More than one-third of leased vehicles returned to Activa Contracts attract no damage charges

Activa Contracts has highlighted its approach to damage charges, described as 'the cause of the biggest degree of conflict' between fleets and leasing companies.

The company says it works pro-actively with fleet managers to avoid and minimise defleet charges in the first place, and when damage is incurred it adopts a careful, fair and open policy that ensures that conflict is avoided.

The business, a division of FN50 top 10 leasing company Arnold Clark Finance, highlighted its end-of-contract damage strategy after company chiefs led by managing director Ian Hill attended a recent ACFO seminar held at Company Car in Action on the issue.

End-of-contract vehicle damage charges were highlighted as the “cause of the biggest degree of conflict” between fleets and leasing companies at the seminar.

Martin Hughes, remarketing manager at Activa Contracts, said: “We do need recourse to our customer where damage causes a reduction in resale value, but we are more understanding of our customers’ perspective than many other leasing companies are and the policies and processes that we adopt in dealing with refurbishment costs ensure that we simply do not get into dispute in this area.”

He added: “Well over a third of all vehicles returned to Activa incur no charges whatsoever, but where damage does exist, the majority of our customers take the option to return the vehicle without prior refurbishment work being undertaken in the knowledge of our fair and open approach to recharges.

“We do not seek to make money out of recharges - we simply need to recover the impact that the damage has on the resale value. We believe that our end-of-contract recharge levels are amongst the lowest in the industry and our reward for this comes from high levels of customer satisfaction and retention.”

One of the most common end-of-contract damage recharges levied by Activa Contracts is in respect of bumper damage to the four corners of a vehicle and for this reason, customers are encouraged to specify parking sensors where these are an option as they can effectively become self-financing.

Other avoidable charges highlighted by Activa Contracts were for windscreens, whereby unrepaired eye-line chip and cracks de-laminate and lead to the need for replacement and alloy wheel scuffs that result from ultra-low profile tyres being specified.

Hughes said: “We consider our approach to end-of-contract damage recharges to be a part of our customer relationship building process.

"While we do need to be able to recover the impact of damage on the resale values of our vehicles caused by unfair wear and tear, we do not seek to profit from customer recharges.”