Fleets should review vehicle contracts now, says FleetCheck
FleetCheck is warning fleets to review their vehicle lease contracts in light of the coronavirus pandemic leading to less travel and a lack of new car availability.
The world of business travel as we knew it no longer exists, says Peter Golding, managing director at FleetCheck. The pandemic has caused a wide range of potentially dramatic changes that are key leasing variables, which mean fleets need to review their leasing contracts as most won’t be suitable for the present time and foreseeable future.
Peter Golding said, “We’ve seen a whole slew of changes in a short period of time. The rise of video-conferencing means the likelihood of much reduced mileage for many drivers while there will also be, in many organisations, sadly, the need to make redundancies.
“What all of this this means is that the mileage and year cycles in your current leases are potentially, even probably, no longer appropriate. Fleets need to work out what will be needed in the future and talk to their leasing providers about making changes.”
Peter said that a wide range of solutions could be adopted in order to adapt current leasing arrangements and make them more appropriate for the new normal.
“Leasing companies are being pretty flexible in the current circumstances and it is worth spending some time talking to them about all of the different potential avenues that you could follow.
“For example, rather than just handing back a car that was driven by someone who has lost their job and paying any penalties that are due, you might be able to swap around your fleet allocations and find ways of reducing your liabilities.
“Generally, it is in the interests of leasing companies to help, although we are hearing some stories of issues to do with handing end-of-contract vehicles back during lockdown, when collection was difficult. For example, some fleets continued to use those cars and vans while others missed scheduled services, meaning they could be liable for penalities.”
In addition, following car makers’ closure of factories during lockdown, as well as increased difficulties in import/export and reduced shipping, short- and even medium-term availability of new cars and vans is likely to be poor, and consequently fleets may need to extend leasing contracts.
Peter also suggested that fleets should consider conducting a total review of fleet policies. “The coronavirus crisis has had a wide-ranging impact and there are many issues to be considered,” he commented.