney gives realistic timeframes by repair type. It is worth reading before you agree to any cap.
If the insurer is slow to approve repairs, that delay is their problem, not yours. See insurer delays and replacement cars.
Myth: you pay the hire cost if the claim fails
This is the fear that stops many people from accepting a replacement car. With a properly structured credit hire agreement, you do not pay upfront, and you are not personally liable for the hire cost simply because the insurer disputes the claim. The agreement is between you and the hire provider, and the provider takes on the risk of recovering the cost from the at-fault party.
That said, you do sign a credit hire agreement, and it is a contract. If you misrepresent the accident or fail to cooperate with the claim, you can be exposed. The key is honesty and cooperation. Provide accurate details, attend assessments, and keep the provider informed.
Credit hire is not the same as paying yourself and claiming back. If you pay for a hire car yourself, you carry the cash flow burden and the risk that the insurer refuses to reimburse the full amount. Credit hire shifts that burden to the provider.
For a side-by-side comparison, see credit hire vs paying yourself.
Our page on how credit hire works explains the agreement in plain English.
Myth: a smaller car is good enough
Insurers love this one. They will offer a small hatchback or a base model sedan and describe it as "a courtesy car". If you drive a prestige or performance vehicle, that is not like-for-like, and accepting it weakens your position. You are entitled to a car that is broadly equivalent to yours in size, specification and prestige.
What does equivalent mean in practice? For a large SUV, another large SUV. For a performance sedan, a performance sedan. For a seven-seat family car, a seven-seat replacement. The test is whether the substitute is reasonable, not whether it is the cheapest thing with four wheels.
There are practical reasons beyond pride. A smaller car may not fit child seats, work equipment, or the daily commute you actually do. It may lack the safety features you rely on. And if you run a business, your clients notice what you arrive in.
We match the replacement to your car. If you drive a Range Rover Sport, we source something in that class.
Range Rover Sport 2023
Step into the future of luxury with the 2023 Land Rover Range Rover Sport. Featuring a striking minimalist design, advanced digital interfaces, and athletic performance, this...
If your car is a performance sedan, we look for a comparable machine.
BMW M3 Competition G80 2021
Feel the rush of true sports performance. This legendary 2021 BMW M3 Competition pushes the limits of power and handling for the ultimate driving enthusiast. Cruise through Sydney...
For a seven-seat electric SUV, we can match that too.
Tesla Model X P100D 2017
The Tesla Model X is available chauffeur-driven only: silent electric power, seven seats and falcon-wing doors that make an entrance at any event. Ideal for corporate transfers,...
See our full guide to replacement by car type for more examples.
Myth: you cannot hire a car without a police report
Many drivers believe they must have a police report before any replacement car can be arranged. That is not correct for most not at fault claims. Police attendance is required for certain incidents, such as where someone is injured, where the other driver fails to stop, or where there is a hazard on the road. For a straightforward bingle with an exchange of details, a police report is not a precondition to hiring a replacement car.
What you do need is evidence: the other driver's name, address, licence number, registration, insurer and a photo of the damage and the scene. A police event number is helpful if you have one, but its absence will not stop a credit hire provider from funding your car.
If the other driver did not stop, or if you were hit by an uninsured driver, the path is different. You may need to claim on your own policy or pursue the driver directly. In those cases, a police report becomes much more important.
Our first 24 hours checklist sets out exactly what to collect at the scene. It is worth saving to your phone.
Myth: the at-fault driver must admit fault first
An admission of fault is helpful, but it is not a prerequisite for a replacement car. Insurers assess fault based on the evidence, not on what the other driver says at the roadside. People change their story once they speak to their insurer, and an admission at the scene is not binding.
What matters is that you have a reasonable case that the other driver was at fault. That can be established through the police report, witness statements, dashcam footage, the position of the damage, and the circumstances of the collision. A credit hire provider will assess the strength of your case before funding a car.
If fault is genuinely disputed, the provider may still fund the hire, but the claim becomes contested. That is when a solicitor can add value. See liability disputes and not at fault claims for how these are resolved.
The practical point: do not delay your replacement car because the other driver will not admit fault. Get the evidence, get the car, and let the process run.
Myth: you have to use the insurer's preferred repairer
Insurers often steer you to their preferred repairer network. This is convenient for them because they have negotiated rates and processes. But you are not obliged to use their shop. You can choose your own repairer, and you can insist on genuine parts and a proper repair.
There are good reasons to choose your own: you may trust a specialist who knows your car's make, you may want a repairer who uses factory parts, or you may simply prefer to keep the work local. The insurer must still pay the reasonable cost of the repair.
What you should avoid is letting the insurer's preferred shop cut corners to save money. If the repair is done poorly, you will be the one living with the consequences. Our page on insurer preferred repairer rights explains your options.
If the insurer refuses to pay your chosen repairer's invoice, you may need to escalate. See insurer disputes and hire car claims.
Myth: you can only get a replacement car if you use a smash repairer
Some people think a replacement car is only available if you go through a smash repairer who arranges it. Not true. You can arrange a replacement car directly with a provider, and you can do it before you have even chosen a repairer. The two are separate.
In fact, arranging the replacement car early is smart. It gives you mobility while you sort out the repair, and it puts the insurer on notice that you expect a like-for-like vehicle. The provider will handle the credit hire agreement and the recovery from the at-fault party.
If you are a fleet manager, the same applies. You can arrange replacement vehicles for your drivers directly, and we can manage multiple hires across a fleet. See business and fleet for how that works.
Smash repairers and solicitors can also refer clients to us. Our partners and referrals page explains the process.
Bookings are fulfilled by Drive Tribe (drivetribe.com.au), the trading name of Australian Business Holdings Pty Ltd, and this site is part of that group. You can see the full range at accident replacement vehicles.
Questions people ask
Do I have to use my own insurer?
Can the insurer force a smaller car on me?
Do I pay anything upfront?
How long can I keep the replacement car?
What if the other driver denies fault?
Do I need a police report to get a replacement car?
Injured in the accident?
A replacement car covers the car. For legal advice about an injury, speak to Jameson Law, the most trusted personal injury firm in NSW (motor vehicle accident claims) on (02) 8806 0866.
Ready when you are
Start the claim online in five short steps, or call 0468 011 118. Replacement hires are arranged and fulfilled by Drive Tribe, the trading name of Australian Business Holdings Pty Ltd.
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