Fair wear and tear costs criticised for ‘lack of transparency’ (video)

Costs incurred for damage to rental vehicles being returned by fleets have been labelled inconsistent and lacking in transparency.

Chris Connors, head of fleet at ISS, explains that a vehicle would typically arrive on a short-term rental and be used for a period of time before being returned with the company charged for any “reasonable damage” that's over and above the fair wear and tear rules.

However, he told Fleet News at 10, he was seeing a “lack of detail” on invoices and a “higher charge”.

“Then, when we are trying to get to an understanding of what’s there, we’re not seeing the evidence, we’re not seeing the pictures, we're not seeing the report,” he said.

“It's just creating workload and costs involved.”

Connors says that part of the problem is that rental fleet vehicles are older and, as such are being delivered with more damage.

He added: “We’re seeing challenges around that condition reporting at the start, and then the condition reporting at the end.

“A lot of the time, deliveries are also taken via a digital signature, so it’s not marking on a form where damage is. It’s not clear to see for the person taking delivery.”   

He also admitted that he was wary of questioning invoices for fear of it impacting his ability to access limited rental stock in the future.

Dale Enyon, director of Defra Group Fleet Services, who was appearing on the monthly webinar alongside Connors, said fleets could employ a range of measures to avoid difficult conversations.

For example, he suggests that fleets should agree what the cost elements are. He explained: “You need to have a really robust process agreed in advance with your lease co. or your rental company.

“How much for a scuffed alloy, how much for a small dent, a large dent, whatever it is, because in the vast majority of cases... it's just a checklist of what prices they charge.”

He continued: “We are really clear that we only pay costs where there is evidence that supports it.

“Now often that’s quite challenging in terms of pictures and stuff, but it just means the person doing that assessment spends a bit more time doing it.”

He also asks drivers and line managers to regularly check vehicles, and to report any damage so it isn’t left to be picked up when a vehicle is returned.  

“It’s also worth benchmarking your end of contract damage with other companies within a suppliers list to see where you are in the best or the worst, to give you a sense of how well you’re doing and how well you're looking after your vehicle,” said Eynon.

“Work with the lease co. and work with the rental company to try and make sure that you have got a clear process that’s equitable, fair, evidenced, and that enables you to go back to drivers with a really clear picture of what they’re liable for and what they’re not liable for.”

The Association of Fleet Professionals (AFP) said it was in regular contact with the British Vehicle Rental and Leasing Association (BVRLA), which administers the fair wear and tear guidelines, and was monitoring the situation.

"We were aware for our members that it's a big challenge," said AFP chair, Paul Hollick. "I think some of it is because arguably, we're in a recessionary environment like we were in the credit crunch in 2007-2009, and the rental companies need to make sure that they are billing for what they believe is fair, based on the contract."

He added that if any fleets have any concerns, they could raise them the AFP and they, in turn, could could pass them on to the BVRLA.

An updated version of the BVRLA ‘Fair Wear and Tear Standard’ for cars was launched last year. 

It is used widely across the industry for checking vehicle condition, with the aim of giving a consistent reference point when determining end-of-contract charges.

The updated Fair Wear and Tear Standard, said the trade body, reflected the latest technologies and driver habits.

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