Contract hire with full maintenance

Pros

• Peace of mind – all costs are known
• Less fleet administration required
• Enjoy leasing company’s negotiating power

Cons

• You pay for SMR irrespective of usage
• No control over where vehicles are repaired
• True costs can be hidden within lease rate

CASE STUDY: Peter Bonney,  fleet manager, Salvation Army

Contract hire with full maintenance remains the most popular option in the fleet market.

It ensures that vehicles are consistently maintained to the highest standards at appropriate intervals – and the responsibility for this rests with the leasing company.

This option is often used by large fleets, those which are spread nationwide or new businesses with little or no experience of fleet management.

It also has the added bonus of enabling fleet managers to place a tick in the “duty of care” box without losing sleep...

With church ministers working from Shetland to St Ives, the Salvation Army required a service, maintenance and repair contract which took into account its geographical spread.

It was for this reason that fleet manager Peter Bonney chose contract hire with full maintenance.

Today, the Salvation Army has a fleet of 730 non-premium brand cars which are supplied on three-year leases by either Venson Automotive or ALD.

“It couldn’t be more straightforward for us –the leasing company simply arranges with the car’s user when and where it’s collected from and delivered back to,” says Bonney.

“That car is then taken to the garage to be maintained at an appropriate point in time.

“Indeed, ALD installs a device in the vehicle that alerts the company automatically when that car needs servicing.

“And when a leasing company takes care of all aspects of a vehicle’s care by ensuring that it has a full service history, it does tend to result in it being given a more optimistic residual value when the contract finishes.”

Bonney adds that the “own workshop” and “pay-as-you-go” options simply would not be practical considering the Salvation Army’s nationwide operations and the different makes of car it leases.

Until 2004, it owned its fleet and arranged its own service and maintenance needs.

The church – which is also a registered charity – adopted its current approach after looking at ways of reducing both the retention period and each vehicle’s depreciation.

Nonetheless, it adopts a different approach for its fleet of 230 light commercial vehicles which include everything from mini-buses to mobile canteens and vans to ambulances.

Bonney says: “There’s even a double-decker bus which has been converted into a facility for those requiring pastoral care.

“Obviously, a one-size-fits-all approach would simply not be appropriate for these vehicles and it’s most appropriate for us to arrange our own servicing and maintenance for them.”

He believes that an added bonus of contract hire with full maintenance is that duty of care requirements are met by the leasing company.

Bonney concludes: “This is something that we place great importance on at the Salvation Army – and I know that the two leasing companies we work with do too.

“Contract hire with full maintenance is a straight-forward way to ensure that duty of care is observed with each vehicle – and that gives both me and the car’s user peace of mind.”

is it right for you?

Best for large car fleets that do not want the administration involved in sorting out service and maintenance. Least work required and arguably the greatest peace of mind.