Pay-as-you-go or annual fleet breakdown cover?

Pay-as-you-go breakdown cover guide by Kyle Davy, Sales Manager – Fleetmaxx Solutions Ipswich

Paying for breakdown cover every year can feel frustrating when none of your vehicles needs assistance. On the other hand, receiving a large, unexpected recovery bill can make an annual premium look like money well spent.

So, should your business choose annual fleet breakdown cover or pay for assistance only when something goes wrong?

The honest answer is that it depends on your vehicles, your work and the level of financial risk you are comfortable carrying.

How annual cover works

Annual breakdown cover gives the business a known arrangement for an agreed period, subject to the policy terms and selected level of cover. This can make budgeting easier and gives drivers and managers a clear number to call.

Drivers should also understand what to do while waiting for assistance. The Highway Code guidance for breakdowns and incidents explains how to reach a place of relative safety, alert other road users and contact a recovery service.

It may be particularly attractive when:

• Vehicles cover high annual mileages
• The fleet operates nationally
• Missed jobs would be expensive
• Vehicles work during evenings or weekends
• The fleet includes specialist or heavy vehicles
• Predictable monthly or annual costs are important

The reassurance is not simply that help can be requested. It is also knowing that the response process has been considered before a driver is stranded.

What is pay-as-you-go breakdown cover?

With a non-insured pay-as-you-go arrangement, the business pays for breakdown or recovery assistance when it is required. If no vehicle breaks down, there is no annual breakdown premium for unused callouts.

This can suit some businesses with newer, low-mileage or occasionally used vehicles. It may also be worth considering for seasonal fleets, secondary vehicles or operators that prefer to retain the financial risk themselves.

However, pay as you go does not make the incident free. The final cost can depend on the vehicle, fault, location, time, recovery distance and specialist equipment required.

Five questions to ask before deciding on pay-as-you-go breakdown cover

First, how often have your vehicles needed assistance during the last two or three years? Include roadside repairs, recoveries and incidents outside normal working hours. Your maintenance and defect records may help identify recurring problems. The DVSA provides detailed guidance on keeping commercial vehicles safe and roadworthy.

Second, what types of vehicle do you operate? Recovering a car is very different from recovering a coach or a fully laden HGV.

Third, what would one lost working day cost? Add driver time, missed revenue, customer disruption and replacement transport.

Fourth, where do your vehicles travel? Local vans returning to the same depot present a different risk from vehicles travelling throughout the UK or Europe.

Finally, could the business comfortably absorb a large unplanned recovery invoice?

Mixed fleets may need a mixed answer

The choice does not always have to be identical for every vehicle. A business may want more comprehensive arrangements for its essential, high-mileage vehicles while taking a different approach to lower-risk vehicles.

National Breakdown can accommodate different vehicle types and levels of cover within one annual policy, with a universal renewal date. Vehicles and cover levels can also be changed mid-term, subject to the relevant terms.

Pay-as-you-go breakdown cover Vs annual cover

Choose around the consequences

Kyle Davey – Sales Manager

Fleetmaxx Solutions – Ipswich