REMARKETING: A case of damage limitation
29 January 2015
End-of-contract damages can cause problems when cars are defleeted. Tom Seymour reports on what can be done to ease the pain
End-of-contract charges can sour what was a beautiful relationship between fleet driver, fleet and leasing company, but they don't have to if managed correctly.
Damages and missing equipment at the end of a contract can mean penalty charges for fleets and potential disputes and investigations before vehicles can be remarketed, so it's important fleets are clear what is expected of them at the start of the lease.
It's a problem the largest leasing company in the UK, Lex Autolease, took specific measures to fix late last year, completely rewriting its end-of-contract process to improve customer service.
Lex currently sees 13% of its vehicles returning at the end of a contract generating an invoice dispute regarding damage, which are referred to a dedicated specialist team to investigate and resolve. It's a big problem for a company with a risk fleet of almost 290,000 vehicles.
Lex rolled out iPad-based technology for its vehicle inspectors to take video and photos of any damage found, which is also available for fleets to view. It is designed to increase clarity of process, communication, and consistency for both customers and vehicle inspectors, and was introduced after consultation with drivers and fleet managers.
Lex also simplified its pricing structure around damage types, which is available for customers in advance of their contract expiring. The pricing details all charges by vehicle size and damage type, and Lex believes it helps customers decide whether to undertake repairs on a vehicle before its return.
Invoicing for damage and movement will be automated, and customers can opt in to a series of alerts to be kept informed of each stage of the de-hire process.
Andy Hartley, commercial director at Lex Autolease, says: "The end-of-contract process can seem daunting for customers and it's a contentious area across the whole industry.
"We identified that we could bring about increased consistency and transparency of our processes to improve the customer experience by employing our own vehicle inspectors to assess all vehicles returned at the end of contract, rather than using a mixture of personnel and multiple auction locations."
Hartley hopes the new process will mean fewer surprises for all parties when cars come to the end of their contract.