Long-Term Rentals for Craftsmen (6/6)

The pitfalls to avoid

In general, the car fleet of a craftsman, taking into account the nature of his professional activities, appears to be particularly in demand (significant mileage, occasional damage to the vehicle, etc.). In fact, “the pitfalls of LLD”, which are likely to alter the value of this formula, are most often due to a lack of prior information. The LLD.fr team lists a dozen useful precautions here.

1. Beware of vehicles that consume a high level of CO2
Climate change and environmental degradation are largely attributed to the release of carbon dioxide (CO2) into the air. Of international commitments and Europeans have been taken in order to reduce these emissions. Logically, the implementation of these commitments is aimed at car manufacturers. They committed to reducing emissions to 120g of C02 per kilometer by 2012.

To encourage users of professional vehicles to “drive clean”, new fiscal measures for businesses are now being implemented. Thus, depending on the vehicles chosen and their CO2 emission rate, taxes and duties can vary very substantially. It is important for the company to be aware of these parameters when choosing vehicles, especially since some models in the same category are much less polluting from one brand to another!

The levies concerned are the Tax on Company Vehicles, car registration and non-deductible depreciation.

TVS (Corporate Vehicle Tax)
Thus, the calculation of the Tax on Company Vehicles (TVS), previously calculated according to fiscal power, is now a function of the CO2 emission rate (in grams per kilometer) of the vehicle, as indicated in the table below:
CO2 emission in g/km Cost per g TVTS/year

Carte Grise
In addition, as of July 1, 2006, passenger vehicles (VPs) emitting more than 200 grams of CO2 will be subject to an additional tax, due upon registration. This tax will vary according to the CO2 emission rate:

• €2 per additional gram for vehicles that emit 201 to 250 grams of CO2 per km
• €4 per additional gram for vehicles with more than 250 grams of CO2 per km

Depreciation not deductible
Depreciation related to Long Term Rentals is normally deductible from the taxable income of businesses. This rule is subject to a ceiling of €18,300 per vehicle. In addition, since January 1, 2006, this ceiling has been lowered to €9,900 for vehicles that emit more than 200 grams of CO2 per kilometer.

2. Beware of offers that require you to pay a mileage charge
Attention, to providers who are ready to negotiate on everything to get your contract and who at the end of the contract will align you.
Every rental comes with a contract on the basis of which your rent is fixed, a contract that defines the duration of the commitment and your mileage. Depending on the company, this choice is more or less broad. Opt for an organization that lets you freely choose the duration and mileage you want for the car you want, and not fixed packs. Moreover, only the former also allow you to be able to change your choices during the contract. For example, you can increase your mileage if you change your home and get away from work. Otherwise you will have to pay penalties that can be high.

“We don't have a grid, but nevertheless, we are working to simplify our relationships”, “For example, for each kilometer more or less, we will establish a contract”, “The reimbursement system is therefore perfectly transparent”, “as far as the rehabilitation is concerned, just before the vehicle is handed over for 120,000 km, we will do a balance sheet to avoid surprises”. “A month before, we therefore do a “Visit to review the bodywork, which allows you to have them insured”, “We are looking to set up a relationship of trust”.

3. Attention: to compare offers, do not hesitate to ask for the general rental conditions (GCL)
The explanations and commercial brochures provided during your first contacts with an LLD provider highlight some of the services offered.
However, in order to be able to compare accurately and objectively, the proposals that will be made, it is strongly recommended to refer to the CGL (General Rental Conditions). This is the legal document that will be signed and binding on both parties, which contains the main commercial conditions relating to the rental service offered.

4. Attention to service providers who only work with a small network of garage owners
In case of assistance, maintenance or repair, the user must contact a garage owner who agrees to work with the rental company, in order to avoid any management constraints. It is therefore important that your employees can find a partner garage from your LLD provider wherever it is located.
We therefore advise you to prefer renters who work with a dense network of garages present throughout the country. That is not the case for everyone.

5. Attention to the capacity to manage equipment for each of the service providers
The LLD service offered to you includes the provision of the vehicle but also its maintenance, in particular the management of equipment. Ensure that the services offered meet your expectations.
For example, in terms of tires, a package is offered to you with a defined number of spare tires during your contract. Make sure that you can make the exchange in a center near you. Some rental companies only work with a restricted network while with others you can go and change your tires almost everywhere.
Still in terms of tires, some of your employees will sometimes need “winter” tires. In this case, check that your rental company includes such a service in its pneumatic offer, in particular that the assembly and dismantling of this equipment are included in the package offered.

Can we change the tires wherever we want or should we go to your network?
Do you offer summer/winter tire solutions?
Is tire management globalized or managed car by car?

6. Beware of offers that do not provide you with a replacement vehicle in case your vehicle is immobilized
More than providing a vehicle, LLD is first and foremost a service that must ensure the mobility of your employees at all times.

Thus, in the event of a vehicle being immobilized (failure, maintenance, theft, etc.), your employees must be able to benefit easily, economically and quickly from a replacement vehicle.

To this end, you will be offered by some service providers to subscribe, for a modest fee, to a “Replacement Vehicles” package. In the absence of such a service, in the event of immobilization, it will be necessary to resort to a short-term rental, which is much more expensive.

7. Attention to service providers who do not have a return contract
The vehicle returned at the end of the contract is, of course, used. The normal wear and tear of the vehicle corresponds to a standard state of dilapidated condition. Beyond that, in the event of abnormal wear or unrepaired damage that should have been the subject of a claim repair, the repair costs will be borne by the tenant.

Your LLD provider must therefore provide you with a return contract that precisely defines, in advance, the criteria for a standard condition of use and the repairs that will have to be invoiced to you.

Beware of service providers who do not offer you discount tables with commitments in terms of allowances?

8. Attention should be paid to service providers who, upon return, assess the repair beyond the deductible or the tolerance threshold.
If this amount exceeds the deductible of your insurer or the tolerance threshold set by the lessor, you will have to cover repair costs. In this case, to ensure that the proposed estimate really corresponds to the necessary repairs, you are entitled to request a counter-expertise.

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