19 August 2015

Activa puts fleets first in delivering a solution to often contentious end-of-contract damage charges

Activa is tackling the often contentious end-of-contract damage charges on company cars and vans by going the extra mile to satisfy customers that any costs are fully justified and fair and reasonable in view of the age and mileage of the vehicle.

At Activa, we work proactively with fleet managers to avoid and minimise de-fleet charges in the first place, and when damage is incurred we adopt a careful, fair and open policy that ensures that conflict is avoided.

At a recent ACFO seminar attended by Activa, end-of-contract vehicle damage charges were highlighted as the ‘cause of the biggest degree of conflict’ between fleets and leasing companies. At the event there was also a call to action for ACFO, the leading UK representative body for fleet decision-makers, to work with the British Vehicle Rental and Leasing Association (BVRLA) to achieve greater consistency in the application of damage charges when company cars and vans were de-fleeted.

Activa de-fleets thousands of company cars and vans annually and Martin Hughes, our remarketing manager, said: “Yes, we do need recourse to our customer where damage causes a reduction in resale value, but we are more understanding of our customers’ perspective than many other leasing companies are and the policies and processes that we adopt in dealing with refurbishment costs ensure that we simply do not get into disputes in this area.”

He highlighted several key steps in Activa Contract’s procedures that illustrates our empathic approach:

• Within 48 hours of collection by Activa’s logistics operation, all of our vehicles are fully inspected in a controlled environment by qualified, independent vehicle appraisal experts to ensure a consistency of standards.
• The appraisal details are then uploaded by our remarketing team who carefully separate those items that are regarded as fair wear and tear and those that are not. They use their extensive knowledge of the used vehicle market to ensure that the age, mileage and type of vehicle are properly taken into account - so a scratch on a two-year-old, 20,000-mile executive car will be viewed differently than a similar scratch on a five-year-old 150,000-mile van.
• The customer is advised promptly of the ‘filtered’ appraisal findings for every single vehicle - even where it shows zero damage. Where damage is identified, all items are shown, but they are segregated between chargeable and non-chargeable lines, with digital images and detailed costs being provided for the latter where applicable.
• It is what happens next that sets Activa apart. Where chargeable items are shown on the appraisal, the vehicle is not moved, repaired or sold and no invoice raised for damage until the full agreement of our customer is obtained for the proposed charges.
• And, in the unlikely event of a difference of opinion remaining between Activa and our client, a member of the Activa remarketing team will return with the vehicle to the customer to agree a mutually acceptable resolution.

Martin also said: “Well over a third of all vehicles returned to Activa incur no charges whatsoever, but where damage does exist, the majority of our customers take the option to return the vehicle without prior refurbishment work being undertaken in the knowledge of our fair and open approach to recharges.

“We do not seek to make money out of our recharges - we simply need to recover the impact that the damage has on the resale value. We believe that our end-of-contract recharge levels are amongst the lowest in the industry and our reward for this comes from high levels of customer satisfaction and retention.”

One of the most common end-of-contract damage recharges levied by us is in respect of bumper damage to the four corners of a vehicle and for this reason, our customers are encouraged to specify parking sensors where these are an option as they can effectively become self-financing.

Other avoidable charges we would like to highlight are for windscreens, whereby unrepaired eye-line chip and cracks de-laminate and lead to the need for replacement and alloy wheel scuffs that result from ultra-low profile tyres being specified.

Martin concluded: “We consider our approach to end-of-contract damage recharges to be a part of our customer relationship building process. Whilst we do need to be able to recover the impact of damage on the resale values of our vehicles caused by unfair wear and tear, we do not seek to profit from customer recharges.”