In response to the rising Advance Payments, Motability have put out a press release with a ‘natty’ video explaining how bad things are; click here
All valid stuff, but quite telling that they don’t mention the factor that they have told some of their largest Dealer Principals is the biggest current driver of AP growth – their exposure to the widely publicised concerns about EV residual values. From memory, every 1% drop in residual values costs them something like £8m and that has to be clawed back somehow.
What’s happening in the car market?
Manufacturers are continuing to focus more attention on electric vehicles (EVs):
Are they really? I get the impression many big manufacturers are turning away and re looking towards hybrid, as manufacturers push back on dates.
This means there are fewer petrol and diesel cars in the market, making them more expensive to get on the Scheme. So, you might notice some Advance Payments have increased for these cars:
Again really! Whils’t taking into account above, there still remans a substantial price gap of at least £10k between the price of a petrol car and it’s BEV equivilent.
What Motability continue to try put across, just doesn’t stack up outside the scheme. What they have really chosen to do is, open their doors to manufacturers, as an outlet for them to meet their BEV target, in the hope of getting something in return. You have only got to look at the AP’s of BEV’s to realise, Motability would be making a huge loss, if they didnt get something in return. We all know Motability doesnot exist to make a loss!