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Fair wear and tear – reducing End of Contract charges

By 8th January 2021No Comments

End of Contract charges for unfair wear and tear can sneak up on many fleets, adding additional costs to pre-existing lease or hire-purchase contracts. Over the past five years, these charges have risen 12% to an average of £324 (not including salary sacrifice cars)1, with the biggest leasing companies in the UK charging even more.

So how can fleet managers and drivers help to reduce these costs? Afterall, damage waivers are also on the rise and may no longer offer a cost-effective solution for both small and large fleets alike1. Below are some of our top tips:

Follow the BVRLA guide

  • The Fair Wear and Tear guide from the BVRLA provides an industry-wide definition of acceptable wear and tear, which most rental and leasing companies in the UK adhere to. The guide offers information to drivers and fleet managers on which charges are considered fair wear and tear, as well as what to expect on defleet day, making it a vital resource for understanding how and when charges may be incurred.

Perform vehicle appraisals

  • Carrying out a vehicle appraisal 10-12 weeks before the vehicle is due for return will allow for enough time to have any issues rectified before inspection. A thorough vehicle audit should cover all areas mentioned in the BVRLA guide and, as it is likely to be checked against the same criteria, fixing or at least identifying issues that fall outside acceptable wear and tear will help to keep unexpected costs to a minimum.

Invest in on-road training

  • For many fleets, consistent wear and tear charges can be reduced using on-road training. By getting behind the wheel with drivers, professional fleet trainers can help improve the safety and efficiency of a fleet by working on key areas of business driving including vehicle risk assessments and enhanced driver behaviours. In turn, these newly developed skills can help drivers to better look after their vehicles when driving for work and from a routine maintenance perspective. Click here to find out more about our comprehensive on-road training.

Invest in online training

  • Similarly, online driver training can help to develop specific driver skills such as low-speed driving and tight-space manoeuvring. By choosing e-learning modules that are relevant to your business, drivers can develop skills remotely that will help them to reduce wear and tear charges and improve their overall safety.

Outline expectations in a robust fleet policy

  • Some fleets may choose to charge drivers themselves for unreported or missed damage, while others may accept a certain level of wear and tear for each vehicle. Whichever way your fleet operates, it’s important to outline the expectations for routine vehicle checks and maintenance in a robust fleet policy so that neither driver nor manager are caught out. We also recommend covering these five areas in your fleet policy to outline expectations for all at-work drivers.

Check your contract

  • BVRLA members must clearly explain their vehicle return standards and how they expect you to look after a vehicle over the course of the lease. It’s also worth noting which pricing structure the leasing company uses for wear and tear – some may use a fixed-cost menu, while others may use a loss in value at auction to determine the charges. It may seem obvious, but having a clear understanding of these expectations and the pricing structure for wear and tear will put fleet operators in a strong position as they care for the vehicle over the duration of the contract and help them to make informed decisions on repairs.

To find out more about fair wear and tear charges, and how fleet training and risk management can help to reduce them, contact us and we’ll work with you to find a solution that’s right for your business and your drivers.

Peter Williams

Author Peter Williams

Marketing Executive at IAM RoadSmart

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