Fleets that have inherited company cars and vans through business acquisition face substantial charges because their leasing agreements have inconsistent guidelines on end-of-contract charges.

Damian James, head of transport provision at Bracknell Forest Council and Graham Short, car fleet manager at Indesit have both ‘inherited’ leasing contracts which are vague about charges and do not refer to the BVRLA’s fair wear and tear standard.

James, whose fleet is predominantly vans, said: “I’ve inherited finance leases with 10 different companies that I would never have signed up to.”
Short is in a similar position.

“I inherited the contract from another department and it’s now down to me to manage the operational side. Companies need to listen to fleet managers when agreeing contracts.”

Indesit uses four leasing companies and when Short was involved in one contract negotiation a damage waiver was included in the contract.

“My advice to other fleets is to have clear guidelines in place with their supplier,” Short continued. “People often look at the cost of the lease and at mileage charges but they need to be more aware of any back end charges.”

Both Short and James are finding themselves particularly vulnerable now that leasing companies are taking a tougher stance on damage, as they look to maximise revenue from every vehicle (Fleet News, June 11).

Short said: “I am now being charged for damage, such as a scuffed alloy, that I would not have been charged for previously. In the most extreme case I was charged £500. The condition of our cars has not changed – they are all put through our on-site workshop before being returned to the leasing company.”

Fleet consultant David Dippie has also noticed a change in leasing companies’ attitude to damage.

“They are looking at every issue much more closely,” he said. “Historically, they would have waved the vehicle through with a nod. Now, it’s a more stringent inspection process.”

James agreed: “Before, their attitude was ‘don’t worry about the odd dent’. Now they want to tot up the damage exactly and charge full whack.”

James is now in the process of changing all his agreements to contract hire with maintenance, using companies that are members of the BVRLA.

For an in-depth look at contract charges see next month’s FN50.

BVRLA fair wear and tear guide

Fleet managers should make themselves familiar with the BVRLA’s fair wear and tear guide which sets out minimum standards of what is acceptable when returning a vehicle.

It states:

• Scuffs of up to 25mm on wheel trims and alloy wheels are acceptable.

• Scratches up to 25mm, dents up to 10mm (provided no more than two per panel and the paint surface is not broken) and small areas of chipping are acceptable, relative to the vehicle’s age and mileage.

• The stamped service book must be available for inspection.

• A full set of keys, including master and spares should be available at return.

For a full version, go to http://www.bvrla.co.uk/Publications/Business_focused.aspx