Hints On Avoiding End Of Lease Charges
Friday, 4. December 2009
Companies and consumers are experiencing the long term results of choosing lessors who set out to capture the gullible by offering low contract hire and PCP rates 2 and 3 years ago. As used car prices continue to drop after a period of sustained increase throughout 2009 lessors who cut their margins finely look to recover losses by overcharging clients for refurbishment work at the end of the contracts with little regard for repeat business. Even large fleets are experiencing higher charges, causing experts to issue warnings and recommend ways to mitigate end of contract charges:
1) Find a flexible leasing company: Some will waive all or part of the recharges whilst others will charge a little extra per month in order to cover any recharges within reason.
2) Shop around for a damage waiver: Some lessors have a recharge sum under which it won’t be passed on, in the case of HSBC Vehicle Finance this is £500 for its large fleet customers. Since introducing the scheme only 2 in 10 are recharged anything compared to the previous figure of 6 in 10.
3) Know the BVRLA Fair Wear and Tear Guide: This is the industry standard used by all members of the BVRLA to set the acceptable standard for returned vehicles at the end of a lease. But beware of the rogues who are less than specific when it comes to termination condition.
4) Have clear guidelines: If the contract doesn’t specify the BVRLA guidelines as those adopted by the lessor ask for specific and clear acceptable end of contract condition recharges.
5) Consider an insurance scheme: Mentioned before by me FMG has launched a scheme called Leasecare which covers you for up to £1,500 of unexpected charges at a cost of between £290 and £350 per car for a standard family saloon. Higher levels of cover are available. This doesn’t include excess mileage.
6) Have a driver policy: If you are a business and you provide drivers with lease vehicles you should have a driver policy that includes recharging for excess damage over and above fair wear and tear. Employees should not expect to have a car if they simply mistreat them without facing a penalty.
7) Carry out inspections: Again this applies to businesses. Company cars should be checked and if a car is found to have been abused by the driver any re-training can be carried out sooner rather than later after a poorly treated car has been returned.
8) Take photographic evidence: Something I have been recommending for years and has saved my clients thousands of pounds. Remember to take photos with a non-digital camera to avoid any accusations of doctoring photos.
9) Carry out repairs: It is much cheaper to have cars repaired before they are returned. Some smart repairers are now accredited but beware of sub-standard work, you may end up being charged again for work that isn’t considered particularly good.
10) Negotiate: Never ever simply accept end of contract charges, always challenge them as a matter of course. Even if you feel they are justified, still argue, you can possibly get your charges reduced.
By Graham Hill
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