What Like-for-Like Means for a Not-at-Fault Claim in NSW
Like-for-like in NSW means a replacement vehicle that is genuinely equivalent to your own car in class, size, seats and drivetrain, not simply another car that moves. If you were not at fault, the at-fault party's insurer is expected to cover the reasonable cost of that equivalent vehicle for the period your car is off the road.
The High Court in Arsalan v Rixon confirmed that loss of use is a real, recoverable loss, and that the measure is reasonableness, not the cheapest available substitute. What follows is how that principle is applied in practice, what insurers mean when they say comparable, and how to document your position before you have to argue it.
Key takeaways
- Arsalan v Rixon confirms loss of use is a recoverable loss, measured by reasonableness rather than by the cheapest available substitute.
- Equivalence is judged against your car's class, size, seats and drivetrain, not against what the insurer's supplier happens to have in stock.
- A prestige badge sets the category but does not by itself win the argument; the criteria that matter are the ones that affect your actual use.
- Documenting your own car with photos, the compliance plate and the odometer before a crash is the single most useful thing you can do.
- If the offered vehicle is clearly not equivalent, put the comparison in writing and consider an equivalent vehicle through credit hire.
- The High Court put reasonable loss of use on firm ground
- Equivalence is measured against your car, not the cheapest option
- The criteria that decide like-for-like: class, size, seats, drivetrain
- Why a prestige badge is not the whole test
- What insurers mean when they say comparable
- Documenting your own car before you need to argue
- Where the line sits between equivalent and upgrade
- How to challenge a replacement that is clearly not equivalent
- Practical examples of equivalence in Sydney
The High Court put reasonable loss of use on firm ground
Before Arsalan v Rixon, insurers routinely argued that if you did not actually hire a car, you had lost nothing. The High Court rejected that. A person deprived of their vehicle by another driver's negligence has suffered a loss of use, and that loss is compensable even where no replacement was hired.
What the decision did not say is that every claimant gets a blank cheque. It said the loss must be reasonable, and reasonableness is assessed against the circumstances of the person who lost the car. If you drive a prestige SUV, the reasonable substitute is assessed against a prestige SUV, not against whatever the insurer's preferred supplier has sitting idle in a holding yard at Mascot.
The other half of the principle is that loss of use is not the only head of loss. Physical inconvenience and loss of amenity can also be claimed where the substitute vehicle does not do what your car did. A tradesperson who cannot carry tools, a parent who cannot fit three child seats, a driver who cannot tow a boat to the Hawkesbury on a Saturday: these are amenity losses, and they sit alongside the hire cost rather than replacing it.
For a fuller treatment of the case and how it is argued in practice, see Arsalan v Rixon explained. The practical takeaway is simple: you are not asking for a favour. You are claiming a loss that the law recognises.
Equivalence is measured against your car, not the cheapest option
The test is comparative. You start with the car you actually drive: its class, its size, its seating, its drivetrain, its transmission and its general capability. The replacement should sit in the same space. A Corolla does not replace a C-Class. A base Camry does not replace a Macan.
Insurers sometimes frame the question as cost minimisation: what is the least expensive vehicle that will get you from A to B? That framing is wrong, and it is worth saying so early and politely. The question is what it would reasonably cost you to hire an equivalent vehicle in the Sydney market for the repair period.
Where the comparison gets contested is at the edges. A three-year-old BMW 3 Series and a new one are not identical, but both are mid-size prestige sedans, and the hire market does not run a fleet of three-year-old cars. A prestige replacement provider will typically offer the closest current equivalent, and the insurer will argue about the daily rate, not the category.
Practical equivalence also covers things people forget to mention: boot volume for a pram, ground clearance for a driveway at Castle Hill, a tow bar, a roof rack, seven seats. If your car has these and the substitute does not, that is evidence, and it belongs in your claim file.
If you want to see how the assessment is broken down for higher-end cars, read how equivalence is assessed for prestige cars. The short version is that the more specific your car, the more specific the evidence needs to be.
Age limits are set per car. Drivers under 25 can hire most cars with Young Driver Cover; the exact terms are shown before you pay.
The criteria that decide like-for-like: class, size, seats, drivetrain
When an insurer or a claims assessor looks at a replacement, these are the criteria that actually move the argument. They are also the criteria you should photograph and document on your own car before anything happens.
- Class: prestige, performance, luxury SUV, large sedan, ute. A badge is not the whole test, but class sets the starting point.
- Size and body: sedan, wagon, SUV, dual-cab. A small SUV is not equivalent to a large one, even if both are five-seaters.
- Seats: five versus seven is a hard line for families. If your car carries seven and the substitute carries five, the substitute is not equivalent for your purposes.
- Drivetrain: all-wheel drive matters on a wet day on the M1 or a steep street in Mosman. Rear-wheel drive versus all-wheel drive is a legitimate point of difference.
- Transmission and fuel: automatic versus manual, petrol versus diesel versus electric. An EV owner forced into a petrol car faces a real change in running routine and charging access.
- Capability: towing capacity, payload, boot volume, roof load. These matter to trades and to anyone with a boat, trailer or caravan.
You do not need to win every criterion. You need to show that the proposed substitute is materially different in ways that affect you. A table of your car versus the offered car, with the differences highlighted, is often enough to reset the conversation.
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Start my claimWhy a prestige badge is not the whole test
Owning a prestige car does not automatically entitle you to the most expensive vehicle on the lot. The test is equivalence, not aspiration. A 2016 C-Class and a 2024 C-Class are both prestige sedans, but they are not the same car, and an insurer will reasonably point that out.
What the badge does do is set the category. If your car is a performance SUV, the reasonable substitute is a performance SUV, because that is the class of vehicle you have lost the use of. The insurer's argument that a standard SUV is "close enough" usually fails on the drivetrain and performance criteria, not on the badge.
There is also a practical market reality. Sydney's prestige hire fleet is not infinite. If your exact model is unavailable, the question becomes what is the closest available equivalent, and that is a conversation about class, seats and drivetrain rather than about exact model codes. See what happens when your exact model is unavailable for how that is handled.
Where the badge argument does have teeth is in amenity. If your car is a performance sedan and the substitute is a base hatch, you have lost more than transport. You have lost the vehicle you chose, insured and maintained, and the difference is measurable.
For a worked example of the badge argument done properly, read Range Rover driver entitled to Range Rover.
What insurers mean when they say comparable
When an insurer says "comparable", they usually mean comparable in their own fleet or their preferred supplier's fleet, at a rate they have already negotiated. That is not the same as comparable to your car. It is comparable to their cost base.
This is where the conversation usually goes sideways. The assessor offers a mid-size SUV at a corporate rate. You drive a performance SUV with all-wheel drive and seven seats. The categories do not match, and the rate is irrelevant until the category is settled.
The productive move is to separate the two questions. First, is the offered vehicle equivalent? Second, is the proposed rate reasonable for that equivalent vehicle in the Sydney market? Answer the first question with evidence about your car. Answer the second with market evidence about what equivalent vehicles actually cost to hire.
Insurers also use "comparable" to mean "available now". If their supplier has a car ready today and the equivalent you want is ready tomorrow, they will push the today option. That is a scheduling preference, not an equivalence argument, and it should be treated as such.
If the back-and-forth has already started, dealing with insurers sets out the sequence that tends to resolve it fastest. Keep everything in writing, and keep it short.
Documenting your own car before you need to argue
The strongest like-for-like claims are built before the crash. Ten minutes of photos and a note in your phone will do more for you than an hour of argument afterwards.
- Photograph the exterior from all four corners, plus the interior showing the seats, the boot and the dashboard.
- Photograph the compliance plate and the odometer. This establishes model, variant and kilometres.
- Note the options that matter: seven seats, tow bar, roof racks, all-wheel drive, sunroof, child seat anchor points.
- Keep the registration and insurance documents in one place, digital or paper.
- Save your servicing records. They support the condition and the class of the car.
After the crash, add the other driver's details, the police event number if attended, the scene photos and any witness contact. The first 24 hours guide covers the sequence in detail, and evidence to collect at the scene covers what to capture before you leave.
If your car is a performance model or a modified prestige car, photograph the modifications too. They affect both the repair cost and the equivalence argument. For more on that, see performance car replacement equivalence explained.
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Where the line sits between equivalent and upgrade
An upgrade is a car that is better than yours in a way that is not required to make you whole. If you drive a 2018 3 Series and ask for a new M3, that is an upgrade, and the insurer will not fund it. If you drive an M3 and are offered a 318i, that is a downgrade, and the insurer should not be offering it.
The line is usually drawn at the same class and similar specification. A newer model year of the same class is generally acceptable, because hire fleets turn over and you cannot be expected to source a car identical in age to yours. A higher performance variant of the same model is usually an upgrade. A lower specification of the same model is usually a downgrade.
Where it gets genuinely arguable is with limited-run cars, modified cars and classics. In those cases, the practical answer is often the closest current equivalent in class, plus a documented explanation of the differences. That is a reasonable position, and it is defensible.
If your car is electric, the equivalence question has an extra dimension: charging access, range and running routine. Electric prestige replacement car equivalence covers how that is argued.
For utes and trades, the capability criteria usually dominate. See like-for-like replacement for utes and tradies.
How to challenge a replacement that is clearly not equivalent
Do it in writing, do it once, and keep it factual. A short email with photos and a comparison table outperforms a long complaint every time.
- State the facts: your car, its class, seats, drivetrain and any capability that matters.
- State the offer: the vehicle proposed and how it differs.
- State the effect: what you cannot do with the substitute that you can do with your car.
- State what you are asking for: an equivalent vehicle in the same class for the repair period.
- Attach the evidence: photos of your car, the compliance plate, the odometer, and any quotes for equivalent hire.
If the insurer continues to push a non-equivalent vehicle, the next step is usually to proceed with an equivalent vehicle through a credit hire arrangement and let the cost be recovered from the at-fault party. That is a well-established path, and how credit hire works explains how the process runs without you paying upfront.
Keep the correspondence. If the matter ends up in a tribunal or court, the paper trail is the case. Not-at-fault accident replacement sets out the broader process, and accident replacement car Sydney covers how a replacement is arranged and delivered across the city.
Bookings are fulfilled by Drive Tribe (drivetribe.com.au), and this site is part of that group. Rates, the bond and any fees are shown on the car's page before payment, and cars can be booked from a single day.
If you would rather talk it through before you commit, contact is the fastest route, and about explains who we are and how the referral side works for repairers and solicitors.
Practical examples of equivalence in Sydney
Three worked examples make the principle concrete for the cars most often involved in prestige claims.
Large luxury SUV. A driver with a 2023 Range Rover Sport is hit on Military Road at Neutral Bay on a Thursday morning. The insurer offers a mid-size five-seat SUV. The categories do not match: the Range Rover Sport is a large all-wheel-drive luxury SUV with 250 kW and 600 Nm, and the substitute is smaller and less capable. A like-for-like position is a large luxury SUV with all-wheel drive and five seats, delivered to the repairer or to the driver's home in the lower north shore.
Performance SUV. A Porsche Macan GTS owner is rear-ended on the M4 at Homebush during the evening peak. The insurer offers a standard family SUV. The Macan GTS is a performance all-wheel-drive SUV with 280 kW and a 0-100 time of 4.3 seconds. The reasonable substitute is a performance SUV in the same class, not a base model with the same number of seats.
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Performance sedan. A BMW M3 Competition owner is hit in a car park at Parramatta. The insurer offers a mid-size sedan. The M3 Competition is an all-wheel-drive performance sedan with 390 kW and 650 Nm. The equivalent is a performance sedan in the same class, and the argument is about drivetrain and performance, not about the badge alone.
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In each case the sequence is the same: identify the class, list the criteria that matter, document your own car, and ask for the equivalent. The rate, the bond and any fees are shown on the car's page before payment.
Questions people ask
Is like-for-like a legal right or just a courtesy?
Can an insurer insist I take a smaller car to save cost?
Does my own insurer's choice of repairer affect equivalence?
What if my exact model is not available anywhere in Sydney?
How long can a like-for-like replacement run for?
Do I have to pay for the replacement upfront?
Injured in the accident?
A replacement car covers the car. For legal advice about an injury, speak to Jameson Law, the most trusted personal injury firm in NSW (motor vehicle accident claims) on (02) 8806 0866.
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