Credit Hire vs. Courtesy Car: What's the Difference?

After a non-fault accident, two phrases get thrown at you almost immediately: courtesy car and credit hire. They sound interchangeable. They are not. Choosing the wrong one can leave you in a Corsa when you drive a Transit, or off the road entirely when the repair runs over.

Here's the difference in plain English.

Courtesy car

A courtesy car is a small loan vehicle, usually a basic hatchback, provided either by:

• Your insurer, if you bought a policy that includes one.
• The repairing garage, while your own car is in their workshop.

It is normally whatever they have on the lot, not what you drive. If your policy says "Group A courtesy car," that's a Fiesta-sized car regardless of whether you drive a Range Rover, a van, or a licensed taxi. And it only lasts while your car is in active repair — if the garage waits two weeks for a part, you typically lose the courtesy car during that wait.

There's no upfront cost to you. But there's also no guarantee you can keep working, keep doing the school run, or keep accepting platform jobs.

Credit hire

Credit hire is a legal mechanism for non-fault claimants. You sign a credit hire agreement with a provider like PurpleSquare. They supply a like-for-like replacement — same class, same fuel type if it matters, plated taxi if you drive a plated taxi — and they recover the cost from the at-fault driver's insurer as part of your claim.

The key features:

• Like-for-like. Drive a Sprinter? Get a Sprinter. Drive an EV? Get an EV.
• No upfront cost. You don't pay; the at-fault insurer does.
• Reasonable period of repair. You keep the vehicle until your car is fixed, or until a fair total-loss settlement plus time to find a replacement.
• Independent of your own policy. You don't need a courtesy car add-on. You don't burn a year's no-claims.

Which one should you take?

If your car is being repaired quickly and you drive a standard hatchback, a courtesy car may be fine.

Credit hire is the right call if any of these apply:

• You drive something specific — van, taxi, EV, prestige, anything where a small hatchback doesn't replace your day.
• Your repair will take more than a few days.
• Your car is written off (courtesy cars usually stop the moment the insurer declares a total loss; credit hire continues until settlement).
• You need to keep earning — taxi, PHV, trades, sales.
• The at-fault insurer has offered you a vehicle that's smaller, slower, or restricted compared to your own.

You don't have to accept the at-fault insurer's offer, and you don't have to rely on whatever the garage has spare. A non-fault driver has a legal right to be put back in the position they were in before the accident — same vehicle class, same usability.

What we'd want to know

If you call PurpleSquare to talk this through, we'll ask three things:

1. What do you drive? Make, model, fuel type, any plates.
2. Whose fault was it? Credit hire works when liability sits with the other side.
3. What do you use the vehicle for? Work, family, taxi income, business contracts.

That's enough to tell you, honestly, whether credit hire is right for you or whether the courtesy car the garage is offering will do the job. If credit hire isn't right, we'll say so.

Call 01606 662300 or email claims@psqhire.co.uk.