Imagine going to get a car and them saying you’ll pay the same each month for a 3 year old car over a brand new car, what would you think of that? More people are extending due to lack of choice or high ap’s and mbo profit from it. In my years on the scheme I have never extended once.
Very true and that’s why I’ve never extended either. The biggest cost of any car, which is factored into the AP, is depreciation. Most of that occurs during the first 3 years. Depreciation over years 4 and 5 is a fraction of that suffered during the first 3 years. So as well as continuing to sacrifice the full benefits for an old car, you are also paying an AP that reflects a 3 year lease. The slightly larger GCB doesn’t remotely reflect the extra £6.5k benefits you pay for years 4 and 5, nor what the AP would have been lowered to had it been priced as a 5 year lease in the first place. It’s a win, win for Motability and, with the high number of customers extending leases at present , there is no incentive for them to improve choice.
I do appreciate though that lease extensions can be useful for customers when their financial circumstances mean that Motability is their only route to a car and their current Motability car is far superior to anything available on the scheme at present, especially if they have added quite a few options. I’m sure that many are extending in the hope that scheme choice may have drastically improved by delaying by another year or two. I hope they aren’t disappointed.