Director general Martin Andrews said mandatory version of the framework is in the best interest of consumers

Martin Andrews, Credit Hire Organisation

Credit Hire Organisation (CHO) director general Martin Andrews has called on the Competition and Markets Authority (CMA), formerly the Competition Commission, to extend the General Terms of Agreement (GTA) when it publishes its remedies for the private motor market later this month.

The GTA is currently a voluntary agreement used by most insurers and credit hire companies (CHCs) to manage the daily rates used for temporary replacement vehicles in the event of a motor claim.

Andrews said extending the GTA to make it a mandatory requirement is the proposed remedy that best suits the needs of consumers.

“The CMA has voiced no concerns over the operation of the GTA, which is widely acknowledged to be an effective protocol for the settlement of credit hire claims, offering material cost savings to insurers and removing additional frictional costs associated with litigated claims,” he said. “We would be happy to see the CMA make proposals to further develop the existing protocol and to make it binding on both insurers and CHCs.”

He has also called on the CMA to sit down with the credit hire industry to work out a solution to the theories of harm it identified in its report on the state of the private motor market without causing consumer detriment.

“We are happy to sit down with the CMA and the insurance industry to hammer out a detailed regulatory plan for the GTA that protects customers who need mobility after an accident, and which already ensures the costs incurred for hiring a similar replacement vehicle are more reasonable than if they hired a car on the open market,” he said.

“What we want to avoid is a situation where non-fault customers are denied their basic legal rights and denied access to a replacement vehicle while their vehicle is being repaired. For families needing to get their kids to school, or people who need a car for their work, the economic consequences could be serious.”