May 09 - News from the business vehicle experts

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Fleets face overcharging for service work.

Fleets are being advised to protect themselves against service centres that overcharge.

With it becoming more common for company vehicles’ lives to be extended to four or even five years, the opportunity for unscrupulous service and maintenance centres to take advantage increases.

Most manufacturers’ warranties expire after three years and maintenance becomes more of an issue as a vehicle ages.

Many fleet managers feel they can protect themselves by specifying a maintenance-inclusive contract – according to the BVRLA 90% of leased fleets do.

The BVRLA said its members can offer advantages of scale by negotiating on behalf of fleets.

“Because of the scale of their operations, our members are able to agree very competitive prices on maintenance and repair work,” said Jay Parmar, BVRLA head of legal services.

“Garages know that they also employ technical experts who have the knowledge and expertise to approve invoices and highlight anything that looks questionable.”

The Fleet Confidence Survey

However, according to an exclusive Fleet News survey, over 40% of fleets that currently have service-inclusive contracts are now considering dropping this option.

When asked whether they would consider taking the service element out of their contract hire agreement, 41% said ‘yes’.

There is a feeling among those surveyed suggesting that lease companies are also overcharging for maintenance and servicing inclusive contracts.

Colin Kemshead, operations manager at Foundation Piling, said opting out of a service-inclusive contract is “a great way of saving money, if you know what you are doing”.

Graham Hine transport manager at the University of Warwick added: “Why pay up front for something you don't need for a while?

"With variable servicing and extended manufacturer warranties, why pay over the odds for service costs especially when every penny saving is being squeezed out of transport costs!”

This suggests that fleet managers are questioning the value of the services offered by their lease provider and are deciding that it is better for them to take their chances and manage service and maintenance costs themselves.

But it may be a case of out of the frying pan into the fire.

"With a lot of garages you've got to be very careful when reading the bills."

"A lot of garages replace things that don't need replacing,” warned Rob Paddock, distribution and logistics manager at the Commercial Group.

“I'm a vehicle specialist so I've got knowledge of what needs replacing and what doesn't."

This is a view shared by Stuart King, quality manager at PRP Optoelectronics.

“They have to be watched like hawk, consumables are a favourite add-on, also washer fluid,” he said.

“I always fill before going in for service just to check their trustworthiness.

"Automatically it seems they charge you for fluid - just minor item of trust but an indicator!”

Striking a balance

While difficulties with service centres are being identified by fleet managers, they must also ensure any damaged vehicles on their fleets are repaired to their pre-crash condition.

With pressure on costs, it is often financially wise to use independent centres for repairs as well as servicing.

Until recently there were few guarantees that such centres have the equipment or the skills to repair today’s highly technical vehicles.

And these centres are under intense pressure - for the third year in a row they are reporting a drop in volumes of work.

This could tempt them to overcharge, putting additional strain on fleet managers.

“We self-insure and most of our damage is own fault,” explains Gary Black, group fleet manager, Inspired Gaming Group.

“So any damage we pay for.”

But with bodyshops using estimating software that, according to Black, often includes recommending replacing parts that do not need replacing, fleet managers have raise question.

“I am not suggesting vehicles go out with damaged parts not replaced,” said Black.

“I haggle but it is very difficult if they say something needs replacing.”

Black, who manages a fleet of 500 cars and vans, said managers need to keep a close eye on bills.

“I see and sign off every invoice, I also talk to the garage about every job,” he said.

“But there are a lot of companies that don’t have that luxury and I imagine they are getting fleeced left, right and centre.”

Fleet managers have been thrown a lifeline with the BSI and Thatcham-developed PAS 125 certificate.

The independent certificate guarantees that repairs carried out at approved centres are to the manufacturer’s original standards.

The scheme has also now been extended to cover servicing.

Why not talk to Fleetdrive about our pay as you go maintenance and accident management services. Call us on 0800 1971297.

Fleetdrive seminar gains momentum.

On 30th of June Fleetdrive are holding the latest of their popular seminars to help you to uncover savings in your business. We have already confirmed a greater number of companies than before wit 6 weeks to go. Those attending include GEODIS , BIFFA and local windows specialist Hazlemere windows.

On the day find out how your business can

Pay less tax due to new CO2 based capital allowances

Save money on Van costs

Save 10% on insurance and have safer drivers

Save 10% on fuel with better vehicle choice

There will also be ample opportunity to find answers to your specific enquiries with our panel of experts from Wayside Audi, Lloyds TSB Autolease and RAC Risk Management .

If you can make it please click on the banner below to complete your registration or call Bella Campbell on 0800 1971297. If you are unable to make it then please do not hesitate to contact us for a FREE consultation and written review of your vehicle operations.

New E class Coupe a Fleet favourite?

Taking over from the considerably more effete-looking CLK, the E-Class Coupé takes Mercedes-Benz’s offering up a notch, witnessed by its E designation and design cues, rather than references to the smaller C-Class that the old car had.

As a result, it feels more like a cut-price CL or airier CLS.

Mercedes-Benz expects that at least 40% of all the Coupés sold will go to fleets, although in reality that figure will be much higher once small fleets and business money purchases are taken into consideration.

Quite how many will be sold is open to guesses in these days of liquidity ambiguity.

Last year, Mercedes-Benz managed to register just over 2,000 CLKs, while the newer and cheaper BMW 3 Series Coupé and Audi A5 racked up 11,000 and 7,800 units respectively.

As a new model launched in more straitened financial times with overall UK sales set to drop to around 1.6 million units this year, the E-Class Coupé might well double last year’s figures but not much more, which would be a respectable performance and will mean that residual values are very strong in three years’ time (CAP puts the E350 CDI SE at 46%).

And that should make it a very attractive car to lease, aided by the fact that Mercedes-Benz in the UK has been as aggressive with the price as the German designers have been with the looks.

On-the-road prices start at £33,282 for the models that go on sale initially in June, the cheapest being the 350 CDI BlueEfficiency SE diesel, as well as 350 CGI BlueEfficiency and E500 V8.

They will be joined in August by 250 CDI and 250 CGI four-cylinder turboed models, which will be of particular interest to fleets because of low emissions.

The 250 CDI diesel offers 204bhp, CO2 emissions of 139g/km and economy of 53.3mpg.

In all, average prices for the Coupé have been reduced by around 5% – making the cars cheaper than in most other markets – while specs have been increased, with the confusing Avantgarde, Elegance and Sport lines dropped in the UK in favour of a more obvious SE and Sport format so they compare easily with the competition.

So why the special dispensation in the UK?

Sales director Simon Oldfield says it’s because of the unique market conditions for coupés.

“The UK is such a strong market for coupés compared to the rest of Europe that we are able to structure pricing that is much more competitive, because it is justified with the return in volume we will get,” he says.

All standard SE models come with leather as standard, as well as heated front seats, climate control, Bluetooth interface and parking sensors, while Sport versions, costing £1,995 more, get AMG bodystyling, LED running lights, sports suspension, intelligent lighting system and bigger alloys.

The interior of the E-Class Coupé is beautifully done and reeks of quality, although the rear seats still don’t offer a great deal in the way of comfort.

The driver has a massive steering wheel to cling on to.

It seems a little incongruous with the car’s sporting pretensions, which are only realised when in sports mode, with the suspension tautened to maximum attack.

Even then, it still feels like a big, wide car, which is no bad thing.