- This topic has 10 replies, 8 voices, and was last updated 1 year, 2 months ago by
.
- Topic
I took a test drive today of a Scenic. The dealer told me that he heard on the grapevine that Motability are pressuring manufacturers to increase their AP. He said that so far Renault have resisted this pressure.
Has anyone else heard this?
Doesn’t seem very charitable from Motability. Maybe a mass writing to MPs would be something worth undertaking?
- Replies
Not sure I’d believe a word any dealer says. I’m sure there are those that don’t bs but there are a lot that do.
I don’t believe that for one minute. Manufacturers deal directly with Motability and the AP is based on the purchase price Motability can get on a vehicle amongs’t others.
It’s that magic word grapevine that bothers me. Makes it completely uncheckable and therefore really just another word for rumour.
From what I have been told eons ago motability and manufacturers agree on the price of a particular model. Motability expects to get a certain amount of money back when the car is sold after end of lease. They look at historical used values and if that particular model is sold less than what motability expects then the difference is covered by the AP. Of course there are other factors affecting APs. Motability and manufacturers are pushing EVs by lowering APs on some models and dealers offering further discounts.
I think that the salesman has got the wrong end of the stick regarding what Motability have been saying to some dealership chains, but I know what he’s (wrongly) referring to.
I posted a few weeks ago that a Dealer Principal told me that he attended a meeting at Motability HQ recently and was told that Motability are becoming very concerned about the nationwide and ongoing problems with residual values of EVs, and their future exposure to this. As we know, Motability have been pushing customers towards EVs for a few years now, and whilst take up still remains relatively low (as a percentage of the total fleet) it’s now a big number in actual terms.
I might have this figure slightly wrong, as I’m doing it from memory from a quote I read recently from Motability Operations, but every 1% movement in used car prices affects them to the tune of around £122m. As has been widely reported, the used EV market is dreadful at present. Selling sufficient new EVs is proving to be enough of a challenge, but demand for second hand EVs just isn’t there and dealers and Motability are very concerned about it. Motability are trying to hedge against their future exposure to the problematic used EV market by raising APs. They have also said that there are more AP increases to come because of this issue. Unfortunately, I don’t think that Motability will just whack up the APs on EVs (where the problem is), but will do it across the board to lessen the blow on individual cars.
This obviously poses the question as to why Motability are still really pushing EVs. As kezo has said, APs are set by Motability Operations, as they are calculated based on the purchase price discounts that they are offered from the manufacturers. At present, manufacturers are offering fleet operators (such as Motability) big discounts on EVs as they are struggling to sell them to private customers so are using fleet companies to meet their targets.
If the dealers want sales, they can offer a price off the AP.
My Ioniq came with £750 off the AP price, which matched the 750 from Motability.
As others have said, the AP is agreed every 3 months between Motability and the Manufacturers. If the manufacturers cant broker a deal with Motability, the car doesnt make the scheme.
If the dealerships want to shift cars, they can offer incentives.
i think another problem motability are going to face is the Governments targets for OEMs to achieve regarding BEV sales. this year 22% of all car sales have to be BEV in the UK by 2030 that number has to be 80% not sure if the new labour government will alter the target or give the OEMs a longer time to achieve the desired quota but if it is withheld each year OEMs will offer less petrol alternatives and soon all that will be on the motability list are BEVs. if the APs for over half of them remain at £3000+ i think that might hit the sales side of motability as not everyone including myself has that kind of money to spend the most i have paid for a AP was £3k for a very nice BMW X1 in 2015
i think another problem motability are going to face is the Governments targets for OEMs to achieve regarding BEV sales. this year 22% of all car sales have to be BEV in the UK by 2030 that number has to be 80% not sure if the new labour government will alter the target or give the OEMs a longer time to achieve the desired quota but if it is withheld each year OEMs will offer less petrol alternatives and soon all that will be on the motability list are BEVs. if the APs for over half of them remain at £3000+ i think that might hit the sales side of motability as not everyone including myself has that kind of money to spend the most i have paid for a AP was £3k for a very nice BMW X1 in 2015
I think manufacturers will say enough is enough to the ZEV targets, as many manufacturers are rowing back on their EV rollout timeframe.
Renault’s chief executive is the latest motor industry big name to cast doubts on the transition to electric cars in the next decade, warning that sales are not on the ‘right trajectory’ was reported on yesterday.
If UK GOV don’t listen, manufacturers manufufacturing EV’s in here, will just take manufacturing away from the UK
I think manufacturers will say enough is enough to the ZEV targets, as many manufacturers are rowing back on their EV rollout timeframe. Renault’s chief executive is the latest motor industry big name to cast doubts on the transition to electric cars in the next decade, warning that sales are not on the ‘right trajectory’ was reported on yesterday. If UK GOV don’t listen, manufacturers manufufacturing EV’s in here, will just take manufacturing away from the UK
Yes, the pushback from manufacturers is definitely starting to happen. The Renault boss is spot on – the trajectory is way off. It’s all very well forcing targets upon manufacturers, but you can’t force consumers to buy cars that they don’t want and aren’t practical for their needs.
The majority of the transition so far has been company car drivers and fleet users, due to the benefit in kind taxation advantages (for the former) and heavy discounts (for the latter), as manufacturers use this market (including Motability) to get their EV numbers up. Private buyers are a completely different animal though. Yes, there are currently savings on road tax (although I’m sure that’s time limited), but no personal tax incentives and, if the customer cannot charge at home, running costs are no cheaper than their ICE car which doesn’t have range issues and only needs a 5 minute refuel every 400-600 miles. I can foresee an awful lot of people driving very very old ICE cars in the 2040’s and 2050’s
- You must be logged in to reply to this topic.