Hello All, I consider if I shall leave Motability (within a month) and purchase outright a car which is not on the scheme, or to remain and go for the next vehicle. I appreciate the cars below may not be for everyone’s taste, but please, be kind and refer to my calculations rather than to my choices / my taste. Assumption
- For the purpose of this discussion the inflation within the next 4 years will be 0 (zero)
- From April 2025 an annual enhanced mobility element will remain circa £4,007 per annum for the next 4 years.
- I have charging point at home
- The charging cost of £0.07 per kw makes consumption difference between the two options below insignificant.
- I have generally good experience with EV cars for a long time and terrible with Plug-in.
- I prefer to stick to EV, as for my driving style and distances it is the best option.
Motability
- I consider to go with Skoda Enyaq 85x SportLine (providing there still be one in stock) – what I saw will cost just below £3,000 (because of 21″ tyres).
- I cover 20,000 miles pa.
- I normally keep Motability car for 4 years
Alternative
- As you may know, Jaguar seized manufacturing their EV cars until 2026.
- My personal assumption – they will not survive the market (hence their price within 4 years period will significantly decline)
- They have brand new (pre-registered) I-Pace HSE models dropped from over £70,000 they used to charge + extras to £40,000 with 10 to 30 miles on the clock.
- This model, due to its door, is easier for me to get and out than Motability alternatives.
- Its driver seat is very comfortable and I can get into required sitting position with no pain.
Finance My Mobility PIP £4,007 x 4 (years) = £16,028 Savings on deposit £3,000 Paying for I-Pace – £40,000 Insurance for I-Pace (assumed same annual price for 4 years) – £,1200 x 4 = -£4,800 Normally I have to replace all 4 tyres during the lease -£350 x 4 = -£1,400 Total £16,028 + £3,000 – £40,000 -£4,800 -£1,400 = -£27,172 At the end of 4 years period I expect this car with 80,000 miles won’t fetch more than £12,000 top TCO (total cost of ownership) -£27,172 + £12,000 = -£15,172 So I have a loss of -£15,172 vs loss of £19,028 with Motability (£3,000 deposit plus losing my monthly payments). This sounds too good to me and I would like to have your opinions, please. Thanks in advance.
As someone who left the scheme a few years ago, I would say it can work (but, then I would say that, wouldn’t I?).
However, whether it works is very much a matter of one’s own circumstances, particularly financially. I was fortunate in being able to pay outright for both of the vehicles purchased from my own capital. Then save the weekly £80+ pounds per week mobility supplement in a higher rate regular savings account.
Looking at your calculations, may I ask how your projected £40k capital to buy the vehicle outright is being financed?
If from savings etc, then add in the loss of interest on this capital (compounded over 4 years) into your calculations. At say 5% this could represent a tidy sum which ideally needs to be factored in to the overall cost, particularly in the early years until you have saved up your weekly allowance to a reasonable level to partially offset the loss of interest.
Or are you looking to finance the £40k, which most likely would be dependent on your financial circumstances if you can borrow so much?
If financing, depending on your income, credit history etc, then a high street bank personal loan may probably start from around 6.5% APR per annum upwards over 4 years.
If looking to finance via Hire Purchase, then look to maybe 10% APR plus per annum?
Or are you looking at a vehicle PCP etc (which isn’t really buying the vehicle outright due to the later balloon payment etc)?
Obviously what interest rate you will pay depends on your own circumstances.
Not forgetting that monthly payments on the above options may well be higher than your 4-weekly allowance.
Again the interest payable would need to be factored in to your equation, as, if borrowing £40k it could amount to a substantial sum. Then balance this against the cost of a scheme vehicle.
Also add in to your overall calculations an amount for annual servicing and for any repairs which fall outside of any warranty.