Fleet cars: What is fair wear and tear for a company car?

Leased company cars are usually covered by a fair wear and tear policy, with penalties if vehicles are returned with too much damage. Here's what "fair wear and tear" means in practice.....

A silver coloured car with crash damage to the doors

When it's time to return your fleet vehicle at the end of the lease agreement, it's important to check it over thoroughly to ensure there's no damage that might fall outside the leasing company’s definition of fair wear and tear. Failing to do so can result in hefty charges.

But what exactly does "fair wear and tear" mean? Well, it can be tricky to assess because one person’s definition will likely be very different to another’s.

However, a good way to think of it is that fair wear and tear happens when normal day-to-day use of a vehicle causes natural deterioration. Damage beyond that tends to occur through some sort of impact or act of negligence.

Read more fleet and company car advice

The British Vehicle Rental and Leasing Association (BVRLA) provides an industry-standard guide to wear and tear on a lease vehicle, and most finance companies have their own guides to what's expected when their vehicles are returned.

It's important to check your finance company’s policy when you first take delivery of your vehicle and again before it goes back. Bear in mind that there are usually different wear-and-tear rules depending on whether you’re driving a car or a light commercial vehicle (e.g. a van).

The most common repairs required on fleet cars are:

– Paintwork scratches
– Bodywork dents or chips
– Upholstery or carpets that are ripped or have burns marks
– Wheel damage

How to avoid breaching a fair wear and tear policy

Fail to prepare, prepare to fail, goes the saying. It applies to fleet cars because if you don’t inspect your car well in advance of its return to the leasing company, you could end up with a large bill for repairs.

First and foremost, you need to get a copy of the wear-and-tear guide from the finance company. After that, you should give your car a thorough inspection at least three months before it is due to be returned so you have time to carry out any necessary repairs.

Then it’s a case of gathering together all the sets of keys, including any spares, plus all the paperwork that came with the car when new.

Read more: Fleet car insurance guide

Eight essential checks before you hand back your company car

1. Inspect the car in good light after it's been fully valeted.

2. Check each body panel for scratches or dents. Dents up to 10mm long (no more than two per panel) and scratches up to 25mm are normally acceptable.

3. Inspect every piece of glasswork – windows, door mirrors and lights. Light scratches are usually deemed acceptable as long as they don’t interfere with the driver's line of sight. However, chips, cracks or holes must be fixed (or the glass panel replaced).

4. Look at all the wheels and tyres. Wheels must be free of dents and holes (light scratches on the rims are acceptable) and any spare wheels must be intact. The tyres must have a legal amount of tread on them and be free of bulges, cuts and other damage.

5. Study the upholstery – burns, tears or rips must be fixed, and the interior should be free from odours.

6. If you're lucky enough to have a convertible car as a company vehicle, make sure the folding roof mechanism is working properly. If it isn't, get it fixed.

7. Get the mechanical parts of the vehicle inspected by a mechanic, because the car must be up to MoT standard. Oil leaks, vibrating brakes or noisy exhausts must be repaired.

8. If you run an electric company car make sure it's fully charged before it is collected.

Conclusion – prevention is better than cure

There's one sure-fire way to avoid repair charges at the end of your leasing agreement, and that’s to take good care of the vehicle right from the start.

Keep it clean, and if you kerb a wheel get it fixed. And always make sure parcel shelves, boot nets and straps, charging cables and other accessories are returned with the vehicle.

Read more company cars advice

For all the latest reviews, advice and new car deals, sign up to the What Car? newsletter here

Also consider