Quick answer
Since 29 August 2023, every London borough has been inside the expanded Ultra Low Emission Zone. That single change reshapes the like-for-like analysis for credit hire and courtesy vehicles across the capital. A non-fault driver who is placed into a non-compliant replacement vehicle in any London borough is being made to pay daily ULEZ charges they would not have paid if their own vehicle had not been damaged by the at-fault driver. That is a like-for-like failure and it is grounds to challenge the at-fault insurer's offer.
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ULEZ, Congestion Charge and your replacement vehicle: the like-for-like rules in London
Since 29 August 2023, every London borough has been inside the expanded Ultra Low Emission Zone. That single change reshapes the like-for-like analysis for credit hire and courtesy vehicles across the capital. A non-fault driver who is placed into a non-compliant replacement vehicle in any London borough is being made to pay daily ULEZ charges they would not have paid if their own vehicle had not been damaged by the at-fault driver. That is a like-for-like failure and it is grounds to challenge the at-fault insurer's offer.
The geography in 2026
The ULEZ now covers all of Greater London - the area inside the M25 plus a small strip beyond it, encompassing all 32 London boroughs and the City of London. Compliance is judged by emissions standard: petrol vehicles must meet Euro 4 (most petrol vehicles registered after January 2006), diesel vehicles must meet Euro 6 (most diesel vehicles registered after September 2015). Non-compliant vehicles pay £12.50 per day to drive within the zone.
The Central London Congestion Charge zone is a smaller area within the centre - broadly the City of London, most of Westminster, the southern parts of Camden, Islington, Lambeth, Southwark and Tower Hamlets, and parts of Kensington and Chelsea. The Congestion Charge is £15 per day for any vehicle entering the zone Monday to Friday 07:00 to 18:00, Saturday and Sunday 12:00 to 18:00 (excluding Christmas Day and the early-morning hours).
DETAIL
Section 3 of the walkthrough.
Why a courtesy car can fail the like-for-like test
Like-for-like in the credit hire context means a replacement reasonably equivalent to the damaged vehicle in size, type, age, specification and use case. In London since the ULEZ expansion, that implicitly includes ULEZ compliance. A non-fault driver whose own vehicle was ULEZ-compliant cannot be placed into a non-compliant replacement without absorbing daily £12.50 charges as a direct consequence of the at-fault driver's negligence.
The same argument runs for the Congestion Charge where the driver's normal route crosses the central zone. A driver who was making a regular Monday-to-Friday commute through the Congestion Charge zone cannot be placed into a replacement that, were they to take the same route, would attract a £15 daily charge that their own vehicle did not. The cost of the charge is a recoverable head of loss, but the cleaner remedy is a compliant replacement vehicle.
What about a driver whose own vehicle was non-compliant?
If the damaged vehicle was already non-compliant - for example an older petrol that did not meet Euro 4, or an older diesel that did not meet Euro 6 - the driver was already paying £12.50 per day to use it in the zone. Placing them into a non-compliant replacement means they continue to pay; placing them into a compliant replacement is an upgrade to which they are not strictly entitled.
The pragmatic norm here is that the replacement is compliant (it is harder for hire fleets to source non-compliant stock), and the daily charge that the original driver would have paid is treated as a saving offsetting the rate. The point to watch is that the replacement specification matches the use case; a tradesman whose non-compliant van had specific load capacity is still entitled to a like-for-like load capacity in the replacement, compliance or no compliance.
The same logic applies to the Congestion Charge
Congestion Charge applicability is route-dependent. A driver whose normal use of the vehicle did not cross the central zone is not entitled to insist on a replacement appropriate to the central zone. A driver whose normal route did cross - for example a private hire driver with a regular West End fare base, a tradesman with regular Holborn or Aldgate jobs - is entitled to the same effective access in the replacement.
In practice, modern hire-fleet vehicles handle Congestion Charge through Auto Pay accounts where the operator pays daily and bills it back. The replacement contract should be transparent about Congestion Charge handling: who pays the daily fee, how it is recovered, what happens with penalty notices for non-payment. The non-fault driver should not absorb a charge that is directly traceable to the at-fault driver's collision.
What about other zones - Birmingham, Bath, Bristol, Sheffield, Newcastle, Tyneside, Glasgow
Several other UK cities operate Clean Air Zones (CAZ) or Low Emission Zones (LEZ) with similar daily-charge regimes for non-compliant vehicles. Birmingham CAZ, Bath CAZ, Bristol CAZ, Sheffield CAZ, Newcastle / Tyneside CAZ, Bradford CAZ, Portsmouth CAZ and the four Scottish LEZs (Glasgow, Edinburgh, Aberdeen, Dundee) are all in operation in different forms. The like-for-like analysis runs the same way: a replacement that triggers a daily charge in the relevant zone, where the driver's own vehicle would not have, is a like-for-like failure.
Each scheme has different rules on which vehicle classes are subject (Birmingham CAZ Class D includes private cars; Bath CAZ does not; Glasgow LEZ does), so the analysis depends on which city the driver normally operates in. The accident management partner should match the replacement specification to the city.
How to challenge a non-compliant offer
When the at-fault insurer offers a courtesy car or replacement that is non-compliant, the response is straightforward: write the position out clearly, citing the date the ULEZ expansion took effect (29 August 2023), the daily charge (£12.50), the projected duration of the hire and the resulting cumulative charge, and ask for a compliant alternative. Most insurers reposition once challenged in writing.
Where the insurer refuses, the daily charges become a recoverable head of loss in the schedule. They are foreseeable, they are direct, they would not have arisen but for the at-fault driver's negligence. The cleaner route is the compliant replacement; the fallback is the recoverable charge.
Documentation for the file
Keep the V5C (or V5C/2 new keeper supplement) showing the registered keeper and date of first registration. Keep the MOT history (gov.uk MOT history check) showing the emissions standard. Keep any prior ULEZ payment record showing whether the vehicle was paying the daily charge. These document the vehicle's compliance position and the driver's pre-accident exposure to ULEZ charges.
For the replacement, keep the hire agreement showing the replacement vehicle's compliance status, the daily rate, and the duration. Keep any correspondence with the at-fault insurer about the like-for-like specification. The schedule of recoverable charges is then defensible against challenge.
Take action
If you have just been in a non-fault collision, the fastest way to protect your claim is to open the file with us inside the first hour. We dispatch recovery, lodge the relevant CCTV requests inside the retention window, and notify the third-party insurer for you.
