Crash frequency modelling analyzes the impact of factors like traffic volume, road geometry, and environmental conditions on crash occurrences. Inaccurate predictions can distort our understanding of these factors, leading to misguided policies and wasted resources, which jeopardize traffic safety. A key challenge in crash frequency modelling is the prevalence of excessive zero observations, caused by underreporting, the low probability of crashes, and high data collection costs. These zero observations often reduce model accuracy and introduce bias, complicating safety decision making. While existing approaches, such as statistical methods, data aggregation, and resampling, attempt to address this issue, they either rely on restrictive assumptions or result in significant information loss, distorting crash data. To overcome these limitations, we propose a hybrid VAE-Diffusion neural network, designed to reduce zero observations and handle the complexities of multi-type tabular crash data (count, ordinal, nominal, and real-valued variables). We assess the synthetic data quality generated by this model through metrics like similarity, accuracy, diversity, and structural consistency, and compare its predictive performance against traditional statistical models. Our findings demonstrate that the hybrid VAE-Diffusion model outperforms baseline models across all metrics, offering a more effective approach to augmenting crash data and improving the accuracy of crash frequency predictions. This study highlights the potential of synthetic data to enhance traffic safety by improving crash frequency modelling and informing better policy decisions.