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Accident car hire companies taking consumers for a ride

Customers of accident car hire companies have been unfairly pursued for tens of thousands of dollars.

Last updated: 06 December 2022


Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Consumer groups say they have seen customers get into financial trouble with accident car hire companies
  • Companies promise no cost to you if you are the not-at-fault driver, but in some instances pursue you for charges
  • CHOICE experts say there are more affordable and safer options for those looking for a replacement vehicle after an accident

If you get in a car accident and it's not your fault, depending on your insurance policy, you may or may not be offered a replacement vehicle while yours is being repaired. 

If you're not covered for this, you may consider getting a replacement vehicle from one of a slew of companies offering their services to you at "no cost". 

There are a tonne of companies offering these services, such as Right2Drive, Not My Fault, I'm In The Right and Carbiz.

While the premise of these businesses seems simple enough, it's important that anyone making use of their services understands exactly what they're signing up to. 

While the not-at-fault driver may get a hire car in the short term, they may not realise that if the at-fault driver or their insurer doesn't agree to pay the company for your hire car, the accident car hire company may commence legal action against them in your name.

Right2Drive, I'm In The Right and Carbiz all say commencing legal action is an option they can take. Not My Fault doesn't mention it on their webpage and did not respond to requests for a comment.

Advocates and counsellors advise caution

Financial counsellors  and consumer rights advocates in Victoria and New South Wales are warning customers about the hidden dangers of doing business with accident car hire companies. 

Customers who sign up to their services may do so in response to advertising, but they may also be referred to these firms by tow truck drivers and smash repairers.

When contacted by CHOICE, I'm In the Right wouldn't say whether these third-party businesses receive a commission or other payment for these referrals. Not My Fault and Carbiz didn't respond to requests for a comment. Right2Drive said it pays a "nominal fee" for a successful referral of a customer to the company, as was common across the sector.


There can be hidden dangers in signing on with accident car hire companies that promise 'no charge'.

Driving into litigation

"Litigation always involves risks and consequences," says Cat Newtown of the Consumer Action Law Centre in Melbourne. "So any decision to commence litigation should be made after careful consideration and independent legal advice – and not by a hire car company." 

Accident car hire companies' services can be very expensive and risky if organised by a third party, says Newton, and some customers don't understand what's buried in the fine print until it's too late. The overall costs charged per day by accident car hire companies may be significantly higher than the cost of organising a hire car through your insurer. 

Some customers don't understand what's buried in the fine print until it's too late

"We hear concerns that people didn't understand the documents, didn't understand they would ultimately be on the hook for any unpaid hire car charges, and didn't understand they might end up with time-consuming and stressful litigation in their name," Newton adds. "That can cause unexpected stress, anxiety and cost from a service that people expected to help them." 

While it is possible for insurers acting on your behalf to commence legal proceedings in your name, consumer groups note that these companies are not your insurer and may not be acting in your best interests. 

The insurance industry is also concerned about accident car hire companies, with large insurers expressing concerns off the record that some are portraying themselves to customers as working with or for the insurer, when in fact there is no relationship between the two.

When it goes wrong

Newton also warns that they've seen cases where the company has gone to collect the cost of a hire car from the not-at-fault driver who signed up for the service in the first place. 

That was the case for Botum*, who got a hire car through Right2Drive after an accident in 2021 that wasn't her fault. 

This year, Right2Drive sent her an invoice for more than $20,000.

Botum, who has limited English, says the contract was never properly explained to her and she had no idea that she'd be held liable for the costs if she didn't help the company with their litigation against the other driver. 

"It has been very, very stressful. I think Right2Drive is not being honest to me, they charged me, it's not right," she says.

Right2Drive responds

Right2Drive tells CHOICE that it's helped 250,000 motorists get back on the road, and that insurance companies don't want you to know about your legal rights for a hire car when there is an accident. 

"If the insurance company of the at-fault driver fails to comply with their legal obligations, our customers are not liable for these costs," a spokesperson says.

"As long as customers are honest and provide assistance that is consistent with the T&Cs they agreed to, Right2Drive does not seek costs from not-at-fault motorists in these circumstances, nor are our customers ever liable for legal costs. This is a risk that we take on behalf of our customers, not one our customers take."

black car on road in accident

Check your car insurance policy to see if your cover includes a hire car after an accident.

Getting help from your insurer

Jodi Bird from CHOICE's money and travel team says customers need to understand what their car insurance will or won't cover. 

"All comprehensive car insurance policies have some level of rental car cover. Sometimes it's included in the policy and sometimes you can buy it as an optional add on. 

"If you're not at fault, about half of the policies include some cover and the other half charge an extra fee for optional cover. The best policies include cover for car rental of a car similar to your own until your claim is settled, while the lowest cover policies charge you an extra fee to cover you for 14 days at $65 per day."

Newton from Consumer Action says the business model of these accident car hire companies can lead to more complications than the customer bargained for, and that consumers should pursue other options. 

"People need to be really cautious and steer clear," she says. 

* Name has been changed.

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Stock images: Getty, unless otherwise stated.