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Avoiding end of contract damage charges

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10 August 2015

Tips to avoid end of contract damage bills on your lease cars

Jim McNally, head of asset risk at leasing provider Alphabet
McNally: tips
  • Make sure there is a clear understanding of the contract with your leasing provider
  • Ensure that your company car policy details the rules and procedures for drivers and what is expected of them
  • Have an internal process to ensure that drivers are given notice weeks or even months prior to collection of the vehicle for a pre-inspection to take place
  • Ensure that any issues that can be repaired in-house are done so and if in doubt, query with your leasing provider prior to sending the vehicle back
  • Use reputable SMART repairers to undertake work prior to defleet
  • Ensure that a system is in place to check vehicle service books, wheel nut socket sets, spare keys, parcel shelf, load cover and head restraints are all returned with a vehicle – along with the spare keys!
  • Ensure that company owner or fleet manager is present at the time of collection and that all damage is agreed upon at the time of handover

Source: ACFO

END of contract damage charges are often the main cause of the dispute between clients and car leasing companies.

It’s that moment when you return your business car at the end of its lease.

It’s subject to ‘fair wear and tear’. The BVRLA has produced a definitive version of fair wear and tear, but that doesn’t always mean it’s implemented consistently. Or, indeed, meets your idea of what is fair.

Jim McNally, head of asset risk at leasing provider Alphabet, said;

“As an industry we need to make drivers more aware of what is included within fair wear and tear and what isn’t.

“Driver communication is key. We have a common interest in what is a deeply emotive topic. During the fleet life of a vehicle there are a number of opportunities to assess it and get feedback, but there are too many times where that is compressed into the last four months of a contract.

“It is essential that drivers meet leasing company representatives at the time of vehicle collection for face-to-face discussions on vehicle condition assessment. Too often the keys are simply left at reception for collection.”

It means that business car manager should have a policy in place where they inspect cars regularly and make sure that damage is repaired in a timely fashion.

The same goes for sole traders and one person limited companies running a business car on a business car lease: if you crunch the alloys, get them repaired straight away – or at least before you return the car.

Meanwhile, Graham Short, chairman of ACFO’s East Anglia Region and fleet engineer at Anglian Home Improvements, has this advice for SME small fleets and those running business cars:

“We need to make drivers aware of damage costs and tell them to keep cars in good condition and what happens if they don’t.”

 

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