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Leasing firms 'missing a trick' with winter tyres

Date: 27 August 2013   |   Author: Jack Carfrae

The leasing industry is missing out on business by failing to offer fleet operators an easy winter tyre package as part of their contract hire service. At present, the majority of leasing companies do not offer their clients the option of a fixed-cost bundle to add a set of winter tyres to a vehicle during its lease.

As a result, the process of ordering, fitting, storing and refitting winter and summer tyres is costly, labour intensive and makes budgeting difficult for fleet operators.

Tristan Campbell, fleet advisor for Chivas Brothers and secretary for ACFO's Scottish region, told BusinessCar: "It can be hard to arrange for winters because none of the leasing companies have really come up with an easy solution.

"Sorting out a winter tyre package adds a lot of time, cost and complication. With contract hire, what's important to fleets is that everything is budgeted for. If I decide to fit winter tyres six months down the line then there might not be budget for that.

"If there was a button to press so you could say five or six months of the year you got them added as a fixed-cost, built in to your monthly rental, that would be so easy."

He continued: "The closest thing I've found to that is just ordering them from the off. But that's not ideal because then they're fitted all year round and they're not as efficient or as environmentally friendly."

Such a service does exist but it is not widely adopted within the industry. Leasing firm Ogilvie Fleet, for example, offers a package whereby the cost of winter tyres is integrated into a vehicle's maintenance contract hire rate or can be paid up front.

Jay Parmar, legal and policy director at the BVRLA, claimed that cost was deterring businesses: "Winter tyres are not a legal requirement in the UK, and under cost-conscious times there has not been a surge in demand for winter tyres.

"This may change if they became mandatory or if we experience regular harsh winters."

Kwik-Fit Fleet boss, Peter Lambert, explained why the process is generally difficult: "You can't just do a quote and add five or 10% - you almost have to do a bespoke quote because it varies so much.

"You have to do a calculation to determine how many winter tyres and summer tyres you need. If a contract is for 60,000 miles then it might go up to 65,000 miles, and you might need another two tyres, so it doesn't make it possible to do a linear calculation.

"The leasing industry in the UK hasn't included it because they don't want to dissuade customers from having [a winter tyre] conversation. The total cost could be around £600 per car, per year, just to change the tyres."