Fleet News

Leasing: cheapest is seldom the best

COMPANIES which choose suppliers offering the lowest vehicle leasing rates often pay the highest charges at the end of the contract, it is claimed.

Additional charges on lease vehicles can include pence-per-mile costs for excess mileage or the cost of refurbishing a car because it has not been looked after properly by drivers.

Executives at software company cfc solutions noted the trend of higher out-of- contract charges for companies with low vehicle leasing rates as it was in the process of developing a new product.

Sales and marketing director Andy Leech said: ‘There are still a large number of fleets, perhaps even the majority, which will simply chase the lowest possible headline lease rate even though these are almost always accompanied by the highest out-of-contract charges.

‘Most fleets we have encountered simply accept these charges with the minimum of fuss, even if the bill they receive from their leasing company runs into four figures.

‘They simply do not take a proactive management stance.’

Fleets can put a number of policies in place to avoid this situation, the company claims.

Leech said: ‘For example, if you have a car that is about to incur excess mileage charges, it may be possible to swap the vehicle with another driver on the fleet who is covering fewer miles.

‘Similarly, if you are returning a vehicle in poor condition and are hit with refurbishment charges, you should have a policy in place to make it clear that the driver is responsible for the state of the vehicle and will be responsible for such costs.’

Fleets should track the actual cost of hiring a vehicle, taking into account all associated costs and not just the quoted monthly rate.

Understandably, cfc solutions said many fleets could monitor their costs using a fleet software system.

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