Vehicle Repair And Maintenance Agreement

We went to the market to get some indicative costs for five-year R-M contracts for a representative batch of 10 tractors. Four truck manufacturers and four independent maintenance suppliers kindly provided us with offers, as shown below. If you are considering extending the term of the R-M contract, perhaps because you have also extended the rental period of the vehicle, you should remember that this extension will be excessively expensive. They are now recording the purely higher costs of an older vehicle: they are no longer offset by lower costs in the first few years. The good thing about maintenance contracts is that they offer a monthly fee that you know of and that are (more or less) fixed for the duration of the contract. The price is normally indexed to the RPI (Retail Prices Index), with the contract fee adjusted each year. As a general rule, however, it is possible to choose a truly fixed and inequivalent rate. According to the offers we have received, these should cost between 3.5% and 6% more than a tracking RPI: this is your view on where inflation goes and whether inflation protection is worth the most. According to James Ostridge, head of service contracts at Mercedes-Benz UK, more than 90% of Mercedes` R-M customers choose to protect themselves by setting inflation prices. Prices for the R-M contracts are based on the type of work, the annual distance and the area of operation of the vehicle. It`s up to you to inform the supplier of R-M if they change.

Most likely, the annual distance is at odds with the number of contracts. It is customary to carry out an annual distance check and adjust the fee for the following year. It is advisable to know how fees change if there is a lag. Also check to see if there is a mechanism to group distances across multiple vehicles or if a one-year surplus can be offset by an expected deficit. What matters is what happens at the end of the contract. We have requested the distance surcharges levied for The Hypothetical Haulier`s R-M contract. The R-M fee for the line indicated in the contract is about 5p/km: distance charges of between 5 and 15p/km have been declared. You should also check the level of tolerance, if it exists, before applying this tax. If the actual distance travelled is less than the number indicated in the contract, there may be restrictions on the amount of credit you receive. There are a few additional points that need to be taken into account if you choose an R-M contract from a non-franchised dealer or an independent repairer. Among the R-M offers from most manufacturers, there is, as an additional cost option – the provision of a replacement vehicle if you are travelling more than 24 hours for repairs.