New approaches to SMR needed due to rise of personal contract hire, says Epyx
New approaches to service, maintenance and repair (SMR) will
be needed as personal contract hire (PCH) increasingly makes an impact in
corporate circles, according to Epyx.
Tim Meadows, commercial director, said that typically 80% of
cars on traditional corporate contract hire were leased with inclusive
maintenance packages but that the figure fell to around 20% for PCH.
He explained: “Fleet leasing companies are selling
increasing amounts of PCH in a corporate environment, either to individuals or
as part of affinity schemes linked to employers.
“It’s a market that is set for major growth over the next
few years and, largely, an incremental one that is sold alongside traditional
contract hire solutions to non-core company car drivers.
“However, unlike the contract hire that makes up the
majority of business for major lessors, only a minority of PCH deals are sold
with maintenance included.
“This creates a whole series of issues. For the leasing
company, this means they don’t know whether a vehicle is being regularly
serviced to manufacturer standards, which will inevitably affect values when it
comes to remarketing. It makes them uncomfortable.
“Also, for the employer whose employee is using the vehicle
on business, it is much less easy to find out whether the car is being
maintained to standards in line with their duty of care obligations. Again,
this is something that creates a great deal of angst.”
Mr Meadows said that Epyx had been involved in the
development of a number of new maintenance packages through its 1link Service
Network platform that was designed to close that gap and he expected to see
more emerge in the near future.
He said: “Some leasing companies have developed what you
might call ‘just add fuel’ packages that include maintenance and are priced to
appeal to PCH customers. These should help to drive penetration.
“Also, there are likely to be further developments in
service plan-style products, with solutions aimed directly at the PCH sector,
and we have also been involved with discussions in this area.
“However, we also believe there will be further product
innovation when it comes to service and maintenance over the next few years. It
is in no-one’s interest to have PCH vehicles being used on fleet business where
the service record is haphazard or cannot be tracked.
companies and employers will be doing everything they can to promote these
products to PCH buyers and Epyx is very much part of that conversation.”