Fleet News

Damage repair costs rocket for fleets

Average damage costs to company cars being incurred by fleets has more than doubled in the past 18 months.

In February 2010, the average repair bill for a vehicle from the fleet sector was £110, according to Manheim. The figure for June 2012 was £246.59 – an increase of 123%.

The value of the damage is based on the BVRLA’s ‘fair wear and tear’ assessment of the car.

Craig Mailey, marketing director at Manheim, said that they had only just received the data and were still working out what may be behind the figures. “What is safe to say though is that you’re getting cars that are older and with higher mileage.”

However, with a shortage of good quality stock in the market currently pushing up fleet values, does it really pay for a leasing company, or an organisation that purchases its vehicles outright, to pick up the bill for costly repairs?

Pricing expert Adrian Rushmore from Glass’s doesn’t think so. He said: “With the strength of the market as it is, why spend the money?”

That view was backed by Daren Wiseman, Manheim valuation services manager.

 


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Comments

  • chizzy - 22/08/2012 12:18

    There are other issues at play here: 1) SMART repair equivalent rates have become more the norm. On the one hand that is good because each repair is usually less than it would have been only a few short years ago. So a bit of damage to a bumper can be repaired for £55 when in the past it would have been charged as a respray at a cost of circa £300. On the face of it that's great news for the client. Or is it? That £300 repair may well have been a difficult case to justify in many cases, especially when age/mileage is taken into account. £55 is a much easier cost to justify, and because of that the 'Charge to Customer' box is ticked much more often. This is particularly the case with Alloy Wheels. So it becomes much more difficult to argue against the charges when each charge is so 'reasonable'. So the non-invoicing of the £300 repair of yesteryear bcomes the 'reasonable' £275 for 5 smart repairs. 2) Because of the above the leasing co. is much less likely to take into account the overall condition of the vehicle. How come there is only a Debit column when it comes to assessing the condition of a vehicle? Where's the Credit column for exccessive under mileage or above general condition? Oh, I'm sorry. Are we not supposed to mention these things? A bit like the Early Termination costs charged against unused Maintenance I guess. Is it any wonder that many of our customers feel so at the industry's mercy sometimes, especially at the end of a contract? Many talk about providing great customer service and value for money, but in reality there is so much more that as an industry we could do on that front. No wonder then that the leasing industry has allowed Contract Hire to become a commodity product and viewed by many as no more demanding for the customer than deciding between one brand of baked beans or another. Rob Chisholm, MD Applewood Vehicle Finance Ltd

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