subject: Credit Hire The Rising Industry [print this page] Credit hire today has become a significant customer service. Prior to 1980, when then industry came into existence, if you wanted to hire a car and recover the cost
of maintenance and repair from the negligent drivers insurer, you were to pay for that to get the money back. And a considerable time, thats much more important to
you got wasted in the whole process. And this lead to the establishment of credit hire industry that since then has helped hundreds of innocent drivers involved in
accidents to have a car on credit.
Credit hire companies supply the car to the individuals on credit and pursue recovery including the cost of hire and other uninsured looses from the negligent party
and their insurers. The main element involved in this entire process is the provision for a replacement vehicle and arranging for its repairs.
The peculiar feature of this industry is that the income is received from the individuals insurance company. The credit hire company provides replacement vehicles
to assure the innocent parties stay mobile till the vehicles get repaired or they receive a cheque in write-off.
Previously the credit hire companies were just involved in legal advisory function on operations and costs. But
often the clients get distracted on wrong path due to so many complications involved and were moved away form their actual objective. But today the credit hire
companies have made the whole process much simpler for the individuals and they now are individuals are able to meet their desired objectives with the expert guidance
and no complications involved and wastage of time.
Insurers, however, didnt liked the principle of paying for this new motor policyholder service and wanted to challenge the need for any payments. While the total
size of the credit hire industry was very small in relation to the claim payments made by insurers but the payout number was significantly increased and they wanted to
control these payout costs. They picked up several ways for that including challenging the legal basis of claim, refusing to pay claims to Credit hire organizations and of course limiting the cost of claims by individuals.
Thus a bigger cost was incurred on these legal challenges. They tried to contest the validity of individual claims, adherence to the Consumer Credit Act,
requirements to mitigate claims and many other areas. Once the legality of credit hire was established they tried to challenge the level of charges.
In response to that the GTA (general terms of agreement) set the administration requirements over and above those necessary to pursue a claim on a purely legal
basis to assist insurers to deal with claims under the scheme and the payment terms and amounts. The GTA therefore provides a centralized framework for agreement on
the basis for settling claims. The main purpose of GAT was to rein the credit hire claims brought to courts. In
practical its aim was to approve the rates that insurers were willing to pay to the innocent drivers.
