Fleets extending company car contracts last year could have set themselves up for extra costs, according to Manheim.

Higher maintenance bills as well as higher fuel costs from retaining less efficient cars for longer were found on its own fleet of 400 company cars, and the company said other organisations are likely to have experienced similar expense.

About 30% of its clients extended their contracts in 2009, typically adding four months and 6,000 miles to the time a car spent on a fleet.

“We behaved as a lot of fleets did. We have 400 company cars and we extended the contracts up to 90,000 miles and four years,” Manheim group sales director John Givens explained.

“One of the consequences of extensions could be an increase in the amount of damage over fair wear and tear, and there has also been an impact on maintenance.”

Manheim, which runs its company cars from several months old rather than from new and has an average annual mileage per car of 21,000 miles, saw maintenance per car increase from £700 to just over £1,000 – an increase of more than 40%.

Givens said that if that was translated across Manheim’s entire fleet, it would have resulted in an extra £120,000.

He added that as fuel consumption has improved on new vehicles over the last four years with some cars achieving up to 10mpg more than their equivalents of a few years ago, pointing out that companies keeping cars for an extra six months could have missed an opportunity to switch to more efficient cars and cutting fuel costs.

However, he accepted that one of the effects of the recession was that where companies had been forced to reduce costs by making staff redundant, introducing new company cars to fleets could have sent out the wrong message.