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Car dealers warned to ensure PCP customers clear on end-of-contract wear and tear charges or risk losing business

Rupert Pontin

Customers who have bought a car on PCP may find that dealers become stricter about end-of-life recharges as used vehicle values come under increasing pressure, says Glass's.

Rupert Pontin, head of valuations, said that damage to cars was becoming more of an issue as the used market became more exacting about vehicle condition.

Common repairs that will come under greater scrutiny included scuffs on the corners of bumpers, typically £125 plus VAT, and single body panel repairs at £220 plus VAT.

He said: "We have been operating in a market for a number of years where stock has been in short supply.

“That has meant that trade buyers couldn't afford to be too choosy about minor vehicle damage.

"However, this is changing.

“There is more stock around and the choice is growing every day.

“Increasingly, this means that trade buyers can pass over vehicles that are a little untidy.

“This, in turn, puts pressure on those selling vehicles to ensure that recharges are being enforced for PCP customers."

Pontin said that the issue was problematic because PCPs were, after all, designed to increase customer loyalty to the dealer and manufacturer.

"If a customer is hit for a bill running into several hundred pounds when the car is returned, it doesn't exactly generate goodwill."

Pontin added that the situation needed to be managed by the dealer throughout the vehicle's lease period, highlighting the need for drivers to take care.

"It is up to the dealer to explain to the customer exactly what is expected in terms of fair wear and tear.

“Plus, every time they see the vehicle - for servicing or tyres - they should highlight any damage that is likely to incur a cost at the end of the PCP. In this way, customer expectations have been controlled."

Pontin added that the situation did not tend to be as acute for fleet customers because there was a much better idea of what was expected in terms of vehicle condition.

He said: "Fleets have a pretty good idea of what rechargeable damage looks like but private motorists with PCPs are comparatively inexperienced."

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  • markboote1978 - 18/09/2015 10:59

    The remedy is simple. Sell a minor damage insurance policy with every PCP deal! Dealers benefit from additional revenue and profit from an easy to sell add-on. Consumers benefit from something that helps keep their vehicle in pristine condition and at a cost far less than the probable end of contract wear and tear charges. At Smart Insurance we have a 90% approval rate on claims, so the policies are being used – to everyone’s benefit. So; dealer profit, clean cars, happy customers.