HI Ali. You are spot on. We ordered a top spec BMW X1 through the scheme just last year. It has a powerful 2.0 litre engine, four wheel drive, auto, full leather etc and retails at nearly £40k. The AP was £2,749 although we negotiated a big discount off that with the dealer. In much less than a year, most of the best cars on the scheme have disappeared and the AP’s of those that remain have just got silly.
I don’t feel that the high AP’s can be attributed solely to the chip shortage. This tends to affect lead times and whether or not the car is on the scheme, rather than the AP. Vehicle prices have increased, but probably by around 5%, so an increase in AP’s of around 5% would be understandable, but many AP’s have sky rocketed, even for very modest cars.
I can’t help but feel that there’s some profiteering going on at Motability Operations. They are currently benefiting from resale values of returned cars being anything up to 30% more than they had anticipated when setting the AP’s. I’d hazard a guess that the average resale price of a returned Motability car is around £15k, so they will be benefitting to the tune of up to £3k per car at present. Why can’t this windfall be used to lessen the current AP’s? All we get is a £60 insurance rebate, which is welcome but only reflects around 2% of what they are saving!
The added win for Motability Operations is that the unaffordable AP’s are forcing many customers to extend leases to 5 years, which is highly profitable for them. No capital outlay to buy a new car and less depreciation in the 4th and 5th year. Yes there will be servicing & MOT costs plus tyres etc, but this will cost them well under £1k, yet Motability customers will be handing them another £6k in sacrificed benefits.
All of this adds up to a torrid time for Motability customers at present whilst Motability Operations staff will already be looking forward to what will most likely be record bonuses this year!