What Is the Basic Hire Rate (BHR)? A UK Credit Hire Guide
The Basic Hire Rate is what it would have cost the claimant to hire an equivalent vehicle on the open market, without the credit and additional services bundled into a credit hire agreement. It is one of the most contested concepts in credit hire litigation: insurers use it to drive down recoverable charges, but BHR evidence is only as strong as the data behind it.
This guide explains what BHR is, when it applies, and how to challenge flawed rate evidence.
The Basic Hire Rate is the standard daily rate that a member of the public could obtain from a mainstream car rental company for a comparable vehicle. Insurers use BHR evidence - typically compiled by an engineer or rates surveyor - to argue that credit hire charges exceed what was reasonably necessary.
Insurers use BHR reports to reduce the amount they pay for credit hire. Their argument is that the claimant could have hired a vehicle at a lower "spot" rate rather than the higher credit hire rate. This approach was validated (with important caveats) by the Court of Appeal in Copley v Lawn [2009] EWCA Civ 580.
No. The BHR is only relevant if the claimant could have afforded to hire a vehicle from their own resources. If the claimant is impecunious - meaning they could not reasonably have paid for hire upfront - the credit hire rate is the appropriate measure. This principle was established in Lagden v O'Connor [2003] UKHL 64.
Credit hire rates are higher than BHR because they include additional benefits: no upfront payment, no credit card required, no excess liability, vehicle delivery and collection, and the CHO assumes the credit risk. A BHR quote from a mainstream rental company would not include these features.
Common challenges include: the surveyed rates are not for genuinely comparable vehicles; the rates do not reflect what was actually available at the time of hire; the report uses online "best price" quotes that require a credit card and pre-payment; or the report fails to account for delivery, collection, and insurance excess.
Rate evidence is the data an insurer provides (usually via an engineer's report) to support a BHR figure. For it to be reliable, it should reflect real-time availability, like-for-like vehicles, and genuinely comparable terms. Stale or cherry-picked rate evidence can be challenged effectively.
If a claimant is impecunious, the BHR benchmark does not apply. The claimant is entitled to recover at the credit hire rate because they had no realistic alternative. Impecuniosity is assessed on the claimant's overall financial position - not just their bank balance on a single day.
CreditHire Assist includes a BHR deconstruction tool that analyses insurer rate evidence, identifies weaknesses, and helps handlers draft targeted rebuttals grounded in verified case law. It flags common errors such as mismatched vehicle categories and stale pricing data.
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