Fleet News

Daily rental: Avoiding hidden costs on your daily rental bill

FLEETS could be sitting on an undiscovered goldmine that could be unearthed in one simple step – switching daily rental provider.

Overcharging in the daily rental industry is not unheard of – not necessarily in inflated daily rental fees but in hidden extras masked in the small print of the contract. Knowing what to look for is half the battle in avoiding the extra costs.

The first step is to shop around for a daily rental provider. Ensure that each rental request goes out to a panel of preferred providers and select the one best placed to meet requirements. This could be on the basis of any number of criteria, including service levels, price or availability.

Rental companies like this approach because they can show they do more than just rental.

Tony Donnelly, chief executive of Goodwood Rental, believes that car rental has traditionally been provided as an add-on service to supplement the provision of a company vehicle and is often a distress purchase to meet an immediate short-term need.

He said: However, it can be surprisingly cost effective when used for longer-term use. To ensure you are getting the most cost-effective solution, it is important to negotiate preferential rates with your supplier based on volume of usage.’

Hidden costs can occur in several ways. Fleets should be scrupulous with invoices received from the rental supplier, ensuring the finer details are checked.

Added costs that can increase the overall rental charge include out-of-hours and registration, fuel refill, collection or delivery and damage.

Donnelly said: ‘In a corporate environment, where transaction numbers are high, bureaucratic processes can lead to heavily disguised over-charging.

Extra costs result not only from the over-charging itself, but also from the time and resources needed to reconcile erroneous invoices. Customers do not have the time or inclination to chase invoice queries. It should be the responsibility of the rental provider to deliver an accurate, measurable service.’

Fleets paying a standard £25 daily rental charge could actually end up paying double if they fail to read the small print on the invoice.

So it is important to check invoices closely, dispute any errors and make sure they are resolved before payment.

However, this can be extremely labour-intensive and stressful. Some rental companies seem to rely on this putting people off trying to resolve their invoice discrepancies.

The most effective way to avoid many of these charges is to ensure your organisation has a carefully crafted service level agreement (SLA) with your rental provider, covering all the additional charging opportunities and supported by meaningful key performance indicators (KPI’s) to measure and monitor service levels.

Donnelly said: ‘A carefully outsourced rental management facility should take care of all the anomalies and provide a monthly report highlighting the services used and providing detailed back-up to all exceptions.’

As part of the agreement, fleets should check that the rental supplier notifies them within 24 hours of any rechargeable damage to a vehicle, which ensures liability can still be proven.

Another way of avoiding mishaps during the invoice process is to opt for a rental provider that uses an online booking and reporting system.

This eliminates the opportunity for human data entry errors and wastes less time on booking cars and waiting for delivery.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee