Fleet News

Insight: Damage recharge policies

They are a fact of everyday motoring life. From car park prangs to roundabout bumps and major collisions – around 10,000 accidents take place, on average, every day.

And costly insurance claims or sizeable repair bills are an inevitable by-product.

Fleets employ a variety of methods to encourage drivers to take more care when travelling. And a growing trend is to charge some or all of the cost of the incident to drivers.

Methods vary, but commonly include a three-strike rule after which the full cost of repair is charged back to the driver, charging back the cost of the excess from the first incident and a hybrid system in which the penalty rises the more indicents a member of staff has.

Others only charge for multiple incidents on a 12-month period, while some aggregate accidents over a longer timeframe.

But which policy best suits your business?

The answer to this will vary according to the size and nature of an organisation’s fleet and its uses, the company’s ethos when it comes to its employees and personal preference on the part of those in charge.

HR-led fleets, for instance, are more likely to take a softly-softly approach, viewing  damage recharge costs to be nothing more than ‘payment penalties’ to be avoided at all costs if the best possible relationships with employees are to be maintained.

However, finance-led operations will often go in harder and faster with their recharges.

They believe that passing the partial or complete costs of any excess payment to the employee motivates staff to drive more carefully.

And if it doesn’t, at least some of the cost has been mitigated.

For much the same reason, it’s not uncommon for some businesses to have a set charge unrelated to the insurance excess which employees with company vehicles pay if they have an accident.

Tracey Scarr, fleet and road safety manager at Arval, summed up the dilemma: “A company car is a valuable asset and drivers must take a level of accountability for their actions.

"Not passing any cost on would potentially send out the wrong message and promote a flippant attitude to driving.

“But the danger with taking a very harsh approach is that you can drive damage underground, where drivers either don’t admit to causing damage or lie about it because of the consequences.

“This makes it very difficult to take corrective action and understand where the real fleet issues lie.”

In short, there isn’t a one-size-fits-all approach when it comes to damage recharge policies.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Comment as guest


Login  /  Register

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee