The clock is ticking for companies involved in mileage correction, according to a recent report. The criminal act of winding back odometers on contract hire cars and vans is costing the rental industry tens of thousands of pounds in agreed contract revenue but, more importantly, for components that are guaranteed a certain amount of miles, this act of ‘clocking’ is not only deceitful to the lease-hire company but could also jeopardise the safety of the driver who hires the van after the clocked vehicle is returned.
One aspect that will interest readers of our blog is that low mileage is an element applicants can incorporate into the enquiry form when applying for cheap van insurance using our facility. Although the temptation may well be to clock the miles to ensure that your have only driven the miles you anticipated when applying for van insurance quotes, if there is a resultant claim against the policy secured against that application and the mileage is found to be fraudulent, that claim may well be negated and the van insurance policy declared null and void.
The act of mileage correction is, at present, an unregulated aspect of motoring in the UK, which the OFT may well try to change, even outlaw, unless there is an absolute stone-wall case for the procedure. There are fifty or so operators who are thought to be offering this service illegally and they now have the Vehicle Remarketing Association fighting the Office of Fair Trading corner against them, too.
Why they remain in business is simple and, rather than vehicle hire companies tackle the real issue, it is easier to whip up public and private support in order to maintain a market value for a service and point the finger in another direction; I’ll explain.
For long-term vehicle hire contracts, and some small ones, too, there is a certain mileage limit within that contract. For instance, if you want to hire a Berlingo van for six months with a twelve thousand mile limit in the lease contract, with the terms stipulated at £0.40/mile for every mile you drive over that amount as chargeable, it would make commercial sense to take the Berlingo to a mileage correction facility who will rewind the clock for you for £0.20/mile. If you have driven three thousand miles over the limit, you are paying the mileage correction facility £600 instead of the van-hire company from who you leased the Berlingo £1,200.
Is it tempting to save £600 for a quick drop off into one of these specialist garages? For businesses or sole traders struggling to keep their operation afloat, you can see why they would be tempted to do so.
The real solution to the problem is to make the excess mileage fee on the lease-hire contract realistically affordable so that it is not worth risking the mileage correction facility step, but that would take away an especially profitable niche for the lease hire company who may incur no costs other than a little further depreciation for the extra mileage.
By lease hire firms reducing the fee, licensed vehicle correction facilities would remain in business without fear of investigation or prosecution, the driver would pay an affordable fee and the lease-hire company should factor in an ascending scale of appropriate depreciation on a fixed fee basis on sensibly priced milestones of driven wear and tear, with components covered either by warranty or van insurance.
There you go, job done, everybody happy. Not too difficult, was it?