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Coronavirus: Thousands of fleet vehicle contracts extended

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Thousands of company cars and vans had their contracts extended during the coronavirus crisis, according to new data from Epyx.

Looking at transactions through its 1link Service Network service, maintenance and repair (SMR) platform, used by fleets operating four million vehicles, it has produced a comparison for April-August 2020 – the height of the pandemic so far – with the same period in 2019.

It shows increased SMR for vehicles that had passed their stated contract end. Overall, around 10,000 additional routine services were carried out at a cost of £1.6 million.

Also, despite the Government’s temporary suspension of the requirement for MOTs, there were a further 11,000 tests for company vehicles at a cost of around £550,000.

LeasePlan recently told Fleet News that contract extensions had increased by 50% during the coronavirus crisis, while other providers said early terminations of company car contracts were on the rise, highlighting the pressures faced by fleet operators.

Debbie Fox, commercial director at Epyx, explained: “Like the rest of the fleet sector, we were anecdotally aware that widespread contract extensions were occurring but not really the full extent and these figures help to shine some light on what has been happening.

“Usually, there are very few maintenance actions concerning contract-extended vehicles on 1link Service Network but, in 2020, there have been significant numbers.

“The causes of this were probably two-fold. On one hand, getting hold of new vehicles and having them delivered was very difficult during the period in question and, on the other, some fleets were undoubtedly extending contracts on existing vehicles, almost certainly in order to minimise future financial commitments while they took stock of their situation.”

Epyx has previously warned that fleets extending replacement cycles in the wake of the coronavirus crisis need to consider additional SMR costs

Fox says that there were some further interesting trends to pull out of the data about the decisions that fleets took during the coronavirus crisis.

“One point to note is that, even while they legally had no requirement to do so, large numbers of fleets were continuing with MOTs,” she said.

“These decisions were presumably driven by risk management considerations, that ensuring vehicles still met minimum legal requirements remained important to operators. This is a choice to be applauded.

“The other is that the data also showed a considerable fall in mechanical and body repairs across nearly all of the fleets with which we work. This is to be expected as large number of vehicles were simply not being used to any great extent during the lockdown period.”

Fox believes that the April-August period has been probably the most unusual that has been seen during 1link Service Network’s 20 year history.

However, she said: “Things are back to pre-coronavirus levels in terms of the number of transactions going through the platform and their value but, like others across the fleet sector and beyond, we are viewing the next few months and the continuing impact of the pandemic with caution.”

The 1link Service Network platform is used by fleets totalling four million cars, vans and trucks to buy and manage SMR from nearly 9,000 franchise, independent and fast-fits.

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Comments

  • Brian Foster - 30/09/2020 12:01

    Gareth's article is 100% spot on. As a fleet operator, my remit during lockdown was 2 fold - Get rid of any short term hires to save money and informally extend the lease of vans due off fleet, so our Company could take stock as to what is happening in industry. Any company worth their salt would have taken a similar stance and it is noted that there are a lot more companies advertising short term hires, due to the continued uncertainty within industry. It's simple - we cannot continue to spend money on vehicles that are sat outside the office not sweating for the business. If other Fleet Managers have not taken stock of their vehicles during lockdown, then do it now. Your company needs every penny and those spare vans dotted around your company can be off-hired saving you a wage or two every month that you would have had them.

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