The average end-of-contract charges for vans increased by 12% over the past 12 months, from £376 to £420, according to the latest data from the Fleet News 50. Nearly half of all vans attracted these charges, up from 44% in 2018.
The hike in charges is at the highest level since Fleet News started to record data for vans back in 2015.
Meanwhile, the average damage waiver has fallen from £168 in 2018 to £134 last year. This tallies with the increase in vehicles being charged, as the threshold for waiving damage charges has been reduced by 20.2%.
As leasing companies come under pressure on margins and profits, they may be less willing, or able, to offer goodwill gestures or to write-off costs, the article stated.
Trucks showed a similar picture to vans. The average charge was £725, 18% up on 2018. The Commercial Fleet article explained that HGVs cost more to run and maintain so the overall end-of-contract figures will be higher compared with cars or vans. The average damage waiver for trucks was £150 compared with £258 last year.
The BVRLA updated its Fair Wear & Tear Guide last April 2019 to clarify how end-of-contract charges can be avoided or at least minimised, and to make sure the rules around EOC are clear and transparent for fleet managers and drivers.
However, noting that the increase for vans was higher than she would have expected, the Chairman of the fleet operators’ association ACFO, Caroline Sandall, told Commercial Fleet that “as we haven’t had a full year from the new guidelines in April, they may not have been adopted across the FN50. The guidelines aren’t mandatory either, so it might be that some leasing companies haven’t adopted them at all. We have been pushing for the BVRLA to make the guidelines on EOC mandatory or incorporate them into their code of conduct.”
She added: “Nobody wants to return to the days when EOCs were used by some as a profit centre. The leasing market is under pressure right now so I hope that isn’t driving some leasing companies to look at EOC as a way to make profit back.”
She also advised fleets to keep an eye on their processes and do everything they can to limit damage in the first place, such as reviewing damage before the van reaches the end of contract to see whether it falls outside EOC guidelines or whether it may be more appropriate for the damage to be repaired by a repairer, weighing up which will be more cost-effective.