All the above of course requires Motability to individually manage (micro-manage) each returned vehicle and the realisation each individual vehicle makes – which they don’t. Nor could they really be expected to do it for circa 3000 vehicles per week (based on their stated buying of 200,000 vehicles per annum on a reasonably static customer base). They are all aggregated. Rather than individually managing Fred Blog’s returned Ford Focus (very low mileage VGC etc), it is sent to auction as part of a batch (if the dealers don’t want first dibs via the mfl Direct scheme). This auction batch will have an overall expected price. So, whilst Fred Blogg’s returned Focus may exceed the expected price at auction, Joe Smith’s 60.000 mile Focus may not etc etc. However, to add in a further illustration, what if it is a quiet auction day (lots of stock but few buyers) when Fred’s Focus is sold and only sells for a minimum price. Yet, Joe’s crap Focus is sold the following day with loads of buyers and less stock present and exceeds its expected price? This is why returns are aggregated. It is the way big businesses do it to even out variables (thus cash flow) and keep costs down by not micro-managing each individual vehicle. In Motability’s evolutionary circle, it also equates to the GCB also being aggregated (provided the vehicle meets the minimum condition based on the dealership’s ‘ticky box’ report). It doesn’t matter if Fred’s vehicle way exceeds the minimum condition necessary to generate the GCB and Joe’s simply meets the minimum condition. All get paid the same GCB. For Motability to individually micro-manage each returned vehicle at such volumes would cost Motability (and ultimately the customer) a fortune.
Thank you BG for your perfectly simplified comment 🙂