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Contract extensions come in for criticism

By / 7 years ago / Latest News / No Comments

As such, the leasing company is warning about the possible knock-on effects of running fleet vehicles for longer.

Robert Kingdom, head of marketing at Masterlease, said: 'At Masterlease we are aware that businesses will feel that they are making the right decisions for the business, but they need to avoid knee-jerk reactions of money-saving in the short-term if this will cause long-term damage to the company. Short-term gain can result in long-term pain.'

Such "long-term pain" could take the form of employees looking for another job when the economic climate improves, says Masterlease.

Mr Kingdom said: 'On the way out of the recession, as soon as opportunities become available to employees, businesses are in danger of losing their best workers who are tempted by shiny new recruitment packages elsewhere. Whilst businesses care about the bottom line in a recession, workers – while sitting tight in their jobs in the tough times – could ultimately jump ship.'

He also advised fleets to consider the issue of vehicle whole life costs before deciding to extend replacement cycles.

'Maintenance "creep" will be a factor for fleet managers who will have to juggle MOTs and component failures and possible missed meetings as a result – all of which can impact the business, not to mention the wear and tear and tired look of the vehicle.

'Newer vehicles, even if the choice is restricted, will guarantee a more satisfied and loyal workforce, lower fuel costs, lower emissions and the associated lower BIK.'

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