Fleet News

What's the damage?

FLEET managers using contract hire are throwing away thousands of pounds by failing to make sure drivers look after their cars - and incurring hefty charges from suppliers to repair damage.

The extent of the abuse handed out to vehicles has been graphically illustrated by Lex Vehicle Leasing, with real life examples of returned cars.

Examples from their new guide to fair wear and tear, called 'What's the Damage?', include a car whose interior was 'torn to shreds' by a dog, or a dashboard ruined after being used as a holder for lighted cigarettes.

Drivers can feel they have less responsibility for their company cars because they will not have to pay for damage - but fleet managers must impose a sense of responsibility and ownership on them to tackle the problem, says Lex Vehicle Leasing.

Jon Walden, managing director of Lex Vehicle Leasing, said: 'Some drivers think the perk of having a company car is the freedom to trash it. Drivers may return cars and leave, thinking damage will be ignored if they do not point it out. But we have to sell the cars and major repairs will have to be paid for by the client.'

Figures from CAP Motor Research show the extent to which a car's residual value can be damaged if it is returned in poor condition. An average Ford Mondeo dives 25% in price if it is in poor condition, compared to its 'clean' equivalent.

The British Vehicle Rental and Leasing Association has produced a fair wear and tear guide for the contract hire industry, which sets out in detail the amount of damage a car can suffer without a charge being applied.

The Lex Vehicle Leasing guide goes one step further by including pictures of the level of acceptable damage in a bid to end disputes over what is considered 'fair'. Each week, about 1,000 end of lease vehicles are returned to Lex Vehicle Leasing and while most are acceptable, some are 'barely recognisable'.

Walden added: 'Suppliers of company cars cannot be expected to foot the bill for serious damage. Company directors and fleet managers need to pay close attention to this when appointing company car suppliers, as hidden costs can mean the supplier who initially appears to be the cheapest actually proves to be the most expensive over the full life of a

contract hire or lease agreement.'

'What's the Damage? can be downloaded from the LVL website. Click on the Buyers' guide menu button (left) and go to the Contract hire and leasing section.

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