Automatic Informal Extensions

The FRV process enables the calculation and editing of the final residual value of a vehicle at any time during an agreement's lifecycle

New FRV values are required to be calculated automatically by the system using CAP data as a basis.

The remaining Depreciation would then be spread over the rest of the contract, using the following calculation:

Remaining Monthly Depn = Current NBV (Net Book Value) - New FRV / Remaining periods.

A new Final Residual Value (FRV) is may be recalculated at the following stages of an agreement:

1. At Quotation stage
2. At Contract Start
3. At an (Annual) FRV Review
4. When a contract is informally extended via this process.

There are two very important factors to be taken into consideration when the FRV is being calculated.

1. Safety factor application

   The system offers the facility to apply a safety factor % reduction to CAP valuations at all points where the CAP valuation is called. These points are as follows:

• At initial quote stage
• At contract start
• At FRV review
• At informal extension.
• At transfer to VSB

2. Manual Adjustment

   The system offers the facility to apply and record manual adjustments made to the quoted FRV. The manual adjustment is created at either quotation or contract upload and then remains with the vehicle throughout its life and taken into account whenever the FRV is recalculated.

• The adjustment cannot be changed at any revaluation stage.

Agreements due to terminate on the date this option is run are automatically extended for the period defined in the Automatic Extension Type Group Box held in the Details Tab within Terminations / System Maintenance / System Parameters. The exact way in which the agreement is informally extended is determined by the following criteria:

• The agreement must be Live.

• The system includes those contracts which have a Termination date less than today's date plus Auto-Extension Advance Days. The Auto-Extension Advance Days parameter is held in the Details Tab within Terminations / System Maintenance / System Parameters.

• The Lease Type Informally Extend parameter is ticked.

• The Include in FRV Review? checkbox is ticked for all Lease Types to be included in the FRV (Final Residual Value) Automatic Informal Extensions review.

• The Lease Type attached to the contract has an Automatic extension type code.

• The associated Automatic Extension Type period (e.g. Contract Hire Extension Type Period) parameter held in the Details Tab within Terminations / System Maintenance / System Parameters is populated with the appropriate value. This determines the period for which the agreement is to be extended.

Having ensured that the parameters/tables are set up correctly then this process is typically run at the end of the month. Agreements for vehicles that have been returned must be terminated prior to running this process.

This routine can be placed within Timed Operations.

What do you want to do?

• View the Automatic Informal Extension form
• View the full FRV process

See also:

• FT System Parameters

To access Automatic Informal Extensions:

1. From the Master Menu, select the Terminations option and Company required.

   The Terminations Menu is displayed.

2. Select the Quotations & Extensions option.

   The Quotations & Extensions Menu is displayed.

3. Select the Automatic Informal Extensions option.

Automatic Informal Extensions form

This form is divided into four parts that are as follows:

Title Bar

In addition to displaying the form name the Title Bar displays other useful identification criteria and buttons.

Menubar and Toolbar

• File

• Help

Menu	Icon	Description
File > Exit		Exits the Automatic Informal Extensions form without processing. The ALT X shortcut is an alternative way of exiting the form.
File > Export		Exports the currently calculated Automatic Informal Extension values to a batch file so that the values may be manipulated within a spreadsheet to determine a correct Proposed FRV value. There is no corresponding import process so the externally manipulated values need to be manually re-keyed to this form. The filename is in the following format: INFUUUddmmyyyy.csv (where UUU denotes the login of the user running the process). The system prompts for a directory to which the file is to be exported.
File > Process		Carries out the informal extension process to the specified values and parameters. The system updates profi with the new values. Those vehicle contracts marked with a tick are extended. The system uses the Proposed FRV where populated, else the CAP value. The system displays a warning and does not extend if a vehicle has reached its maximum extension period. an audit event is also created.
File > Save		Saves the current batch file (with any edited values, etc) prior to exporting. It may be that the file is partially edited and may need to be re-visited at a later date for continued editing prior to the export taking place. The proposed FRV value and the extension flag are written back to the agreement file. The next time the informal extension batch file is opened these values are displayed as confirmation that they have already been visited and are readed for export/processing.
File > Refresh		Refreshes the vehicle list according to any new selection criteria.
Help >		Provides online access to context sensitive help for the current application using the default browser.

Automatic Informal Extensions Dialogue Box

Legend:

Registration Date From: Enables vehicles to be filtered via a registration date range. This field allows entry of the start date for the date range.

To: Enables vehicles to be filtered via a registration date range. This field allows entry of the end date for the date range.

CAP ID: Enables vehicles to be filtered according to their CAP ID. This field allows input of just part of ID number by operating a question mark mask facility, although the part that is input must be in the correct position.

Registration Number: Enables vehicles to be filtered via the Registration number. This field allows input of just part of registration number by operating a question mark mask facility, although the part that is input must be in the correct position.

Apply filter upon refresh?: A checkbox which if ticked forces the refresh process to use the new filter selection criteria that has been entered.

Progress: A progress bar which shows a series of blue boxes to denote the progress that has been made when running this option.

CAP ID: The CAP ID for the vehicle variant.

Registration No.: The vehicle registration number.

Description: The full vehicle variant description.

Current FRV: The current final residual value for the selected vehicle contract.

CAP Value: The calculated CAP value. This field is calculated from the current CAP value but also incorporates the Fleet reduction in CAP value % safety factor and any manual adjustment that has been carried through from the original quotation.

Proposed FRV: An editable field that allows an alternative FRV value to be entered. If no value is entered in this field then the Cap Value amount is used as the extended FRV value.

Extend: A checkbox which, if ticked, denotes that this vehicle contract has been validated for automatic informal extension.

Note: The criteria used for Automatic Informal Extensions is as follows:

• Less than 12 months from now until the contract end date?

• Yes - Use Black/Red Book
• No - Use CAP Monitor

• Age is based on the Vehicle Registration Date less extension period
• Mileage is based on the Agreement total Contract miles + pro-rata extension miles.