A third party hit a hire car I had rented. As per the hire company’s terms and conditions, I had to pay the repair amount of $1,600 from my excess (I did not take the daily excess reduction). The third party gave me their details, photographic evidence, a police report, etc and this was forwarded to the car hire company. The company has been extremely slow to follow this up with the third party’s insurer (this was January 2023) and gave myriad excuses as to why our excess wasn’t refunded, given it wasn’t our fault.
I have now contacted the third party who says he has paid the hire company’s damages claim (albeit only in July). On subsequently contacting the car hire company they tried to brush us off. Surely, if the car hire company gets paid for damages by a third-party insurer, they must reimburse our excess? What are the next steps to take please? The company is not a member of the Australian Car Rental Conciliation Service, so I don’t think we can use their reconciliation service.
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Mark, Victoria
In cases like yours, where a third party is responsible for an accident you were involved in while driving a rental car, it’s generally expected that once the car hire company has recovered costs from that third party, they’ll refund your excess. It sounds like the car hire company you used is obfuscating and making it difficult for you to claim your excess back – but that doesn’t mean you’re not entitled to it.
There’s two primary sources for your claim, and the first is the car hire company’s own terms and conditions. Their terms will set out what excess you’re liable to pay when an accident occurs, so read them closely.
If your rental agreement states you do not have to pay excess, or your excess is limited if the company determines you are not at fault, then you should make a note of those terms.
The second source is in legislation, which includes the Australian Consumer Law and the relevant consumer law in your jurisdiction. The ACCC website notes that you do have rights under consumer law when hiring a car, including consumer guarantees which mean you’re entitled to a product or service functioning the way you expect it to. Further, businesses are not allowed to mislead you or make false claims, so depending on your rental agreement, you might be able to argue that by not refunding your excess, the service terms they gave you are false or misleading.
In terms of next steps, the first thing to do is compile your evidence. This includes your rental agreement, any paperwork arising out of your claim and evidence that you were not at fault, and any documentation that shows the third party’s insurer has compensated the car hire company for their loss.
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Second, put this evidence in writing to the car hire company. Tell them if you can’t reach a resolution, you will lodge a complaint with the relevant consumer affairs body in your state. The prospect of facing the administrative, reputational and financial burdens of dealing with regulators can really motivate a business to honour their obligations to you. Hopefully at this point the company will refund your excess.
If they don’t, you can lodge a complaint with your jurisdictional consumer complaints authority, or the ACCC. They will be able to investigate your complaint, which will include communicating with the car hire company on your behalf.
It’s worth noting the ACCC advises that when you’re in an accident that was the fault of a third party while driving a hire car, you should “ensure a written agreement is made with the company about costs and procedures for fixing the damage before leaving the premises” when you return the car.
If you have this – great! You can include this in your evidence pack. If you don’t have it, I suggest first going back to the car hire company and asking them to put the reason they will not pay your excess in writing, and what factors they are relying on to potentially invalidate their own terms and conditions.
You have a very real case to make for yourself here, and while it’s been quite the journey for you since January, it may be worth continuing to pursue it, given you could recover a significant amount of money.
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