PIP & DLA going up by 10.1%. What will happen with Motability?
Virtually nothing (if anything)!
Most of it has already been priced in to Motability’s 3 year leases and resultant AP’s.
Motability basically priced in this increase (well, at least 7.1% of it) when they released their Q3 price list on 1st October 2022.
How you could tell was that the differential pricing of vehicles on the scheme (at T/A) between DLA/PIP/AFIP etc and WPMS, which, over a projected 3-year lease widened from £1170 to £1253 (7.1%) from 1st October 2022.
The only time this gap widens is when Motability factor in and project forward the annual increase in the allowances used on the scheme, into their pricing (as WPMS is paid at a higher amount it goes up by more than the other benefits/allowances and thus the pricing differential widens).
In the past Motability usually factored this in on the Q1 prices, prior to the date of actual allowance increase in the April, but this year, they did it a quarter earlier.
There maybe some minor tinkering around with the residual 3% not yet factored in, probably for the Q1 2023 pricing, but that is relatively ‘in the noise’ as far as their customer facing prices are concerned with the relative cost of vehicles, salaries, insurance, tyres, servicing ‘et al’ increasing.