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ACFO conference delegates were advised on the worth of building end-of-contract damage charges into their monthly lease rates by Alphabet's asset risk manager Jim NcNally.
McNally, who is also chairman of the BVRLA's residual value remarketing committee, said: "What we'd rather do is price a vehicle appropriately given its usage. We can build a pricing strategy around that usage.
"Given that contract hire is all about budgeting your results, then at least talk to your leasing provider. We want to structure a deal that will work for you and us."
McNally cited a former contract with a business that intended to use a fleet of Ford Transit vans for heavy-duty work in quarries, but was up front about the usage, so the resultant damage was built into the monthly lease cost.
He reminded delegates that charges weren't only limited to visible damage on a vehicle: "I'm also including in the definition of damage, missed stamps in service books and missing keys, which can be a significant cost. A master key can be several hundred pounds."
He said that one of the most common complaints from businesses stemmed from faults being identified after vehicles had been collected.
"With vehicle inspections, a driver picking up that vehicle is phase one.
"An auction house inspecting it under bright UV light, and subsequent inspections, which do happen, can throw up further damages."
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