Latest generation fleet software can play a key role in helping fleet operators keep spiraling end-of-contract and excess mileage charges from leasing companies under control. So says software solutions specialist Mycompanyfleet, the automotive division of HR solutions provider, NorthgateArinso.
Driven by the recession and a need to optimise resale values to maintain margins, many leasing companies have become stricter on charging for damage and excess mileage at the end of contracts as they look to make every penny possible out of each deal.
Many are tasking a tougher stance over end-of-contract damage to vehicles and a willingness to charge for things they may have let go in previous times.
But, says Mycompanyfleet business manager Andrew Leech, modern software systems allow fleet managers to build up an audit trail for every vehicle on their fleet, which provides the ammunition to counter any claims for end-of-contract charges that leasing companies may make.
“We are hearing repeated tales from our fleet customers that end-of-contract charges are continuing to rise, and often for work that either does not need to be carried out or for which they would not have been charges in the past.
“Systems like our own FleetAcumen allow fleet managers to build up a complete profile of each vehicle, to record every transaction and incident that occurs with each one, to show that service schedules have been followed to the letter, and compile a complete audit trail,” he said.
Fleet Acumen also provides a standard interface that communicates with invehicle technology and industry tracking systems to receive real time mileage updates, keeping mileage records accurate and up to date.. And exception reporting methodology within the system alerts the fleet manager whenever a vehicle is about to over-run its contracted mileage so that immediate action can be taken.
“Should there be an end-of-contract or excess mileage charge from the leasing company for a particular vehicle that the fleet manager does not agree with, the records are there to prove that the charges are unsubstantiated,” added Andrew Leech.
By keeping up to date, automated records in this way, the fleet manager can also build up a picture of each supplying leasing company that the company uses and pinpoint the most cost-effective and those most likely to charge excessive sums.
The trend for ever-rising end-of-contract was noted in last year’s FN50 survey of the UK’s top 50 leasing companies, which showed that fleet customers were paying out in excess of £110m per annum in end of contract costs for vehicle damage and excess mileage.
The average recharge for damage on returned vehicles was a record £246 per vehicle according to the survey, which also shows that some 39% of vehicles suffer a recharge for wear and tear – another record.
In addition, the survey also reported that fleet managers were failing to monitor contract mileages effectively, with the result that their companies were forking out millions in excess mileage charges each year.
Excess mileage charges last year jumped to an average of £534 per vehicle from £424 the previous year, the highest since the survey began.
“We fully expect this year’s figures to continue this trend, but we firmly believe that, with the current generation of modern fleet management software systems at their disposal, fleet managers are well placed to withstand this inflationary pressure from leasing companies,” added Andrew Leech.
