VOLKSWAGEN is to expand its ground-breaking running cost guarantee scheme to contract hire firms after its success with outright purchase fleets. The manufacturer is investing tens of thousand of pounds in the scheme, launched at the end of last month, which promises to make its range as cheap to run as equivalent Fords or Vauxhalls.

Figures will be based on CAP Motor Research figures for servicing, maintenance and repair over three years/60,000 miles and Volkswagen has promised to refund any difference up front to its customers.

The scheme was launched at the end of last month, after a short delay while final legal checks were carried out. Sixty-four Volkswagen models are more expensive than their Vauxhall or Ford rivals, with Volkswagen cheaper in just 22 cases. Volkswagen estimates that average payments should be between £70 and £100 per vehicle.

Sam Roach, Volkswagen fleet marketing manager, said: 'We are trying to persuade fleets to examine total running costs. We have class-leading residual values, but for some reason fleets were picking marginally higher servicing and maintenance costs as a reason for not choosing our vehicles. We decided that if this minor point was a stumbling block, then we would remove it. This is much better than simply offering a £300 rebate on the front-end cost of the vehicle, because if a car has poor residual values, that money may not mean anything.'

A launch to the contract hire industry is 'imminent' but Volkswagen is first ensuring that any rebate it gives is used to cut the monthly lease cost to fleet customers, rather than being absorbed by the contract hire supplier.