Our recent guide for businesses and individuals who are leasing cars, covered how to avoid common pitfalls at the end of your contract, but it’s clear that one area needs a closer look: end-of-contract charges.
Also known as de-hire charges, fair wear and tear charges or, simply, damage charges, they all mean the same and are the biggest source of dispute between leasing companies and their customers.
Whether you’ve leased your car as an individual like me, use a salary sacrifice car scheme through your work, or are a business vehicle manager, the last thing anyone needs is to take a hit in the pocket you hadn’t budgeted for – but the reality is that knocking on for half of us will.
A survey at the end of last year found that the number of cars on the receiving end of damage charges by leasing companies stands at 39%, an increase of 2% on the previous 12 months. The average charge is now £322, compared to £280 in 2015, and it seems likely the figure will creep up again in 2019.
It’s a slightly different story for vans, which incur an average charge of £376, which is actually less in than 2015, though the proportion being penalised stands at 44%.
Whichever vehicle we’re talking about, the obvious question is why are these percentages so high? I hear claims about unscrupulous leasing companies, despite the British Vehicle Rental & Leasing Association’s fair wear and tear guidance, taking advantage of the potential grey areas and applying unjustified charges. (Thankfully at WHF we choose to work only with leasing companies who share our ‘customer-first’ values.)
And there are counter arguments saying that drivers aren’t maintaining their vehicles properly or are failing to appreciate the requirements (as leasing’s popularity increases, it’s easy to see how people new to the scene might get caught out), or that fleet managers aren’t giving an accurate description of the intended usage of vehicles at the outset.
Whatever the reasons, the inescapable truth is that drivers have a responsibility to understand completely what the contract requirements are when leasing. Read the small print and, if in doubt, ask questions. Likewise, business fleet managers need to communicate these effectively to their colleagues to make sure they suitably educated. The additional effort will be worth it.
Leasing a vehicle has many advantages. Drop us a line or call us on 01925 713 212 for an informal chat about any questions or issues you have.