Running a fleet of leased cars

Many firms lease their cars rather than buy them.

The lease fixes the monthly price. The work of looking after the drivers and the cars still sits with the business. These notes cover the contract, the people who drive, the cars themselves and the day they go back.

What the contract sets

The British Vehicle Rental and Leasing Association (BVRLA) is the trade body for leasing firms. It says lease contracts usually run from 12 to 48 months. Shorter contracts let you change cars more often. Longer ones generally mean cheaper monthly payments.

A fully maintained contract adds servicing, replacement tyres and other worn parts for a fixed monthly cost. On a self-maintained contract, anything not covered by the maker's warranty is yours to pay for.

Mileage, servicing and the MOT

The monthly price is worked out from an expected mileage. Cars that go over it are charged for the extra miles, at a rate per mile shown in the contract.

Cars still need servicing on the maker's schedule. If a service is missed and a fault appears, the warranty may not cover it. A car needs its first MOT by the third anniversary of its registration, so a four-year lease includes one.

The business stays responsible for insuring each car. If a car is written off, the insurer's payment may not cover what is still owed under the lease.

Checking the drivers

Health and safety law applies to driving for work in the same way as it does on a fixed site. The Health and Safety Executive (HSE) says employers should assess the journey, the driver and the vehicle. The same law covers grey fleet cars, which workers own and drive for work, including cars run on a cash allowance.

A driver can make a check code on GOV.UK to share their licence record. The employer uses it with the last 8 characters of the licence number. Each code lasts 21 days and works once. Getting someone's licence details without their permission is a criminal offence.

Phones and distraction

HSE advises a clear written policy on phones. Workers should not pick up a phone or make video calls while driving. Hands-free use should be kept to a minimum.

A driver who holds and uses a phone at the wheel can get 6 penalty points and a £200 fine. Drivers who passed their test in the last 2 years lose their licence.

Keeping the cars safe

HSE asks employers to make sure drivers carry out and record daily checks. There should be a simple way to report defects, and a clear rule that unsafe cars are not driven. Maintenance should follow the maker's recommendations. HSE points out that an MOT only covers basic defects.

Drivers of electric and hybrid cars should know what to do after a crash, including the fire risk from a damaged battery. Where a death on the road comes from serious management failures, a firm can be prosecuted for corporate manslaughter.

When the cars go back

At the end of the lease, each car is inspected. Fair wear and tear from normal use is not charged for. Damage from a specific event, like an impact or harsh treatment, can be.

The BVRLA suggests checking each car 10 to 12 weeks before it is due back. Do it in good daylight, after a wash, so there is time to fix anything outside the standard. It also recommends being there when the car is collected.

If you dispute a damage charge with a BVRLA member, you can pay for an independent engineer to look at the evidence. If the engineer finds in your favour, the member refunds the reasonable cost.