FLEET operators face unexpected damage recharges and excess mileage charges of more than £100 million every year.
The shock figure is revealed in exclusive research for the annual FN50, the list of the largest leasing companies in the country according to their funded fleet size, which was launched at a gala dinner last night and is included free with this issue.
Fleet News unveiled the new FN50 at a special launch event last night in London.
It reveals that the average damage recharge paid by fleets has now reached its highest level in six years, at £235 per vehicle. More than one-third (38%) of returned vehicles have damage that exceeds the generous standards set down by the British Vehicle Rental and Leasing Association in its Fair Wear and Tear Guide.
Based on this year’s FN50 fleet size of 1,440,317 vehicles, and assuming vehicles are on a three-year cycle, the value of the damage charges could be more than £41 million.
In addition, 29% of vehicles are returned with more than their contracted mileage, which leads to excess mileage charges. On average, these charges are £461. Across the FN50 this would mean fleets incurring combined penalties of more than £62 million.
Although it is leasing companies that bring the bad news and impose additional charges for tens of millions of pounds, fleet managers and drivers only have themselves to blame for the problem, critics say.
Fleet managers could wipe millions of pounds from the industry’s costs simply by monitoring vehicle mileage and damage more effectively.
Leasing companies are also playing their part, with HSBC Vehicle Finance recently announcing that it was increasing the damage waiver for end-of-contract vehicles from £400 to £500 from this month.
In the worst examples, FN50 companies say customers are paying average excess mileage figures of more than £1,000 and incurring charges on 60% of their returned vehicles.