Excessive End Of Contract Charges

Wednesday, 16. July 2008

Leasing companies are really starting to feel the squeeze from several directions. Interest rates are going up, new car prices are increasing, there are fewer customers and more importantly used car prices have taken a sudden dive resulting in losses on virtually every car that is being de-fleeted forcing rates up further on new cars in order to balance the losses. However, in addition to the rate adjustments we have seen many leasing companies try to recoup losses from customers by making large end of contract charges. I have written on this subject on several occasions so I won’t bore you with the precautions you need to take but another potential problem is hovering in the distance. It relates to smoking in the car. Most company car drivers have now been made aware of the no smoking rules that apply to company cars or private cars that are used for company business and may carry passengers whilst being used for this purpose. So there has generally been a vast improvement in the interior condition of company cars being returned as they come to the end of their lease. However, the question has been raised over privately leased cars. Drivers can still smoke in their cars so what happens at the end of a lease where the car has been driven by a heavy smoker? Buyers of used cars are becoming more fussy and in this buyers market auction expectations are less if a car shows signs of smoking inside. So it seems logical that the leasing companies will view smoke damage as outside fair wear and tear which could result in replacement trim including the head lining at a cost of several hundreds of pounds. It has become normal practice to charge for trim that has been burned by cigarette ash but this may be a further reason why smokers should stop for a smoke break rather than continue to smoke whilst driving. Even if you own the car you may well find that when you come to sell it you have to take less for it because of damage caused by cigarette smoke. As a non smoker myself I would never buy a used car that smelt of smoke, even a thorough valet doesn’t remove it completely.