Many of us will have had to pick up a hire car while our own vehicle goes in for servicing or repairs following an accident.
But a recent court ruling suggests luxury car owners faced with the prospect of picking up a replacement car needn’t necessarily make do with an everyday runabout while their pride and joy is off the road.
David Stedman, a solicitor advocate in our Bristol team, who focuses on disputes involving classic and luxury cars, says normal rules do not apply when it comes to temporary replacement of ‘Supercars’.
He said: “If a driver has an accident they will often need a replacement car while repairs are taking place. But what is the position if your classic or sports car is damaged by another motorist? Are there limits on what kind of car you can hire?”
David said one of the key issues was whether there is a “need” for the replacement vehicle.
“At first glance that test seems to be quite restrictive as an owner of a specialist car may own other cars which he or she could drive instead. Of further interest is whether a ‘need’ for a car can only mean a utilitarian need – so that the driver can simply get from A to B – or whether the test is broader.
“The position is not straightforward – insurers often try and resist it but we are seeing cases where, in the right circumstances, damages for a high end or specialist replacement hire vehicles can be successful.”
This can be seen in a recent case involving Mr Gow, his McLaren 12C and a tractor.
“Reportedly, Mr Gow purchased his McLaren for £190,000 but it was scratched by the owner of a tractor just a few weeks later.”
Mr Gow’s collection already included two Aston Martins and a BMW 5 Series. Deprived of his ‘supercar’ Mr Gow told the tractor driver’s insurance company that a replacement Ferrari would be acceptable while repairs were done to the McLaren.
After two months, a Ferrari was not provided so Mr Gow hired another ‘supercar’ – a Mercedes SLS AMG coupe and presented the insurance company with the bill.
The company refused to pay claiming Mr Gow had other cars to drive and that the damage caused was only a few scratches.
The Court disagreed.
David said: “Initially it must be shown that there is a need for a vehicle at all – this is usually shown by the simple fact that a driver only had access to the damaged car. However, in this case Mr Gow had a number of alternative cars.
“The Court accepted, in these circumstances, that the ‘need’ for a replacement was not simply whether he practically had other cars but whether those cars could replace his use of the McLaren. The other prestigious cars in his collection did not include another similar ‘supercar’.”
If a driver hires an equivalent model to the vehicle damaged, generally the court will base damages on that model unless it can be shown a cheaper vehicle would have been as suitable. This means that where a driver hires an expensive or prestigious vehicle, arguments can be made that this was not reasonable (therefore the cost is not recoverable as damages).
However, there have now been a number of cases where recovery of the hire of a prestigious vehicle has been considered appropriate – it depends on the circumstances.
“In Mr Gow’s case the Judge awarded damages for the hire of the Mercedes and also for the period when he did not have a replacement car. This was because Mr Gow did not have a reasonable replacement for the McLaren in his collection.”
Further, the Mercedes, although still a desirable car, was not equivalent to the McLaren 12C.
“Another argument often raised by an insurer relates to how long the replacement vehicle was hired for. It is worth noting that where the damaged vehicle remains roadworthy it is arguable that the driver should continue to drive their vehicle until the repairing garage is ready and able to commence repairs.
“In that scenario the hire period may be limited to the time taken to do the actual repairs. However, it can still be argued that, despite being roadworthy, the damaged vehicle is no longer suitable for the driver’s needs — Clear damage to a prestigious car may mean the car is no longer suitable.”
David further cautioned that, while a driver who is able to provide evidence of his or her limited financial means may be able to recover of the full amount charged for the hire by a credit hire company, a driver who has financial means is treated differently.
“If a person with savings/available credit uses a credit hire company their recovery is likely to be limited to the basic hire rate which is likely to be significantly less.”
He advises: “When a specialist vehicle is damaged and a high end replacement is required it is wise to obtain legal advice so that the extent to which the cost can subsequently be claimed from the third party or their insurer is clear.
“If the damage has been caused by the owner themselves to their own vehicle the position will depend on the terms of their own insurance policy and its interpretation.”