FMG Support will launch an insurance product next month that protects fleets and leasing companies against end-of-lease charges.

With bills for repair work on ex-lease cars accelerating rapidly, FMG Support's Leasecare scheme comes at a perfect time. The company has been working on it for the past couple of years in conjunction with Risk Transfer Insurance Management.

Stefan Rodgers, FMG marketing director, said fleet customers were keen to mitigate the cost of end-of-lease charges, typically for items like alloy wheel refurbishment, upholstery rips and tears and bodywork scratches.

“They are looking for a way to fix the cost of the vehicle over its lifetime,” Rodgers said. “Leasecare makes sure they don’t get hit with an unknown charge at the end of the lease.”

According to Manheim, end of lease charges recovered by contract hire firms from fleets have risen from £265 per vehicle to £290 on average (Fleet News July 16). Rodgers says part of the reason is due to extended replacement cycles which means cars are potentially subject to greater damage.

Leasecare will cost between £290 and £350 for a standard Mondeo-sized fleet vehicle depending on the duration of the policy. It covers vehicles for up to £1,500 of repair costs over and above fair wear and tear as detailed under the BVRLA guidelines.

The policy can also be tailored to individual fleet needs should they require a higher level of cover.

“Van fleets in particular have an opportunity to pay a higher premium and be covered for a larger amount,” said Rodgers.

He expects to sell around 10,000 policies in the first year.

Leasing companies have also shown an interest in offering the Leasecare product as a service for the fleet customers, using it as a retention tool. FMG expects to sign up a couple of companies over the next month.

“It is also ideal for cash for car and eco scheme drivers to protect themselves against charges at the end of the lease,” Rodgers added.