Fair Wear& Tear Guide
Contents
What is Fair Wear & Tear 2
Responsibilty 2

The AUSTRALIANFLEETINDUSTRYLESSORS ASSOCIATIONASSOCIATION Limited(AFLA)(AFIA)
AUSTRALIAN
FINANCE
is theLeasing
association
the fleetleasing industry in Australia.
Fleet
and ofRentalDivision.
ABN
ABN 13
78000
059493998907
533
L11
PittStreet,Sydney
2000
GPO130Box
1595,Sydney
NSW
2001
Phone:
Phone: (02)(02) 9231
9232 5877
1238

Vehicle General 3
Vehicle Exterior 3
Vehicle Interior 4
Vehicle Underside 4
Mechanical Condition 5
The Road Forward 5
Guide Summary 6

This Guide is published for the information of Association Members and Fleet lessees in Australia, as a statement of the interpretation of “Fair Wear& Tear” in motor vehicle leasing arrangements. The parties may agree to be bound by this Guide, unless other arrangements are made. Nothing inThis Guide is published for the information of Members of the Australia Finance Industry Association (AFIA) Fleet Leasing & Rental Division (formerly Australian Fleet Lessors
this AFLA)
Guideandis intendedto limitcustomers
the rightinofAustralia,
any party
leasing ofarrangements
to ofadapt,
modifyTear”
or varytheirvehicle
responsibilities
or rights inrespect
Fair,
Association
their fleet lessee
as atostatement
the interpretation“Fair Wear&in motor
leasing arrangements.
Theparties ofmayagree
to be bound
Guide,
unless other arrangements
made.
NothingAssociation,in this Guide Inc.
is intended
Wearby&thisTearby agreement.
© Australianare
Fleet
Lessors2005 to limit the right of any party to leasing arrangements to adapt, modify or vary their
responsibilities or rights in respect of Fair,Wear & Tear by agreement. © AFIA (2017). Non-Members are not permitted to use or refer to this Code without the express consent of AFIA.
For further details please contact AFIA 02 9231 5877 or info@afia.asn.au

Fair Wear
& Tear...
What is it?

Taking into account a vehicle’s age and mileage and covering
overall condition, from the mechanics and the electrics throughto the bodywork and the upholstery, fair wear and tearsummarises the degree of deterioration judged to be reasonable
at the end of a contract period.
Lack of attention to preventative measures, misuse or neglect
are the main reasons fleet vehicles suffer from excessive wearand tear.
Fleet operators can expect to incur refurbishment charges fromleasing companies if a vehicle is returned with an unreasonablelevel of wear and tear at the end of a contract period.

The main causesof unreasonable wear
and tear in a fleet
vehicles are:✗ lack of regular checks

by the vehicle user and/or

fleet operator, leading to

Where the buck starts - and stops
Some amount of wear and tear damage may occur through normal, everyday business
use, especially for high mileage fleet vehicles. After a typical fleet lifespan of three years or
100,000 kilometres, for example stone chips and minor abrasion to a vehicle’s paint work
would be deemed fair wear and tear for its age and would not adversely affect thedisposal price. If the stone chip damage had exposed the base metal, however, andfailure to touch it up had caused penetrating rust to set in, the deterioration would not beacceptable as fair wear and tear.
The main question then becomes one of responsibility - where the buck starts and stops.

faults and damage going
undetected and unrepaired;✗ not adhering to thevehicle manufacturer’s

Taking Responsibility
Responsibility for the monitoring, maintenance and repair of company vehicles will varyfrom fleet to fleet. The following procedures are recommended to help ensure all thebases are covered:

recommended maintenanceand servicing schedule;✗ drivers not taking
responsibility for the day to
day care and maintenance

Fleet Operator’s Responsibility• fleet operators (ie, lessees) should ensure maintenance and servicing of the vehicle
follows the manufacturer’s recommended schedule, using only lessor approved
servicing agents and approved quality service parts;•regular spot checks, possibly related to distance travelled and use, should be carriedout by the fleet operator to ensure any current problems with care or driver are
identified at an early stage;•ensure that a thoroughly completed service book is maintained for the vehicle.

of the vehicle;✗ poor quality of body

repairs, leading togeneral neglect;insufficient information to

User’s Responsibility• note any damage, mechanical problems or areas of worsening wear and tear in
the vehicle log book;enable them to responsibly•

a minimum weekly check on oil, water and tyre pressure by the vehicle user, withthe result of each check noted in the vehicle log book. This will also help keep tabs
on vehicles which may be losing oil or water or have a slow puncture;•

maintain the vehicle custodian log with maintenance schedules;

assist in addressing•

regularly clean the bodywork, upholstery and trim;

these causes.

•the vehicle should not be used to tow beyond its capacity.

✗drivers provided withfulfill their obligation tomaintain the vehicle.
This Guide will hopefully2

GeneralFair Wear& Tear

Servicing and documentation Regular maintenance and servicing should be
carried out by a franchised dealer or lessor approved servicing agent according to themanufacturer’s guidelines, using approved service parts and lubricants only. Any defects or
damage that occur during normal vehicle use should be rectified as soon as authority forthe repair has been granted.
The vehicle instruction book, including the full service record and any other documents
relating to vehicle equipment are the responsibility of the vehicle user and must be intact
and available. All documents must be in the vehicle on its return to the leasing company- including any details of radio codes.
Appearance Regular cleaning of both the interior and exterior of the vehicle is required.
The vehicle should be returned at lease end in a suitably clean condition to allow proper
inspection of the paint, body and interior.
Additional Equipment Accessories such as car telephones that have been installed
are to be removed, and any holes or damage should be made good to a professional
standard. All standard equipment, together with non-standard or ‘customised’ fittings
originally supplied, must be returned at the end of the contract period.
Badges and Labels Non-standard badges, labels or advertising fitted to the bodywork
or glass of the vehicle should be removed, with any damage caused by their attachment or
removal made good. Any paint work colour fade due to the attachment of advertisingwould be chargeable to the user. Advertising should never be painted directly onto thevehicle.
Keys and Security A full set of keys should be available along with a note of theirnumbers. If the locking system is remote, the appropriate key fobs should be available andfunctioning. Return of the master key which controls the vehicle’s engine management
system is mandatory.
If the vehicle was originally supplied with a security system, this should be intact and fully
operational, including any key or key fob necessary for operation. Any additional,
non-standard security system should be fitted according to a recognised standard.

✗Dents of morethan 20mm indiameter or
paint surface
penetration✗
Abrasions ofmore than
25mm in length✗
Damage topaintwork frombird andbat droppings

Vehicle Exterior
Body Damage Any damage must be repaired as and when it occurs. All work should
be completed to a professional standard, with any applicable anti-corrosion guarantees
taken into consideration. Obvious evidence of repair such as colour mismatch or
mis-alignment between panels is unacceptable.
Dents Minor dents (20mm in diameter) are acceptable as long as the paint surface has
not been penetrated so that bare metal is visible or corrosion has set in. Multiple dents
occuring on a single panel (no matter how small) is unacceptable, and the panel should berepaired or replaced.
Paintwork Small areas of stone chipping, door edge chipping and light scratches (up to25mm in length) are acceptable, relative to the vehicle’s age and mileage, as long as they
have not penetrated through to the base metal and caused corrosion. If stone chippings
have penetrated through the metal, suitable touching up should be carried out immediately
to prevent further paint deterioration. Exterior paintwork should be free from majorabrasions (more than 25mm in length) such as paint damage caused by continual use of
automatic car-washing, and have good gloss and colour. Colour mismatch between
panels, or poorly fitting panels, are unacceptable. All repairs to the bodywork must be
suitably re-rust proofed up to the manufacturer’s recommended standards. Bird excrement
should be immediately removed.
Bumper Sections and Rubbing Strips Provided these are not broken, cracked ordeformed a limited amount of scuffing and score marks is acceptable.

3✗Cracks orholes inplastic covers
or lamp units

Window Glass Cracks or damage within the driver’s sight line are not acceptable andwould require windscreen replacement. If relatively minor, repair using resin impregnation to
motor registry standards is acceptable. Light scratches and minor chipping around theperiphery of the windscreen is accepted as fair wear and tear. The windscreen must beable to pass a roadworthy inspection.
Lamp Glasses/Lens All lamps must be operational. Minor scuff marks or scratches areacceptable, but holes or cracks in the glass or plastic covers or lamp units are not.

Vehicle Interior✗Cuts, rips
or damage toseat fabrics

Interior Trim The interior should be clean and tidy with no visible burns, tears orpermanent staining to the seats, headlining or carpets. Wear and soiling through normal
use is acceptable, as are any repairs that are not readily visible. Stitching that has comeapart is unacceptable and needs to be repaired.
Luggage Area Surface scoring and light blemishes that reflect normal use areacceptable, but floor coverings and surrounding trim panels should not be torn or split.

✗Missing
itemsLight Commercial Vehicles For light commercial vehicles it is recommended that alining be fitted in the load area to prevent serious damage to the vehicle’s interior, as
excessive damage to this area is unacceptable.
Door Opening Tread Area A reasonable amount of scuffing to the door and luggage
area treads and sills is acceptable providing paintwork has not been damaged down tobare metal and aperture seals are not torn.
Controls All original controls must be intact and operate correctly. If replacement has
been necessary, e.g. due to theft, then equipment of a similar value and specification,
preferably of the same manufacture as the original, should be fitted. All odometer
alterations must be reported and unauthorised odometer changes are unacceptable.
Information stored in GPS/Satellite Navigation Systems should be deleted. Missing parts
and items will be recharged.
Rubber Seals Normal wear will cause a certain amount of damage and splits to rubber
door and other seals, but any evidence of neglect or misuse is unacceptable. If a seal
becomes displaced it should be refitted immediately to avoid it becoming trapped or torn.

Vehicle Underside
Underside Minor dents and deformation, such as stone damage, is acceptable aslong as it has not caused major corrosion. Any suspected impact damage should beinvestigated and dealt with professionally, as significant damage or distortion to chassis
components is not acceptable.
Exhaust System The system should be properly suspended and in efficient working
order, with no gas leaks or evidence of blowing from the exhaust system joints and inundamaged condition.
The exhaust system should be in a condition to meet motor registry requirements in all
aspects, particularly if fitted with a catalytic converter. CAT failure is unacceptable andpreventable through:••••using the correct fuel;regular servicing and maintenance;
immediately investigating any poor running symptoms;
not tow or clutch starting (for manual transmission) of the vehicle.

Oil Leaks Any serious oil leakage should be rectified at the earliest opportunity. Someminor oil misting or dampness around seals or gaskets is acceptable, providing oil drips
are not present.

4✗Dents ordamage towheel trims✗
Damage tosidewalls
or tread✗
Missing sparetyre

Wheels and Wheel Trims Dents or damage to the rim or main body of the wheels are
not acceptable. All four wheel trims must be intact, with no more than minor scuffing due
to everyday use. If mudflaps are standard equipment they must be intact and properlyattached. The spare wheel, jack and appropriate wheel tools must be stowed properly andin good working order.
Tyre Wear and Damage All tyres, including the spare, must meet motor registry
requirements and comply with the vehicle manufacturer’s recommendations of tyre type,size and speed rating. There should be no obvious damage to sidewalls or tread causedby ‘kerbing’ or other heavy misuse.

Mechanical Condition
Regular servicing and maintenance through a lessor approved repairer and in accordancewith the vehicle manufacturer’s servicing programmes should keep the vehicle in soundmechanical condition. The following examples are conditions usually caused by vehicle
neglect or misuse and therefore are not regarded as fair wear and tear.
Brakes Grooved brake discs caused by metal to metal contact.
Engine Seized due to running vehicle with insufficient coolant, lubricating oil and withbroken internal components.
Transmission Slipping, erratic gear changing, clutch slipping, noisy transmission orineffective synchromesh.

The RoadForward

All fleet vehicle users should be aware of the principle of fair wear and tear, along with fleet
operators and supervisors. On the vehicle’s return, it is to be inspected and formal agreement
documents signed. In instances of disputes an independent assessment should be made.
In brief• fair wear and tear summarises the degree of deterioration judged to be reasonable
when a fleet vehicle is returned at end of a contract period;•lack of attention to detail, misuse or neglect are the main reasons fleet vehicles sufferfrom unreasonable levels of fair wear and tear. Some amount of wear and tear damage
may occur through normal everyday business use which could be deemed acceptable
if reflective of the vehicle’s age, mileage, and overall condition;•

all parties should be aware of their responsibilities where monitoring, maintenance andrepair of company vehicles is concerned - this will differ from fleet to fleet;•when repairs are carried out long term guarantees should be sought to avoid futureproblems;•maintenance and servicing should follow the manufacturer’s recommended scheduleand be carried out by approved servicing agents;•regular spot checks by fleet operators or local supervisors will help ensure any
problems with the vehicle (or driver) are identified at an early stage;•a vehicle log book system will help both drivers and fleet operators keep track ofany vehicle damage, problems or areas of worsening wear and tear;•the vehicle user should be responsible for a minimum weekly check on oil, waterand tyre pressure;•a schedule of regular cleaning and valeting should be worked out between the vehicle
user and fleet operator/ supervisor;•all documents must be intact and in the vehicle on its return to the leasing company.

5Fair Wear & Tear Guide Summary
These descriptions relate to passenger vehicles having travelled less than 100,000 kilometres. Wear and tearcommensurate with higher kilometres, commercial and heavy duty usage will generally apply.

Fair Wear& TearGeneral• Missing Service Manual, Owner’s Manual• Missing keys or security system remote (if applicable)

No
NoEquipment• e.g. Missing/damaged cigarette lighter, knobs, trims, aerials• e.g. Missing/damaged tools, jack
• Information stored in GPS/Satellite Navigation systems should be deleted

NoNoGlass• 1 or 2 minor chips, bullseyes and stars (not in field of vision)• Major chips, bullseyes and stars (and minor chips in field of vision)• Non-operational or cracked/broken headlights or lenses

Yes
NoNoTyres• Unroadworthy• Missing spare tyre

NoNo

Wheel Trims (including hubcaps)• Missing, split, badly disfigured, heavy scuffing• Minor scuffing

NoYes

Interior - trim/upholstery/carpets/controls• Screw holes from car phone removal• Seats/trim - burnt, cut, holed, ripped, visible repairs• Soiling to seats and carpets - caused by normal use• Permanent soiling to seats and carpets - caused by abuse, spills, grease, etc• Rips, cuts, marks, splits to trim and controls• Normal odours, tobacco smells• Missing or inferior quality replacement controls• Torn or split luggage area trim panels and floor coverings

NoNoYesNoNoYes
NoNo

Paint/Body• Minor scratching - less than 25mm in length and shallow, 2 per panel• Major scratching - more than 25mm in length and deep, more than 2 per panel• Minor touch ups or minor flaking• Prominent touchups, spoils from bird/tree droppings, major flaking• Evidence of poor repairs, colour mismatch, mis-alignment between panels• Major abrasions - more than 25mm, signs of constant use of automatic car wash
• Dents - greater than 20mm diameter or paint surface penetration• Dents - less than 20mm diameter, no paint surface penetration and no more than 2 per panel• Hail damage, buckling, distortion, missing badges• Minor stone chipping on bonnet, lower doors, wheel guards• Prominent areas of major stone chipping• Un-repaired or poorly repaired aerial holes (or aerial must be left in place)• Damage caused to the vehicle due to the attachment or removal of decals/stickers• Damage to paintwork from bird and bat droppings

Yes
NoYes
NoNo
NoNo
Yes
NoYes
NoNo
NoNo

Mouldings/Grille/Bumpers/Mudflaps• Minor parking damage - scuffing, light scratches• Medium damage - divots, gouging, minor dents, cracks• Major damage - rips, major dents, distortions, holes• Missing moulds, grilles, bumpers or mudflaps originally fitted to the vehicles

Yes
NoNoNoUnderbody• Minor dents and deformations• Major impact damage• Exhaust leaks which are the result of visible damage to the exhaust system

Yes
NoNo

Mechanical Condition• Failure to service and maintain the vehicle as per the manufacturer’s recommendations, resulting inpremature component or assembly failure (e.g. engine seizure, metal to metal brakes, transmission failure)No6