Contract extensions became run-of-the-mill when the pandemic took hold in March. First, they were more or less enforced, as the logistical side of the industry - along with anything else not marked essential - shut down. In addition to those lingering difficulties, many fleets eked out contracts as a money-saving measure, which added to the already substantial pile of vehicles running beyond their original lease terms. 

From an operator's perspective, it is a quick fix. The employee still has transport, the lease rate should not get any higher, and there is no commitment to a long-term contract. However, this would not be the first time we have pointed out the potential ill effects of extensions, primarily on cost grounds. According to Epyx, the three-year point - just when the first MOT is due and many a manufacturer's warranty dries up - is about the time things start to get expensive. 

"It seems like an obvious gain to defer replacing vehicles because it looks as though you are saving money when budgets are under pressure," says the company's commercial director, Debbie Fox. "However, the truth can be different. If you examine the cost of SMR over time, it tends to rise quite quickly as the vehicle ages. you may find that you will have to buy a complete set of tyres or pass the point at which a major scheduled service is due. For some vehicles there may even be relatively expensive one-off costs such as the replacement of a timing chain."

This does not exactly bode well when they finally reach the defleet stage. Factor in the allegedly large number of company cars "sat on people's driveways for months", as the AFP's deputy chair Stewart Lightbody suggests, and the industry appears to be facing a glut of older vehicles in less than perfect shape. 

"We've had challenges from the start of lockdown where people wanted to hand [cars] back because they'd got no use for them - but no one was in a position to come and get them," says Lightbody. "[The leasing company] then comes to get it four months later, it doesn't start, the driver's had to park it on the road, and people have been hitting it."

Activa Contracts has seen a greater number of fleets returning vehicles early than it has extensions. The firm told Business Car a number of its customers had reduced the size of their fleets to save money, rather than keeping vehicles for longer. Given the territory we are wading into, the maths might well stack up in favour of such an approach, even if it involves swallowing early termination charges. 

However, remarketing manager Martin Hughes says there has also been an increase in vehicles returned without refurbishments: "We have a number of customers that like to have their vehicles refurbished so they're not subject to any end-of-contract charges. We prefer it because, as soon as we get the car back, we can move it on. but some of those customers are just sending the cars back as they are, and we've had to charge damage to them where, in the past, we possibly wouldn't have." 

This, he says, is less down to a reluctance to pay for repair work; rather, it's the huge backlog at body shops, much of which is down to furloughed staff. "They are simply saying there isn't the body shop capacity to deal with the number of cars that are going through. 

"To give you an example, we've got, I think, 30,000 MOT slots available to us in September throughout our network, but we know that 65,000 MOTs need to be carried out. The demand is absolutely out there but there isn't the commercial availability." 

These end-of-contract hurdles are not going anywhere for the time being and, assuming fleets want to avoid an increase in expensive charges - which are usually near the top of their list of biggest gripes - it will pay to think a bit smarter not only about how long you keep your vehicles, but also what you do before you send them back.    

BCA's COO Stuart Pearson is a fan of so-called upstream remarketing: early inspections ahead of the collection date to catch costly condition issues before they turn into a bill. "There is a range of benefits from moving the inspection process upstream, and mid-term inspections allow asset owners to put in hand any necessary remedial work well in advance of any remarketing activity.