Terms and conditions for a car hire business

Car hire terms are rarely read until a dispute arises, and then read closely. The terms have to deal with who may drive, what the excess is and when it is charged, how a scratch is proved, who pays a fine that arrives after the hire, and how a business account differs from a weekend rental. I draft those terms for a fixed fee of £995, delivered in five working days.

Who this is for

Independent car and van hire businesses in England and Wales, hiring to consumers over the counter and online and to businesses on account, with vehicles collected from your premises or delivered.

What matters in car hire terms

Driver eligibility and the insurance

The terms should state who may drive: named drivers only, with a valid licence, within your age and experience limits, with convictions and endorsements disclosed to the standard your insurer requires. A driver not named, or a use outside the policy such as driving abroad or towing, breaches the hire and can leave the vehicle uninsured contrary to section 143 of the Road Traffic Act 1988, and the terms should say that the customer bears the consequences. Identification and proof of address at hand-over should be stated as required.

Damage, the excess and how it is proved

The terms should set out the excess, that the deposit or pre-authorisation secures it, what falls outside the insurance and is charged in full (tyres, glass, roof and interior, for example), and how repair costs are assessed. Against consumers the Consumer Rights Act 2015 treats an excess that operates as a penalty as unfair, so the terms should tie charges to real cost, and a signed condition report with photographs at hand-over is what makes a damage charge hold.

Fuel, mileage, cleaning and late return

The terms should state the fuel policy and the refuelling charge, any mileage allowance and the excess mileage rate, cleaning charges for smoking, pets or excessive dirt, and the daily rate for late return, with a grace period if you allow one. They should say that the hire continues, at the customer's cost, until the vehicle is returned to you or collected.

Fines, tolls and charges after the hire

Parking fines, congestion and toll charges, speeding notices and clean air zone charges arrive weeks later addressed to you. The terms should make the customer liable for every charge arising from their use of the vehicle, allow you to transfer liability to the driver where the scheme permits, which section 66 of the Road Traffic Offenders Act 1988 allows for fixed penalties where the hire agreement contains the prescribed statement, or pay and recover the amount, and set a reasonable administration fee for doing so. The customer's card details may be held for that purpose if the terms say so.

Booking, cancellation and business accounts

Vehicle hire for specific dates is excluded from the fourteen-day cancellation right by regulation 28 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, so your own cancellation policy applies and must be fair. Under the Digital Markets, Competition and Consumers Act 2024 the headline price shown online must include all mandatory charges. Business customers on account should have invoicing terms, interest and compensation on late payment under the Late Payment of Commercial Debts (Interest) Act 1998, and a statement that the business is liable for its drivers' use.

What it costs

Customer or supplier terms and conditions, £995. One set of terms, customer-facing or supplier-facing, drafted for your business. Five working days.

Review of your existing terms, £495. You already have terms and want them checked and brought up to date. Returned marked up with my amendments and an explanation of the changes. Three working days.

Email me at geoffrey@caesar.co.uk with what you need and any documents, and I will confirm the scope and the fee in writing, usually the same working day.

What you get

• A full set of bespoke terms drafted for your business, reflecting the legal requirements that apply to your business and sector
• A note in plain English explaining the terms I have drafted for you
• Liability, payment, termination and IP provisions that protect your position and are drafted to withstand scrutiny from the other side
• Guidance on how to incorporate the terms properly
• Your questions and comments answered by email or phone
• One round of amendments to finalise the terms ready for use

What is not included

• Negotiating your terms with individual customers (I am happy to quote for this as an additional service if required)
• Sector-specific regulatory compliance beyond the contract terms themselves
• Website privacy notice and cookie compliance, which I quote separately
• Terms governed by the law of another country
• Tax advice

Questions I am often asked

A customer disputes a scratch we found on return. How do I make the charge stick?

With a condition report at hand-over that the customer signed or photographed, showing the panel was clean, and a return inspection done with the customer present where possible. The terms should require both and say that damage not recorded at hand-over is the customer's.

Can I charge an administration fee for dealing with a parking fine?

The terms can provide for a fee that reflects the work of dealing with the notice, in addition to the fine itself. Against consumers it should be a stated, reasonable amount rather than a percentage of the fine.

Does a business account customer need different terms?

The same document can include a business section: the account holder is liable for all hires by its staff, invoices are monthly, and late payment carries statutory interest and compensation. Consumer cancellation rights do not apply to business hires.

Related guidance and services

• Terms and conditions drafting, £995, the service this page describes
• Contract review, £495
• Terms and conditions for a campervan hire business

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.