Fleet operators could face a rise in daily rental prices this year as experts warn that insurance costs will increase in response to terror attack pay-outs.
Bob Baillie, commercial director at United Rental Group, told delegates at the British Vehicle Rental and Leasing Association (BVRLA) industry outlook conference, that rising costs, particularly in the insurance sector following last year’s terrorist attacks in the UK when hire vehicles were used as a weapon, were one of the biggest challenges for rental companies.
“The first one on Westminster Bridge, you’re looking at claims costs predicted in excess of £150 million and we as an industry and as the smaller operators, the independents, we have to try to embrace those costs in the insurance and the re-insurance market,” he said.
He pointed out that the rental industry has also had to face last year’s vehicle excise duty (VED) changes, as well as general overheads.
“There is a lot of education we need to do with customers and we need to wake up to perhaps trying to pass on some of those increased costs to our customers – not an easy task,” he said.
The warning comes as FORS, the Fleet Operator Recognition Scheme, launches a new ‘Security and counter terrorism’ online training resource, and new research reveals that 87% of commercial drivers and operators see terrorism as a potential threat to their vehicles.
Martin Wilson, managing director of Thrifty Car and Van Rental, also indicated that rental prices could rise this year.
“The terrorist atrocities in 2017 have had a significant impact on the insurance costs for the rental industry in general,” he said.
“As policies are renewed the liabilities borne by the insurers are being passed on to the rental companies; due to staggered renewals it will be well into 2018 before all rental companies understand the true commercial consequences of these vicious attacks.”
He added: “Fleet insurance is such a substantial part of all rental companies’ operating costs it seems likely that, ultimately, these increased costs will be passed on to the consumer.”
Rental operators are also concerned that insurers may be reluctant to provide quotations in the future.