Pay-as-you-go of inclusive maintenance contracts?

Whether to include maintenance in your contract hire agreement will largely depend on your attitude to risk.

Some companies like the certainty that contract hire with maintenance brings for budgeting purposes.

The downside is you may be paying a leasing company £60 a month, for example, but the vehicle doesn’t have any repairs in the first six months.

Most of the maintenance is likely to be in years three and four.

With a pay-as-you-go approach there is a cashflow benefit.

For those opting for contract hire without maintenance check what, if any, expectations are made of you with regards to servicing the vehicle.

Roadside assistance is usually included in a maintenance agreement. Find out if this extends to European travel assistance.

Consider situations where the driver may be at fault such as misfuelling.

What happens if a tyre needs replacing because of a puncture? Will you be charged for unused wear? Similarly, what if the tyre is damaged? Is there a limited number of tyres included in the budget?

Some providers have a ‘no quibble’ policy with an unlimited number of tyres, although it is likely to charge a slightly higher rental for this.

Peter Bonney, fleet controller of the Salvation Army, has a ‘no quibble’ tyre policy as it takes away the hassle of recharging drivers.

“The reason for having contract hire is to reduce the hassle from the operation,” he says.

“A puncture might be caused by a nail in the tyre. If the nail is in the middle of the tread the tyre can be repaired, but if it is near the sidewall it can’t, yet the driver was no more negligent.”

Lex Autolease suggests that maintenance agreements should include unlimited tyres, batteries and exhausts, all maintenance of fair wear and tear items and scheduled servicing.

Kirby adds: “It’s also worth noting that any damaged items not covered by maintenance agreement, such as door mirrors, should be recharged back at discounted rate via a preferred service network.”

Consider the size of the leasing company’s service network and whether you will be mandated to use particular service centres.

Bonney stipulates that the leasing company provides a full booking service.

“We don’t expect the driver to have to find a garage that has an account with the leasing company,” he says. “We want them to have one number to ring.”

Decide whether or not you want a replacement/relief vehicle included in the contract.

Downtime management is another factor. “The leasing company should work with you to reduce your downtime,” says Graham Short, fleet and property operations manager at Evander Glazing and Locks.

“That means making sure vehicles are booked in at a suitable time, servicing the vehicles out of hours or when the driver doesn’t need the vehicle and reducing the need to hire vehicles.”

Short also advises checking about maintenance issues that occur when the warranty has expired. He says: “If the vehicle is out of warranty by a few days will the leasing company speak to the manufacturer on your behalf and get goodwill on repairs to reduce repair costs?”

What if – questions to consider

• …you want to fit an accessory to the vehicle?
• …the manufacturer list price changes?
• …the VAT rate changes?
• …if the company can no longer pay the rentals?
• …if the leasing company ceases trading?
• …you want to extend the contract a few months?
• …you want to extend the contact for more than a few months?

Ask your provider what happens in these scenarios.