Help for Fleet Managers
Here are some things we have picked up over the last few years while doing lease return inspections.
Here's a good idea! Why not negotiation they buying price of your cars at the start of the lease. This way, your drivers know that they have the option to buy, and at what price. If you can negotiate a very good price based on the Glass's or CAP's price guide, your drivers will be encouraged to look after the cars as if they were their own.
Update: If you are going to do this, ensure that your drivers take full advantage of the warranty period before it runs out to fix any small problems. It's at a transfer of ownership that people think about any problems, so try to encourage them to agree the purchace on month 35 but make the purchase on month 36.
One national company we know of inspects it's drivers cars every year and the
drivers get a bonus (at around Christmas time) if the cars are in good condition.
One driver had a smart repair done with us at a cost to him of £99inc,
he then valeted the van himself and received a company bonus of £271.
No doubt these bonuses are paid for by the savings the company makes because it's vehicles are always returned in a good condition. It works all ways around because the driver has an incentive to look after his vehicle throughout the year, and the good looking van is representing the company's image being sign written.
If your drivers are leasing their cars through your company, or contributing in any way at all, we recommend that you charge them more, giving the money back in bonuses rather than penalizing them at the end of contract. This makes the glass half full rather than half empty for your employees.
With some cars incurring recharges for excessive wear and tear for as much as £2000, if drivers are responsible, it may be as well to offer a scheme where drivers pay into fund which can cover these kinds of cases. You may think that anybody who incurs two thousand pounds worth of damage deserves everything they get... but some people do live where they have to park on busy streets, near schools or where lots of people are passing by... or their work may mean they have to visit these kinds of areas. It is usually the little knock, dents, dings and scratches that mount up and can't be claimed on insurance.
No Claims Bonus
Drivers that are on the company insurance will often ask you for a letter that demonstrates that they have had no (or few) accidents so that they can get cheaper insurance on their second car. One company we know had their insurance company write annually to all their drivers with a statement of their no-claims. It is in the insurance company's interest to offer your drivers deals on policies. In turn it will be in your driver's interest not to make claims!
Most companies give their drivers a Fair Wear and Tear guide, tell them to
adhere to it, and let them deal with the business of lease return at the
end of contract. Other companies are just picking up the bill for lease return.
Both of these methods can result in problems.
The problem with picking up the bill is obvious... it costs you a lot of money,
especially as drivers have no carrot or stick to ensure they look after vehicles.
Passing the responsibility on to drivers also has a drawback because you can't suddenly learn the business of lease return at the end of a lease, properly inspect the vehicle, arrange for repairs to be carried out efficiently, properly and cost effectively, so what happens is that they return cars and incur recharges. This can lead to high costs for your employees who then get upset with you. These are the very people you rely on to earn your company money.
Furthermore, the lease company is not getting cars returned in the condition they would like, and they are having to deal with your angry employees... which will hardly make them inclined to give you good deals next time around. One lease company we know has to deal with forty disputes per week from disgruntled drivers - these are time consuming and costly. Another lease company we know sacked a large organization because of the arguments about fair wear and tear.
The only solution to this problem is to make drivers responsible
for their leased car, but to help them to do this. For the most part,
this help comes in the form of education on how to care for their cars from
the moment you hand over the keys.
The good thing about this is that most of the education can be done in written form, so you only have to do it once, its just a matter of pointing your employees to the information.
Even then some people will need a little help with the return process, so it is useful to have a list of recommended companies in your area where they can take their cars for professional help.
Excess Mileage Recharges: Lease companies make more recharges for excess mileage than they do for excess wear and tear... for the company being charged they often loose at both ends, while as part of their fleet is being charged for going over the mileage allowance, the other part is coming in well under, which in effect means you are paying for mileage that you aren't using.
The best solution to this problem is to keep careful track of your cars mileage and renegotiate if possible, otherwise you can pool cars, swapping those with the highest mileage for those with lowest halfway through the contract period. We realize that having your drivers swap cars is not the easiest thing to do if they are responsible for any damage, which is where we can be of assistance...
To avoid one driver passing damage (as well as mileage) onto another driver, we recommend treating any driver-to-driver exchange as if it were a lease return, ensuring that each car is passed onto it's new driver in an acceptable condition.
Our End-of-Lease Services provide quality repair for excessive wear and tear, and is acceptable and appropriate for Contract Hire, Personal Contract Purchase (PCP), Private Lease, Contract Purchase and Lease Purchase. Fleet managers wishing to efficiently prepare off-lease vehicles can contact us or send their drivers directly to our Q&A. Our advisors are trianed by Manheim to work to the BVRLA guidelines.