Credit Hire Glossary

    Credit hire in Australia has its own legal framework, terminology, and case law. This CreditHire Assist glossary provides plain-language definitions of the key terms used in credit hire claims, disputes, and litigation across Australian jurisdictions. Each entry includes relevant case law citations where applicable.

    A

    Accident Management Company (AMC)
    A company that manages the post-accident process on behalf of a not-at-fault third party. Services typically include arranging a replacement vehicle, coordinating repairs, and managing the recovery claim against the at-fault party's insurer. AMCs often work alongside or overlap with credit hire companies.
    Additional Benefits
    Services provided by a credit hire company beyond the simple provision of a replacement vehicle. In Miller v McKnight [No 2] [2025] WASCA 61, the Court of Appeal identified five additional benefits: credit provision, claims agency, repair liaison, premium roadside assistance, and legal proceedings management. Also referred to as non-compensable benefits.
    APPs (Australian Privacy Principles)
    The 13 privacy principles set out in Schedule 1 of the Privacy Act 1988 (Cth) that regulate how organisations collect, use, store, and disclose personal information. Relevant to credit hire operators handling claimant data.
    Arsalan v Rixon
    Arsalan v Rixon; Nguyen v Cassim [2021] HCA 40. The landmark High Court of Australia decision that confirmed a not-at-fault party is entitled to hire a broadly equivalent replacement vehicle, not just any vehicle that meets basic transport needs. The Court recognised both physical inconvenience and loss of amenity as heads of damage.
    At-Fault Party
    The driver (or their insurer) responsible for causing the motor vehicle collision. The at-fault party is liable for the reasonable costs incurred by the not-at-fault third party, including replacement vehicle hire.

    B

    Bottom of the Range
    An approach to assessing reasonable hire rates where the court uses the lowest available market rate as the benchmark. Applied consistently in NSW and SA. Contrasts with the approach of assessing whether the rate actually charged was unreasonable.
    Broadly Equivalent Vehicle
    A replacement vehicle that is comparable in class, features, and amenity to the damaged vehicle. Established as the standard in Arsalan v Rixon [2021] HCA 40. The High Court did not define precise parameters, but the principle requires more than basic transport needs to be met.

    C

    Claimant
    The not-at-fault party making a claim for losses arising from a motor vehicle collision, including the cost of a replacement vehicle.
    Compass Corp Pty Ltd
    The credit hire company involved in the McKnight v Miller litigation in Western Australia. The case, which progressed through three levels of court, has become a key reference point for credit hire rate disputes and the treatment of non-compensable benefits.
    Contemporaneous Market Rates
    Hire rates obtained from mainstream rental providers at the time the replacement vehicle was hired (not after the event). Courts give greater weight to contemporaneous evidence when assessing the reasonableness of credit hire charges. In McKnight v Miller [2022] WAMAG, Magistrate Darge compared Compass Corp's rate to contemporaneous mainstream rates.
    Credit Hire
    An arrangement where a not-at-fault third party is provided with a replacement vehicle on credit, with the hire charges recovered from the at-fault party's insurer. The claimant typically pays nothing upfront. The credit hire company assumes the risk of recovery.
    Credit Hire Company (CHC)
    A company that provides replacement vehicles to not-at-fault third parties on a credit basis and manages the recovery of hire charges from the at-fault insurer. CHCs in Australia operate largely outside AFCA and financial services regulation.
    Credit Hire Premium
    The difference between a credit hire company's daily rate and the rate charged by a mainstream rental provider for a comparable vehicle. Insurers argue this premium reflects non-compensable benefits rather than the cost of the vehicle itself.

    D

    Damages
    The monetary compensation a claimant is entitled to recover for losses caused by the at-fault party. In credit hire, this includes the reasonable cost of hiring a replacement vehicle and may include consequential losses such as loss of amenity.
    Duty to Mitigate
    The legal obligation on a claimant to take reasonable steps to minimise their losses. In credit hire, this means not incurring unreasonable hire charges. In Miller v McKnight [No 2] [2025] WASCA 61, the Court of Appeal held that hiring at rates well above mainstream market prices, where the premium was attributable to non-compensable benefits, constituted a failure to mitigate.

    F

    Failure to Mitigate
    A defence raised by insurers arguing that the claimant did not take reasonable steps to reduce their hire costs. If established, the court may limit recoverable damages to what would have been incurred had the claimant acted reasonably.

    H

    Hire Period
    The duration for which a replacement vehicle is provided. Typically runs from the date of the accident (or when the vehicle becomes undriveable) until the damaged vehicle is repaired or a total loss settlement is reached. Disputes over hire period often centre on whether the duration was reasonable given the circumstances.

    I

    Impecuniosity
    A claimant's inability to afford a replacement vehicle without credit hire assistance. Lagden v O'Connor [2003] UKHL 64 is persuasive only in Australia; the Australian question is whether the claimant could reasonably have afforded a mainstream hire, and where they could not, credit hire charges may be reasonable.
    Insurance Council of Australia (ICA)
    The representative body for the general insurance industry in Australia. The ICA has been vocal about the growth of credit hire claims, reporting a 400% increase between 2019 and 2022, and has called for regulatory reform of the credit hire sector.
    Insurer Correspondence
    Letters or communications from the at-fault party's insurer, typically challenging the hire rate, hire period, vehicle selection, or liability. CreditHire-Assist is designed to analyse insurer correspondence and draft responses backed by Australian case law.

    L

    Levy DCJ
    The District Court Judge who heard the appeal of McKnight v Miller [2023] WADC 107. Levy DCJ overturned the Magistrate's decision, holding that the question was whether the rate charged was unreasonable (not what a reasonable rate would be), and that the claimant's personal circumstances must be considered.
    Like for Like
    A vehicle of the same or substantially similar make, model, age, and specification as the damaged vehicle. Related to but not identical with the "broadly equivalent" standard set by the High Court in Arsalan.
    Loss of Amenity
    The loss of enjoyment or benefit derived from the use of a specific vehicle, beyond basic transport. Recognised by the High Court in Arsalan v Rixon [2021] HCA 40 as a compensable head of damage. This means a claimant who drove a prestige vehicle is not limited to a basic replacement.

    M

    Magistrate Darge
    The Magistrate who heard McKnight v Miller at first instance in the WA Magistrates Court in 2022. Noted that almost 1,000 credit hire cases were before the Court and that matters "move through the system at a glacial pace." His decision was overturned by the District Court but reinstated by the Court of Appeal.
    Mainstream Market Rate
    The rate charged by conventional car rental companies (e.g., Hertz, Budget, Avis, Enterprise) for comparable vehicles. Used as the benchmark against which credit hire rates are assessed in rate disputes.
    Miller v McKnight
    Miller v McKnight [No 2] [2025] WASCA 61. The Western Australian Court of Appeal decision that held bundled services provided by credit hire companies are non-compensable benefits. The Court reinstated the Magistrate's original dismissal and established that hire charges must be assessed against mainstream market rates. Binding in WA and likely persuasive nationally.
    Mitigation
    See Duty to Mitigate.

    N

    Non-Compensable Benefits
    Services provided by a credit hire company that benefit the claimant but are not recoverable as damages from the at-fault party. Defined in Miller v McKnight [No 2] [2025] WASCA 61 as: credit provision, claims agency, repair liaison, premium roadside assistance, and legal proceedings management.
    Not-at-Fault Third Party
    The driver or vehicle owner who was not responsible for causing the collision and who has a right to recover losses from the at-fault party.

    O

    OAIC (Office of the Australian Information Commissioner)
    The independent Australian Government agency responsible for privacy regulation under the Privacy Act 1988 (Cth). Credit hire companies handling personal information of Australian individuals must comply with the APPs and may be subject to OAIC oversight.

    P

    Patterson v Kenny
    Patterson v Kenny [2017] WADC 58. A Western Australian District Court decision that established the approach of calculating hire rates based on the entire period of hire rather than on a daily rate basis. Referenced in the McKnight v Miller litigation.
    Personal Circumstances
    The individual situation of the claimant, including factors such as employment, family obligations, and financial position. In the District Court appeal of McKnight v Miller, Levy DCJ held that personal circumstances must be considered when assessing mitigation. The Court of Appeal subsequently took a more objective, market-based approach.
    PII (Personally Identifiable Information)
    Data that can identify an individual, such as names, addresses, registration numbers, and contact details. CreditHire-Assist masks PII before any data reaches the AI engine to protect claimant privacy.

    R

    RAC Insurance
    The insurer for Ms Miller in the McKnight v Miller litigation. RAC assessed the reasonable hire rate at $45.33 per day, compared to Compass Corp's charge of $95.88 per day, and made a part payment of $1,901.85.
    Rate Dispute
    A disagreement between a credit hire company and the at-fault insurer over the daily or total hire rate. Rate disputes are the most common area of contention in credit hire litigation. See also Rate Reasonableness and Credit Hire Premium.
    Rate Reasonableness (Mainstream Market Rate)
    Whether the rate claimed is reasonable when benchmarked against the cost of an equivalent replacement vehicle from a mainstream rental provider actually available to the claimant. In Australian rate disputes the question is one of reasonableness of the loss claimed, with the onus on the defendant to show a reasonably available alternative (Arsalan v Rixon; Nguyen v Cassim; McKnight v Miller).
    Reasonable Cost
    The amount a court considers appropriate for the hire of a replacement vehicle. What constitutes "reasonable" varies by jurisdiction. NSW and SA favour the lowest market rate. WA (post-Miller v McKnight) compares against mainstream market rates. Victoria and Queensland show less consistency.
    Replacement Vehicle
    A vehicle provided to the not-at-fault party while their damaged vehicle is being repaired or a settlement is reached. Per Arsalan v Rixon [2021] HCA 40, the replacement should be broadly equivalent to the damaged vehicle.

    S

    Special Leave
    Permission to appeal to the High Court of Australia. Following Miller v McKnight [No 2] [2025] WASCA 61, there is the possibility that a special leave application may be filed, which would give the High Court the opportunity to provide further guidance on credit hire damages assessment.

    T

    Third Party
    In credit hire context, the not-at-fault driver or vehicle owner. The term distinguishes them from the insurer (first party) and the insured at-fault driver (second party).
    Total Loss
    Where the cost of repairing the damaged vehicle exceeds its market value. In total loss situations, the hire period typically runs until the claimant receives settlement and has a reasonable opportunity to source a replacement vehicle.

    V

    Vehicle Selection
    The process of choosing an appropriate replacement vehicle. Post-Arsalan, the vehicle should be broadly equivalent to the damaged vehicle in terms of class, features, and amenity. Factors to consider include make, model, age, mileage, and market value of the damaged vehicle.