Report it to the hire company straight away, photograph everything, and do not try to arrange a repair yourself. Your liability is generally capped at the damage excess stated in your agreement, which is the maximum you pay towards the repair regardless of what the repair actually costs. And there are things a hire company cannot charge you for at all, including damage that was already on the vehicle when you collected it.
Most people find this process more stressful than it needs to be, largely because they do not know where they stand. This guide explains how the excess works, what the Australian Consumer Law says about your rights when you hire a vehicle, and the two minutes of work at collection that prevent most disputes entirely.
What is a damage excess?
The damage excess is the maximum amount you may be liable to pay towards repairing damage to the vehicle. If the excess is set at a given figure and the repair costs several times that, you pay the excess, not the repair bill.
Three things to understand about it:
- It applies per incident, not per hire. Two separate incidents during one hire can mean the excess applies twice.
- It is usually payable regardless of fault, at least initially. Where another driver is at fault and identifiable, it may be recovered later, but the hire company will generally look to you first because you are the party to the agreement.
- It is not insurance. It is a limit on your liability under a contract. Whether anything is actually charged depends on what happened and what the agreement says.
The excess is also separate from the security hold placed on your card at collection. The hold is an amount reserved as security. The excess is the cap on liability. They are frequently confused and they do different jobs.
What to do immediately
- Check everyone is safe. If anyone is hurt, call 000. Nothing else on this list matters until that is dealt with.
- Move the vehicle out of danger if it is safe to do so, and if it is not, leave it and get yourself clear of traffic.
- Photograph everything. The damage close up, the whole vehicle, the position of the vehicles, the road, the signage, the weather and the surroundings. More is better. You cannot go back later.
- Exchange details with any other party. Name, address, phone number, licence number, registration and insurer.
- Note witnesses. A name and phone number is enough.
- Report to police where required, including where anyone is injured, where a vehicle needs towing, or where the other party refuses to exchange details.
- Ring the hire company as soon as practicable. Do not wait until you return the vehicle. They will tell you what they need and whether the vehicle can continue to be driven.
- Do not arrange your own repair. This is the single most common expensive mistake.
Why you must not arrange a private repair. It is not your vehicle. An unauthorised repair, even a good one, can breach the hire agreement, and you will generally still be liable while having paid a repairer as well. Report it and let the hire company manage the repair through its own channels.
What a hire company cannot charge you for
This is where knowing your position matters, and where the Australian Consumer Law, which sits in Schedule 2 of the Competition and Consumer Act 2010, does real work.
Pre-existing damage
The ACCC’s industry guidance for rental cars is explicit: a hire company cannot hold a consumer responsible for pre-existing damage to a vehicle. Further, a company cannot ask you to acknowledge the vehicle is in an undamaged state unless it has given you a pre-existing condition report, sometimes called a vehicle damage report, and given you an opportunity to inspect the vehicle.
Your entitlements at collection are to inspect the vehicle thoroughly against that report, to note any additional damage on it, and to discuss that with the company before you leave.
Mechanical condition and roadworthiness
A condition report should cover panel damage and other visible, external damage only. A hire company cannot require you to attest to the mechanical condition, safety or roadworthiness of a vehicle, because you are not in a position to assess those things. The company is responsible for the vehicle’s maintenance and general upkeep before it is hired, including ensuring it is roadworthy.
Things unconnected to your hire
The ACCC guidance also makes clear that a hire company is not entitled to recover from a consumer for problems unrelated to that consumer’s conduct, or for losses caused by something independent of the hire after the vehicle left the company’s control in circumstances not attributable to the hirer.
Terms that are unfair
Standard form car rental contracts are subject to the unfair contract terms provisions of the Australian Consumer Law. These protect consumers against terms that cause a significant imbalance in rights and obligations, are not reasonably necessary to protect the business, and would cause detriment. A term in a standard form contract is not automatically enforceable simply because it is printed in the agreement.
Consumer guarantees apply when you hire
According to the ACCC, most consumer guarantees apply when you hire a car, except those relating to ownership. The relevant one here is the guarantee of acceptable quality: the vehicle must be fit for purpose, safe, durable, free from defects and acceptable in appearance and finish.
In practice this means that if the vehicle develops a fault that is not your doing, that is the hire company’s problem rather than yours. Where the failure is major, for example a fault that cannot be repaired for several days, you may be entitled to a replacement vehicle or a refund. Where it is minor, the company may choose how to remedy it.
Worth knowing for business hirers too. For goods and services supplied from 1 July 2021, the consumer threshold is $100,000, which means a business hiring a vehicle below that value is protected in the same way an individual is.
Reducing the excess
There are generally three routes, and they are not mutually exclusive.
The hire company’s own reduction option
Most companies offer an option to reduce the excess for an additional daily amount. The reduced figure and the daily cost vary, and the reduction is rarely to zero. Ask what the reduced excess actually is rather than assuming the option removes liability entirely.
Travel insurance
Many travel insurance policies include hire car excess cover. The ACCC notes that the usual mechanism is that you pay the excess to the hire company and then claim reimbursement from the insurer. That is an important practical detail: you still need the funds available at the time.
Credit cards and motoring associations
Some credit cards include hire car excess cover as a benefit, often conditional on paying for the hire with that card. Motoring association membership sometimes includes it as well. Both are worth checking before paying for a separate product you may already hold.
Whichever route you take, read what is excluded. Cover that does not apply to the thing that actually happened is not cover.
What is commonly excluded from cover
The ACCC notes that a hire contract will usually state that you are not covered for certain types of damage, or that you must pay extra to be covered. These exclusions vary between companies, but the categories that recur across the industry are worth knowing about because they are the ones that turn a capped liability into an uncapped one.
- Driving while unlicensed, or by a person not nominated on the agreement. The most common and the most expensive.
- Driving under the influence of alcohol or drugs.
- Unsealed roads, where the agreement restricts them.
- Water damage, including driving through flooded roads or beach driving.
- Roof, underbody and windscreen damage, which are sometimes treated separately from general damage.
- Tyres and glass, which in some agreements sit outside the standard arrangement.
- Wrong fuel, which is not damage in the usual sense and is commonly excluded.
- Use outside the agreed purpose or area.
Read this section of your agreement before you drive off rather than after something happens. It takes a few minutes and it is the part of the document that actually affects you.
The two minutes that prevent most disputes
Almost every disagreement about hire car damage traces back to a missing record at collection. This is the fix.
At collection
- Ask for the condition report and go through it against the vehicle. You are entitled to inspect and to note anything missing from it.
- Photograph all four corners, both sides, the roof line, the wheels and the windscreen. Get close on any existing mark.
- Photograph the interior, including the seats and the boot.
- Photograph the fuel gauge and the odometer.
- Make sure any damage you find is written on the report before you sign, not described verbally to someone who will not be there when you return.
- Check the photographs have a timestamp and keep them until well after the hire ends.
At return
- Repeat the whole sequence. Same angles, same close ups, the gauge and the odometer.
- Return in daylight if you can. Damage disputes are far more common on after hours returns because nobody inspects the vehicle with you.
- Get the return acknowledged if someone is present.
- Keep everything until the security hold has been released and any infringement period has passed.
What usually damages a hire car in Perth
Most hire car damage is not a collision. It is small, avoidable and concentrated in a handful of situations, which makes it worth knowing where the risk actually sits.
Carparks
By a wide margin the most common source. Kerb rash on alloy wheels, door dings, and low bollards and concrete pillars that sit below the rear window line. Multi storey carparks in the Perth CBD and the older inner suburbs are tight, and a vehicle larger than the one you normally drive changes your sense of where the corners are. Reverse into bays where you can and use the cameras, but check over your shoulder as well.
Unfamiliar vehicle dimensions
Almost every hire is a car you have not driven before. Height is the one that causes the most expensive surprises, because roof damage is sometimes treated separately from general damage. Car park height bars, drive throughs and hotel entrances are where it happens, and a people mover or a ute with a roof rack is taller than the sedan you had in mind when you booked.
Gravel and unsealed roads
Stone chips to the windscreen and paint, and underbody damage. This matters twice over, because unsealed road use is one of the most commonly excluded categories in a hire agreement. If a road on your route turns to gravel, the question is not only whether the vehicle can handle it but whether your cover still applies.
Wildlife at dawn and dusk
Outside the metropolitan area this is a genuine risk rather than a theoretical one, particularly in the first and last hour of daylight. Kangaroos move unpredictably and swerving causes worse outcomes than braking. If you are driving regionally, plan to be off the road around dusk where you can.
Wrong fuel
More common than people admit, especially with a vehicle that takes premium unleaded or diesel when you habitually use standard unleaded. It is usually excluded from damage cover because it is not damage in the ordinary sense. Check the fuel type at collection and again at the first fill.
Common questions
No. Your liability is determined by the agreement and what happened, not by whether you were forthcoming. Failing to report, by contrast, can breach the agreement and make your position considerably worse.
Contact the hire company immediately, with photographs and the time. The sooner it is raised, the easier it is to establish that it was not yours.
Give the hire company the other party’s details. You will typically still be looked to initially because you are the party to the agreement, with recovery pursued afterwards. Getting complete details at the scene is what makes that recovery possible.
Both are damage. The practical difference is the repair cost, and where that cost is below the excess, you generally pay the repair cost rather than the full excess. Ask for the assessment in writing.
Yes. Ask for written details of the damage claimed and the cost. If you believe you are being charged for pre-existing damage or under an unfair contract term, raise it with the company first. Consumer Protection Western Australia handles consumer complaints in this state, and the ACCC publishes guidance on rights when hiring a vehicle, although it does not resolve individual disputes.
The short version
Photograph the vehicle at both ends of the hire. Read the exclusions before you drive off. If something happens, report it promptly and do not arrange your own repair. And know that pre-existing damage is not yours to pay for, and that consumer guarantees apply to a hire vehicle just as they do to most other services.
Burswood Car Rentals operates from 16 Teddington Road, Burswood. If you want the excess, the reduction options and the exclusions explained before you book, call (08) 9362 4777, email rentals@burswoodcarrentals.com.au or send a message on WhatsApp to 0438 757 909. The Instant Quote on the site will show availability and a rate for your dates.










