Courtesy car or replacement taxi: what is the difference?

A courtesy car follows its own terms

A courtesy car may be provided under an insurance policy or a repair arrangement. Size, availability and duration depend on those terms. It may be a standard private car without the licensing or insurance needed for taxi work.

Credit hire defers the hire charges

With credit hire you sign a separate agreement. The provider seeks recovery of reasonable hire charges from the responsible party or insurer. Your own obligations and possible responsibility for unrecovered charges must be understood before signing.

Ordinary rental is another arrangement

In an ordinary rental you pay the agreed charges. Standard car rental commonly restricts commercial passenger use, so do not assume an ordinary rental car can be used as a taxi. Check permission, licensing and insurance expressly.

Compare the whole arrangement

• Can you legally use the vehicle for your normal work?
• What costs or excesses could apply?
• Who pays if recovery is unsuccessful?
• How long is the vehicle available?
• What evidence and cooperation are required?

Choose based on your circumstances

There is no single option that suits every driver. Ask your insurer what your policy provides and read any proposed hire agreement. See the Financial Ombudsman’s credit hire information.

Can a courtesy car be used for private hire?

Only if the complete arrangement permits the intended work. Check the vehicle’s licence, driver entitlement, insurance and operator requirements. A car described as a courtesy car is not automatically approved for paid passenger journeys.