I thought the AP was to off set the loss on the vehicles re sale value at the end of the 3 year lease, surely a 5 years mandatory lease would be a greater loss resulting in a higher AP.
Maybe and I didn’t see the posts fwippers is referring to. My reasoning is most of the depreciation occurs when you drive off the forecourt, and many cars have lost 50-60% of their value at 3 years, depreciation after that stage slows markedly, plus Motability are still getting the full payments from your allowance, so I would expect that to be more profitable? The biggest risk is many cars are out of warranty after 3 years, Kia and Hyundai make great EV’s and the warranty would still be valid for the whole lease, so that would be less risky.
Just to correct you slightly Intranicity, as like me, I believe you are also a WPMS recipient.
If WPMS recipients extend their lease (or have their lease extended by Motability), we actually receive a ‘rebate’ of currently £7.25 per week from Motability Operations for the period of the contract extension (paid to the customer quarterly in arrears).
If this rebate were not to occur, then it would mean WPMS recipients paying more of their vehicles than PIP/DLA/AFIP customers during the extension (as the original AP and monthly payments are amortised over the standard 3 year lease period).
So, for WPMS customers, it can be a useful saving to extend the lease. If the current weekly £7.25 were saved up over the course of a 2 year extension, it is £754 to put towards the AP of the next vehicle.