Fleet News

Ogilvie Fleet takes new approach to damage charges

Ogilvie Fleet operates a transparent policy in respect of defleet company car and van damage charges by telling customers what they will be at the outset of the contract.

What’s more, when a customer returns a vehicle that is charge-free Ogilvie Fleet now sends the fleet manager a congratulatory email thanking them and the driver for returning the vehicle in “good clean condition”.

Ogilvie Fleet operations director Jim Hannah said: “We want customers to have a pleasurable experience when they lease vehicles from us and not for it to be tainted by a battle over end-of-contract charges.”

Fixed cost recharge matrix

The company operates a standard fixed cost end-of-contract damage recharge cost matrix that customers leasing company cars and light commercial vehicles sign up to in their master hire agreement.

Irrespective of whether a company car is a supermini or from the executive sector, Ogilvie Fleet end of contract damage recharge costs to return a vehicle to British Vehicle Rental and Leasing Association ‘fair wear and tear standard’ are: £75 for a door panel, front wings and rear quarter panels; £120 for a bonnet, boot lid, tailgate, bumper or roof.

Similarly for light commercial vehicles, sample recharge prices include: £75 for door panels and front wings; £120 for side sliding doors, large side panels or bonnet, tailgate and bumpers; £250 for a roof.

Hannah said: “Our standard end of contract damage recharges are substantially less than would normally be expected and we know that such repairs could not be completed by a customer at these prices. Our pricing matrix is widely accepted as fair and reasonable within our customer base.”

Acceptance rate

Ogilvie Fleet has a virtual 100% acceptance rate on end-of-contract charges applied compared with a query/rejection rate of 44% prior to introduction of the matrix.

Hannah said: “Many of our competitors use bodyshop pricing as the basis for end-of-contract charges and they can be very expensive and result in disagreements between lessor and customers.”

Vehicle condition is initially assessed by Ogilvie Fleet’s collection agent with the driver or fleet manager present, but no damage costs are advised or agreed at that point.

Subsequently each vehicle is assessed by Hannah or one of the operations team and any damage is notified to customers using the fixed cost matrix and supporting digital images and electronic appraisal.

In the 12 months to June 30, 2013, of 2,787 cars and vans defleeted a total of 61% attracted no end of contract damage charges.

The average cost per vehicle across the 39% where damage charges were levied was £241; while the average charge across all defleeted vehicles was £87.

Despite a greater number older vehicles returning in 2013 due to fleet replacement cycle extension as a consequence of the tough economic climate faced by many businesses in recent years, average damage charges have been held at what Ogilvie Fleet believe are industry leading low levels:

Year    Damaged %  Average damage on all defleeted vehicles

2010    21%                 £50                                                     

2011    31%                 £78                                                     

2012    39%                 £110                                                   

2013    39%                 £87                                                     

Hannah said: “Given the increased age and mileage of vehicles being returned I think we are being more benevolent towards customers in terms of end of contract damage charges.

"It would be natural to assume that older vehicles would incur higher charges, but we want to be fair and reasonable to customers and we are more lenient towards vehicles that are four, five or six years old and have clocked up high mileages.”

Ogilvie Fleet's new ‘thank-you email’ has won client support.

Christine Bamber, fleet manager at Cegedim RX, which supplies software solutions and computer services to UK pharmacies and operates more than 100 cars, said after receiving an email: “It is the first time I’ve had one of these! I like it. With our previous supplier end of contract charges used to be quite high whereas with Ogilvie we do not have that problem.”

Rodney Harkins, in charge of the fleet of more than 100 company cars at Glasgow-headquartered Community Eyecare Ltd, which trades as Visioncall, said: “It was a very pleasant surprise to be congratulated on returning a couple of our cars in good condition and that no end-of-contract charges were due. Over many years, we have received excellent customer service from Ogilvie, and this is another example.”


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Comments

  • Rob Chisholm, Applewood Vehicle Finance Ltd - 09/08/2013 12:35

    Virtually no independent major leasing company uses bodyshop pricing these days for EOC pricing, and SMART repair pricing is now the norm. What is actually charged FOR is the issue, and we all know that the Manufacturer leasing operations are the most zealous in this respect. They have to cover their overly competitive rentals one way or another, which their customers find out after return of the vehicle. However, using SMART repair pricing has in itself created another issue in our experience. In the past a vehicle that was returned in generally good condition and under contracted mileage that otherwise demanded a repair to, say, the bumper due to a scuff might avoid that charge simply because a fair minded leasing company would think that overall they would find it difficult to justify a £350+vat repair bill. Now they are charging typically £75.00+vat for the same repair, and because every other repair or wheel scuff is now priced so reasonably those boxes are getting ticked on a more frequent basis. It is difficult for the client to challenge a £350 bill for a number of small reasonably priced repairs isn't it? Especially when they've signed up to them in the contract. Overall though I would say that most majors are acting fairly reasonably under the new system. It would be nice if the customers could see how they are leaving themselves so open to rapacious charging by some of those with the most 'competitive' pricing though. You won't see such transparency from those operators!

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