Contract hire companies are turning their focus to recovering more end-of-life charges on vehicles as a new revenue stream.

The move, which aims to recover some or all of the cost of refurbishing a vehicle which does not meet pre-defined standards (such as to the BVRLA’s fair wear and tear limits) when it is defleeted, is likely to cost fleets money as the contract hire firms will look to pass the costs on to fleets. According to Manheim, the average end of lease charge is now £290.

Manheim has seen a stronger focus on end-of-life charges so far this year, and damage recovery is now being seen by the contract hire companies as a mainstream activity. Whereas a few years ago they would be budgeting to collect around 35% of the damage costs, they are now setting 70% as a target.

David Mercer, managing director of Manheim DeFleet Services, said: “This is now a core part of the defleet process – it’s about getting the most money for a vehicle.

“Fleets, contract hire companies and finance houses are now setting financial targets for damage recovery, whereas before it was a below the line activity.”

And the charges don’t just apply to a scratched bumper – charges are even being raised for missing documents and service history stamps.

Prices for reinstating these missing documents vary hugely - finance house charge between £25 (the cost price) to £175 for a missing V5 form, while charges for missing service histories vary from £100 to £750 for top-end models.

According to Manheim, only a quarter of cars being defleeted come back in ‘standard’ condition, which conforms broadly to the BVRLA’s fair wear and tear guidelines.