Fleet News

Lease damages hit £100 million

CARELESS drivers are costing their employers more than £100 million in damage recharges on leased cars every year – a bill which has reached its highest level in five years.

Since 2001, the number of returned lease vehicles incurring charge for damage outside fair wear and tear guidelines has risen from 32% to 38%.

The scale of the recharge problem is revealed this week in exclusive research for the annual FN50, the in-depth report published by Fleet NewsNet on the UK’s 50 largest contract hire and leasing companies.

The top 50 firms account for more than 1.4 million leased vehicles and hundreds of thousands of these are returned at the end of their contracts each year.

Leasing companies have strict fair wear and tear controls, monitored by the British Vehicle Rental and Leasing Association, to ensure that only damage which is beyond that accepted for a car’s age is charged back to the customer. But research in the FN50, revealed this week, shows that in some cases 80% of cars returned were incurring a charge.

On average, fleets are having to pay £215 on each claim, although in some leasing companies the average rises to £580.

The survey raises serious questions about the driving standards among Britain’s millions of company car drivers, but also puts the spotlight on whether fleet managers are controlling their drivers and effectively monitoring vehicles during their fleet life.

The scale of the problem is so great – and the paperwork so demanding – that some leasing companies have decided they will only act on damage recharge claims above a certain value, both to maintain good customer relations and because administration savings outweigh the value of small recharges.

The FN50, sponsored by National Car Rental, Kwik-Fit Fleet, RAC Auto Windscreens and Nobilas, also reveals that companies are paying hundreds of pounds per vehicle in excess mileage charges. Some 32% of returned vehicles are charged for covering more miles than stated in their lease, with the average charge reaching £382, more than the damage charges.

But leasing companies point out that these costs can be offset if fleets pool their mileage, so vehicles that are returned below their contracted mileage receive a credit, which pays off the over-mileage debt.

  • For extra copies of the FN50, call Kate Batchelor on 01733 468306 or visit the Supplements section of FNN.
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