[Plato]

Can you guys help me understand how things are working.
With Nil advance you can get what more or less retails as £33,000 on a seat leon e-hybrid
But with £250 advance you can get a £22,000 seat ibiza.
Why do we pay the £250 then, vs nothing on a 33k car?

Another little thing being new, why is the regular Skoda Fabia hatches not available ?

Thanks in advanced

Topic

[Tim]

It’s all to do with residuals after the lease. It’s part price prediction at resale time, part negotiated purchase price by Motability behind the scenes and part price gouging at times, think early adopter tax.

Price gouging examples can be seen on the EV side where some vehicles may start out at multiple thousands in AP and then drop by 80% in a month or quarter.

[Glos Guy]

It’s as Tim says, but I would add that it’s always been the case that the most expensive cars on the scheme offer the best value and the cheaper cars the worst value, even with ‘normal’ AP’s.

For example, a £20k car with zero AP costs the customer 50% of the cars new price (£10k sacrificed benefits plus £0 AP = £10k = 50% of £20k). By contrast a £36k car with a £2k AP costs the customer 33% of the cars new price (£10k sacrificed benefits plus £2k AP = £12k = 33% of £36k).

[bfoandc]

It seems, as well, that different makers operate different strategies. There are some makers whose dealers often offer discounts off the ‘official’ advanced payments. Another factor, it appears, is if there is a ‘glut’ of certain models of cars as seemed to be the case with the Kona EV Ultimate last quarter. In Hyundai’s case last quarter they were, apparently, caught out by a change in the price limits for the EV grant which affected the Ultimate model and they had a ship-load of Ultimate models at sea for the UK. Offering them on Motability meant they didn’t have storage costs and those Motability customers able to change then got their cars at great value and pretty quickly.

[72 dudes]

As above and with regards to the Skoda Fabia query, it’s because an all new model is due in the next month or so.

[Plato]

Thanks so much for the replies! Helped put it into perspective

[Author]

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