New XC40 hybrid just about to take delivery: PIP mobility allowance for 3 years + AP – GCB = £350 per month. Total over 3 years £12,600. Cost to buy £42,000. Residual value after 3 years (say) £21,000. So we get the use of a new car for 3 years for £7300 less than the depreciation on the same car if we had bought it and ignoring the cost of insurance and maintenance. With the caveat that without the scheme we wouldn’t be driving a new car or one anywhere near new. Is there something wrong with my maths?
Yes there is Wigwam ? . Firstly (minor point) but I never understand why people deduct the GCB as you get that if you leave the scheme. Yes it helps cash flow but doesn’t reduce the cost of the car as you’d get it regardless.
Secondly (and more significantly) you are assuming that you would pay full rrp. You wouldn’t. No idea what discounts Volvo would offer on a new car but the last 3 new cars I have bought (for myself or family) I got 18 to 25% discount.
I showed a worked example a year or more ago, but I ran a brand new BMW 5 Series for the same average annual cost as our Motability Tiguan, even allowing for depreciation and all running costs. I got £10k discount, a service plan (so no servicing costs), Road tax was £30 a year and insurance £250 pa. Warranty covered everything bar tyres (only needed two, cost £300). As I always say, Motability is fantastic for peace of mind motoring but it isn’t always the financial no-brainier that so many people imply, especially if you aren’t doing high mileage and have the means to go private. Was very tempted to opt out this time and go private again, but Mrs Glos Guy (whose entitlement it is) likes the peace of mind aspect ? ?