The shortfalls on the prices achieved for end-of-contract cars are shared between Lex Service and Halifax, co-owners of Lex Vehicle Leasing.
They both accounted for the extra costs through a joint £90 million provision announced in last year's results, so the losses did not register on interim profits for the leasing firm, announced as part of Lex Service's results for the six months to June 30. Lex Vehicle Leasing made a pre-tax profit of £15.4 million, shared equally between Lex Service and Halifax, compared to a contribution of £5 million last year, when figures were dented by a £5.5 million residual value loss.
The firm's fleet dropped 900 vehicles to 92,100 year-on-year, although this is still 1,000 units above the 91,100 low hit at the end of last year.
Overall, pre-tax profits at Lex Service rose to £31.4 million from £29.2 million for the same period last year. Year-on-year group turnover was down from £682 million to £572 million.
RAC Motoring Services contributed £17.7 million, including £4.3 million from RAC Auto Windscreens in the three months since it was acquired for £112 million. Windscreen turnover was up 11% from £46.8 million to £51.9 million.
Excluding the acquisition, profits at RAC Motoring Services were slightly down at £13.4 million compared to £14.3 million for the same period last year. Lex Multipart's contribution was unchanged at £7.1 million, while Lex Vehicle Marketing fell to £2.7 million profit from £4.9 million.
Its Hyundai importership registered 13,653 new cars, compared to 14,756 in the same period last year.
Andy Harrison, chief executive, said: 'Our profit growth confirms the benefits of Lex's transformation into a strong service business built around the RAC and Lex brands.'