Maintenance: bundle or debundle?

Fleets at the Fleet200 Strategy Network meeting at Kenwood Hall Hotel, Sheffield, on whether to include maintenance in lease arrangements or to debundle it and embrace a pay-as-you-go model.

During a roundtable discussion, those that bunded it cited reasons of convenience and the security of fixed monthly payments.

However, this approach could mean an organisation is incurring unnecessary expense, warned another.

“We split it out so we could then manage the cost,” said one fleet manager. “As an example, prior to the debundling we were getting charged £25 per vehicle for tyre maintenance, contributing to a monthly maintenance payment of £150 to £180.

“That’s ludicrous, so all new leases now are PAYG maintenance.”

Fleet managers also felt that because leasing companies are risk averse, they have bumped up the prices for maintenance for EVs.

“However, it’s now transpiring that a lot of cars under lease aren’t requiring any maintenance at all,” said a fleet manager.

“If you’ve got the time and information on PAYG then it makes sense to do it. I found I can get the information I need because it’s all held by my fleet management company and I can access it anytime I want.

“If Michelin tyres are cheaper than Bridgestone tyres in a particular year then I can move to Michelin, while if you’re a lease company you might end up putting budget tyres on to keep the cost down.”

The table heard budget tyres are a “false economy”. “Although they are cheaper, they do not last as long as a mid-range or premium tyre,” said a fleet manager.

Lead times frustrate

Long lead times for new vehicles continue to frustrate fleet decision-makers.

“Lead times are hovering at around 12 months, and if the existing lease car is in good nick we just extend the lease,” said one fleet manager.

“We had pretty much a year-and-a-half of covid where few miles went on, so that has kept the cars alive a bit longer than the case may have otherwise been.”

Another fleet decision-maker added: “We’ve got 11 estates on order but had a price increase from a certain manufacturer, but we need those cars.

“The monthly rental went up by £44 but there aren’t many estates you can choose from so although you feel like ringing up and cancelling them we need those cars and the manufacturer knows we do.

“If you place another order then you need to start all over again with a lengthy lead time, so we’ve got our hands tied behind our back.”

No TCO calculation

One fleet has taken the decision not use a total cost of ownership calculation when setting its company car choice list.

“We don’t supply fuel, so why does it matter?” he said. “The driver puts the fuel in and then claims for business mileage.

“The only time I do TCO is when I set the company car band limits and that is purely around National Insurance Contributions.”

The company is paying less in NIC as the fleet is electrified, so uses those savings to further incentivise EV take-up.

“We now have three policies: a PHEV policy, a BEV policy and an ICE policy,” he said. “The bands are determined by monthly rentals and the limit is higher on BEVs than it is for the other two.

“We even restrict the trade up limits people can have on different powertrains.

“You can’t have a trade up on a diesel, you can pay a small trade up on a PHEV, but you can pay quite a significant one on a BEV.”