Fleets need to review their vehicle lease contracts across the board in the light of the coronavirus pandemic, says FleetCheck.
Peter Golding, managing director at the fleet software specialist, said that the crisis had caused a wide range of potentially quite dramatic changes in key leasing variables.
He said: “Current car and van lease arrangements used by most fleets were essentially created for a world of business travel that no longer exists and is unlikely to return in the same form as existed even just a few months ago.
“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.”
He added that a further point was that the short and even medium-term availability of new cars and vans was likely to be poor over the next few months, so some contracts may need to be extended.
“Production and movement of vehicles has been affected quite badly during the crisis, so getting hold of the cars and vans you want and need might prove to be very difficult. This is especially true of the emerging market for electric vehicles. We’re expecting to see contract extensions on a widespread scale during the remainder of 2020 as a result.”
Peter suggested that fleets should also consider conducting an across the board review of their fleet policies in order to incorporate all of the changes that were now occurring.
“While lease contract changes may present themselves as an immediate problem, the truth is that now is a good time to start looking at your fleet policy in detail. The coronavirus crisis has had a wide-ranging impact and there are many issues to be considered.”