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StateFleet Leasing Arrangement

In 2003 the NSW Government introduced the StateFleet Leasing Arrangement for the provision of passenger and commercial motor vehicles to budget sector and other approved agencies.

This arrangement is financed by the NSW Treasury Corporation and managed by StateFleet.

All new motor vehicles delivered to approved Client Agencies are financed under the StateFleet Leasing Arrangement.

Eligible Clients

Eligible Clients of the StateFleet Leasing Arrangement include:-

• Schedule 1 (Departments) to the NSW Public Sector Employment and Management Act 2002, 
• NSW Chief and Senior Executive Service, 
• Other agencies as agreed by the NSW Treasury.                                                                

StateFleet Responsibilities

As Manager of the StateFleet Leasing Arrangement, StateFleet is responsible for:

• forecasting and reviewing the residual value percentages of vehicles available for lease under the arrangement,
• managing the residual risk,
• providing indicative lease quotations for the lease of vehicles,
• purchasing and arranging for the delivery of vehicles in accordance with Client order requirements,
• arranging payment to vehicle suppliers,
• providing a lease schedule in accordance with the Master Lease Agreement between StateFleet and the Client at the commencement of each lease,  
• endeavour to ensure that vehicles are being serviced by Clients in accordance with manufacturers specifications and are being maintained in good repair and in a clean and roadworthy condition throughout the term of the lease,
• disposing of vehicles including controlling the disposal method, negotiating reserve prices, detailing and arranging the sale and collecting the proceeds,
• invoicing and collecting the monthly lease fees,
• monitoring the late return of vehicles and charging the late return penalty, and  
• providing quarterly reporting on the leased fleet.

Client Responsibilities

Under the StateFleet Leasing Arrangement, Client's are responsible for:

• the selection and management of leased vehicles in accordance with the Department of Premier and Cabinet  Motor Vehicle Policy for New South Wales Government Agencies and Department of Premier and Cabinet Memorandum 2005-03 Cleaner NSW Government Fleet,
• maintaining vehicle registration,
• renewing third party insurance with the Treasury nominated insurer,
• vehicle insurance and accident management in accordance with the TMF,
• payment of monthly lease fees within the prescribed payment terms,
• servicing the vehicles in accordance with the manufacturers recommendations,
• maintaining vehicles in good repair and in a clean and roadworthy condition throughout the term of the lease,
• maintaining the vehicle warranty,
• initiating the order for new vehicles and returning vehicles on the lease end date,
• arranging the payment of any fines, levies or charges relating to traffic offences by the driver of the vehicle, and  
• promptly bringing to the attention of a StateFleet representative any errors, problems or issues which may arise during the lease period and may affect the supply, commencement or ongoing provision of services.

Product Terms

The following subject terms are applicable to StateFleet's lease products including the Standard Lease, Serviced Lease and All Inclusive Lease.

Commencement of Lease
Lease End Date
Termination of Lease    
Transfer of Lease Between Clients    
Lease Payments     
Purchase Price of Vehicle   
Interest Rate   
Residual Value Percentages    
Lease Terms         
Vehicle Category Definitions   
Performance Discount / Premium    
General Risk Fee   
StateFleet Fee   
Lease Quotes - easy.Quote
Excess Kilometre Charge
Penalties   
Billing   
Vehicle Replacement   
Vehicle Selection   
Vehicle Purchase and Acceptance - easy.Order   
Fit Out and Modifications   
Additions to the Lease   
Luxury Car Tax (LCT) Threshold   
Vehicle Warranty   
Logos   
Vehicle Care and Maintenance   
Accidents or Theft of Vehicle   
Vehicle Return    
Vehicle Condition Assessment

Commencement of Lease

The lease term commences on the date of delivery of the vehicle to the Client.

Lease End Date

The lease end date is the date the vehicle is due for return to StateFleet. The date is determined by incrementing the delivery date of the vehicle by the number of months in its lease term.

For example: A vehicle delivered on 1/8/03 with a 24 month lease term has a lease end date of 31/7/05.

Termination of Lease

The Client must retain the vehicle for the period of the lease term commencing from the date of delivery of the vehicle. The vehicle lease cannot be terminated early.

The lease term will be terminated on either:-

• the return of the vehicle by the Client and acceptance of the vehicle by StateFleet on lease end , or
• on the date that StateFleet receives insurance proceeds from the insurer in the event of total loss or theft.

Transfer of Lease between Clients

Vehicles may be transferred between Client Departments and Client cost centres if the receiving Client notifies StateFleet in writing that they are willing to accept liability for the lease fees payable. Lease fees terminate for the transferring Client and commence for the receiving Client on the date StateFleet receives notice of the transfer or on a later date as agreed between the Clients.

Lease Payments

The lease payment for a vehicle is calculated when the invoice for the purchase of the vehicle is presented to StateFleet. The lease payment is calculated in accordance with the formula contained in the Master Lease Agreement using the following components:-

• purchase price of vehicle,
• interest rate,
• residual value percentage,
• lease term,
• performance discount/premium,
• general risk fee, and
• StateFleet fee.

Indicative lease payments are available from StateFleet to assist Clients when selecting a vehicle. These payments are indicative only due to fluctuating variables including contract purchase prices, interest rates and residual value percentages over time.

Purchase Price of Vehicle

The purchase price is the invoiced value of the vehicle, including accessories and options, in accordance with the State Contract Control Board's Motor Vehicle Supply Contract (no. 653).

Interest Rate

 NSW Treasury Corporation (T Corp) determines the interest rate on the loan finance for the purchase of vehicles under the StateFleet Leasing Arrangement. This rate is reviewed on a six monthly basis, or sooner where the circumstances warrant.

StateFleet uses the interest rate applicable at the time, in the calculation of the lease payment for a vehicle.

Residual Value Percentages

The residual value percentage is the forecast net sale price expressed as a percentage of the original purchase price. In the StateFleet Leasing Arrangement, a residual value percentage is applied to each vehicle according to its make, model, series, body type and lease term.

The residual value percentage is used in the calculation of the lease payment for a vehicle.

Lease Terms

A lease term is a period of time in months a vehicle can be leased by a Client.  A new range of lease terms became available on 1 June 2012 to meet new requirements under the Motor Vehicle Policy for New South Wales Government Motor Vehicles:-

All Government motor vehicles must be retained for a minimum period of 36 months or 60,000 kilometres, whichever comes first.

The new lease terms for passenger and commercial vehicles provide the flexibility to meet an extensive range of options within the requirements of the Policy as follows:-   

Vehicle Category	Lease term available in 3 month increments	Maximum Kms
Passenger	9 - 48 months	100,000
Light Commercial	9 - 60 months	150,000
Heavy Commercial	9 - 60 months	300,000

The lease term is the period in time in months as determined by the Client.  The nominated kilometres to be travelled within the lease term must not exceed the maximum kilometres indicated above.   The nominated kilometres together with the lease term is used to calculate the monthly lease payment. 

To meet the minimum requirements when entering into a new lease, Clients should estimate the term in months that the vehicle will travel 60,000 kilometres.  If the term estimated is greater than 36 months than the Client should estimate the total kilometres to be travelled by the vehicle in 36 months.

For example:

If it is estimated that a passenger vehicle will travel 2,000 km per month it will travel 60,000 km in 30 months.  The lease term to meet the minimum requirements is 30 months / 60,000km.

If it is estimated that a passenger vehicle will travel 1,450 km per month it will travel 60,000km in 42 months.  The same vehicle will travel 52,200 km in 36 months.  The lease term to meet the minimum requirements is 36 months / 55,000 km. (Under this example, a lease term of up to 48 months / 70,000 km remains optional).

Note: Vehicles cannot be returned early (before the lease end date) under the StateFleet Leasing Arrangement.

Vehicle Category Definitions

Passenger

A four (4) wheeled motorised vehicle primarily designed for the carriage of people, including sedans, wagons, coupes, hatches, SUVs, AWDs, 4WDs, people movers and convertible or van style wagons having a seating capacity of up to nine (9) including the driver.   

Commercial

A four (4) wheeled motorised vehicle primarily designed for the carriage of goods and having a Gross Vehicle Mass exceeding 1 tonne, including utilities, vans, omnibuses and trucks.

Light commercial vehicles are generally defined as having a Gross Vehicle Mass of less than 3.5 tonne.

Heavy Commercial vehicles are generally defined as having a Gross Vehicle Mass of 3.5 or more tonne.

Performance Discount / Premium

StateFleet reviews the lease performance of each Client Agency on a six monthly basis. This review primarily considers the residual performance of each vehicle sold in the previous twelve months.

The outcome of the review may result in the application of a performance discount or premium on the lease fees payable on future lease vehicles.

General Risk Fee

The general risk fee is charged as a component of the monthly lease payment to reduce the exposure to fluctuating residual values on the sale of vehicles.

StateFleet Fee

The StateFleet fee is the lease management fee approved by the NSW Treasury.

Lease Quotes - easy.Quote

easy.Quote is an on-line lease quoting facility available to registered Clients of StateFleet Online. The quoting facility provides indicative lease quotes for the full range of State Contract vehicles including vehicle options and accessories.

Excess Kilometre Charge

Applicable to leases for passenger and light commercial vehicles ordered from 1 November 2004.

An Excess Kilometre Charge will apply on the lease of a passenger or light commercial vehicle if it exceeds the nominated kilometres to be travelled by more than 10%.

The excess charge payable is 12 cents per kilometre over and above the 10% buffer on the intended kilometres.  For example, if a vehicle on a 24 month term / 40,000km lease is returned with 46,000km, an excess kilometre charge of $240 will apply. (10% buffer on 40,000km is 4,000km; 46,000km - 44,000km is 2,000km; 2000 x 0.12 = $240).

Penalties

A Late Return Penalty will apply on the lease if a Client retains the vehicle for more than six months after the lease end date.

The penalty fee payable will represent an additional full lease payment each month until the vehicle is returned and accepted by StateFleet. This fee will be pro-rated from the date six months after the lease end date.

For example, a vehicle with a due lease end date of 31/5/05 has a monthly lease fee of $400. If the Client retains the vehicle after 30/11/05, the total lease fees payable from 1/12/05 will be $800 per month until the vehicle is returned.

Billing

The lease fees payable to StateFleet commence from the date of delivery of the vehicle to the Client, ie. commencement of the lease term, and continue until termination of the lease.

Lease fees are invoiced by StateFleet one month in arrears and are payable within 30 days of the date of the invoice.

The first invoice received for a new vehicle will include lease fees payable from the date the vehicle was delivered to the last day of the invoice month.

e.g. If a vehicle was delivered on 15/4/03, the first invoice dated 31/5/03 will include lease fees payable from 15/4/03 to 31/5/03.

Vehicle Replacement

The Client's Fleet Manager is responsible for ensuring replacement action is initiated in due time so that the delivery of the new vehicle coincides with the lease end date of the vehicle being replaced.

Information on new vehicle delivery times is available under Purchasing Your Vehicle.

Vehicle Selection

Clients of the StateFleet Leasing Arrangement are able to select from a comprehensive range of motor vehicles available through the State Contract Control Board's Motor Vehicle Supply Contract (no. 653). A complete listing of vehicle makes, models and accessories is available through smartbuy.

The selection of vehicles, including options and accessories, should be based on firm business principles according to the Client's operational needs, and in accordance with the  Motor Vehicle Policy for NSW Government Agencies and Department of Premier and Cabinet 2005-03 Cleaner NSW Government Fleet.

Other points for consideration when selecting a vehicle include the indicative lease payment, expected delivery time, compliance under the Luxury Car Tax threshold, the green rating and likely requirement to conform to the Client's Fleet Manager's recommended manufacturer fleet profile.

Vehicle Purchase and Acceptance – easy.Order

When a new vehicle is required the Client is to complete an on-line order using easy.Order; an on-line vehicle ordering facility available to registered Clients of StateFleet Online.

Clients are encouraged to nominate the dealer for vehicle delivery and give careful consideration to the required delivery date. The delivery date should coincide with the lease end date of the vehicle being replaced.

StateFleet will place an order for the new vehicle with the nominated dealer or, in cases where a dealer has not been nominated, the nearest dealer to the delivery location. StateFleet will send a copy of the vehicle order to the Client.

Prior to accepting the new vehicle on delivery, the Client is to countersign a New Vehicle Delivery Checklist. Delivery of the vehicle should not be accepted unless all requirements on the checklist have been met. If required by the Client, StateFleet will assist should a dispute arise during the delivery process.

On acceptance of the vehicle, the Dealer will forward the New Vehicle Delivery Checklist and vehicle invoice direct to StateFleet.

Fit Out and Modifications

All vehicle fit outs and modifications must comply with the Roads and Traffic Authority's NSW Vehicle Standards.

All fit outs and modifications included in the StateFleet Leasing Arrangement are to be returned with the vehicle on lease end date, or alternatively and under prior agreement, transferred to the replacement lease vehicle.

All fit outs and modifications financed by the Client are to be removed from the vehicle prior to its return to StateFleet. The Client is to ensure that any damage to the vehicle resulting from the installation or removal of the fit out or modification is rectified.

Additions to the Lease

If required, additional vehicle accessories or equipment may be purchased after delivery of the vehicle. These items must be ordered within the three month period after the delivery date to include their cost in the lease of the vehicle. The lease fee payable on the vehicle will be adjusted to include the new items.

Orders for the additional items are to be sent direct to StateFleet by facsimile message.

Luxury Car Tax (LCT) Threshold

Any passenger vehicle, station wagon or 4WD vehicle with a cost (GST inclusive), including accessories, in excess of the LCT threshold cannot be leased through the StateFleet Leasing Arrangement.

The Australian Taxation Office reviews the LCT threshold each financial year. The LCT threshold for the 2010-11 financial year is $57,466 (incl GST).

Vehicle Warranty

The manufacturer's warranty on the vehicle commences from the date of vehicle delivery. The terms and conditions of warranty specific to the vehicle are outlined in the Manufacturers Vehicle Handbook.

Clients are to ensure that each vehicle is maintained in accordance with the terms and conditions of its warranty.

Logos

The Client's logo may be displayed on vehicles supplied under the StateFleet Leasing Arrangement.

The logo must be removed from each vehicle prior to its return to StateFleet. The Client should take care when removing logo decals or stickers as damage to the vehicle's paintwork may constitute unreasonable wear and tear under the Vehicle Condition Assessment Policy.

Vehicle Care and Maintenance

Clients are to ensure that vehicles are fully serviced and maintained in a clean and roadworthy condition throughout the term of their lease. Care and maintenance of the vehicles includes:-

• protective and secure covering or garaging,
• regular preventative maintenance checks in accordance with the manufacturer's recommendations eg. fluid levels and tyre pressure,
• regular washing of the vehicles' exterior and cleaning of interior surfaces,
• repair or replacement of damaged paintwork, parts or panels,
• correct usage in accordance with the vehicles' designed purpose,
• regular servicing in accordance with the manufacturers recommendations by a licensed motor vehicle dealer, or Motor Vehicle Repair Industry Council approved workshop.
• StateFleet reserves the right to inspect any vehicle during the term of its lease.

Accidents or Theft of Vehicle

The Client is responsible for implementing appropriate accident / theft management procedures in accordance with the requirements of the Treasury Managed Fund (TMF).

In the event of total loss or theft, the lease fees payable on the vehicle will terminate on the date StateFleet receives the insurance proceeds from the TMF Fund Manager.

Vehicle Return

Vehicles must be returned to StateFleet (or its nominated agent) on the lease end date or most practicable date thereafter. StateFleet will notify the Client of vehicles due for return one month in advance of the vehicles' lease end date.

Note: Vehicles retained for more than six months after the due lease end date will attract a Late Return Penalty.  Vehicles exceeding the intended kilometres to be travelled by more than 10% will attract an Excess Kilometre Charge.

All vehicles must be returned in a clean, well maintained and roadworthy condition with all options and accessories fitted at the time of purchase intact. A Safety Inspection Report (pink slip) must be obtained for each vehicle prior to its sale.

StateFleet reserves the right to reject any vehicles, which are not able to be registered or have sustained excessive wear and tear.

Vehicle Condition Assessment

All vehicles returned will undergo an assessment to determine the condition of each vehicle. Wear and tear that is deemed to be unreasonable may include stains, burns, scratches, panel or windscreen damage, or evidence of vehicle abuse. A full description of unreasonable wear and tear is available in the Vehicle Condition Assessment Policy.

StateFleet reserves the right to authorise minor rectifications to the vehicle in cases of unreasonable wear and tear, up to a value of $300, to maximise its sale value. The cost for these repairs will be deducted from the sale proceeds of the vehicle.

StateFleet also reserves the right to inspect any vehicle during the term of its lease and conduct a Vehicle Condition Assessment to monitor the care and maintenance of the vehicle.