Fleet News

Leasing firms accused of repair cost rip-off

LEASING firms are using cheap labour to fix fleet cars but still charging sky-high repair rates, a new report suggests.

The report by Bethell Fleet Services reveals that more than half of the service and repair work carried out at independent garages is done on behalf of contract hire companies.

But it claims leasing companies are charging their customers maintenance costs based on the hourly labour rates of more expensive franchised dealers.

Tim Jones, Bethell's commercial director, warned that fleets could be losing out on financial savings made by contract hire companies using inexpensive independent garages.

He said: 'We now have proof that contract hire companies regularly use independent garages for servicing fleet vehicles because labour rates are between a half and two-thirds cheaper than those charged by franchised dealerships.

'But whether contract hire companies pass on those savings to their customers is another matter.

'We believe in some cases they do not. They would probably argue that this is because they do not control where their customers have their cars serviced. As a result, they apply maintenance rates which reflect the highest hourly labour rates in the country, in other words, those at franchised dealerships.'

The study found that the use of independent garages by contract hire companies was becoming increasingly popular with 85% of independent garages regularly carrying out maintenance work for contract hire companies on vehicles still under warranty.

Thirty-eight per cent of garages said contract hire business made up more than half of their service and repair work.

Half of the 78 garages surveyed had a successful warranty claim against a manufacturer in the last 12 months.

Four out of every five of the garages said no warranty claims, or 'very few', were rejected by motor manufacturers.

But more than 90% said they always used the manufacturer's parts on any replacement.

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