In my opinion, these series of less favourable changes will heavily reduce the number of customers on Motability, essentially triggering various negative chain of events.
Car manufacturers offer discounts to Motability to secure a large share of the fleet market (Primark Model). If the scheme shrinks, manufacturers might lose the economies of scale and be forced to increase prices for all new car buyers to offset the reduced volume and maintain profitability.
Dealerships, particularly those in more deprived areas where Motability sales are a higher percentage of their business, could face severe financial strain or closure.
Motability vehicles typically return to the used car market after three years, providing a steady and significant supply of second hand cars. A decrease in new Motability sales would, in a few years, lead to a reduced supply of used cars, which could potentially cause second hand car prices to increase, which we already witnessed it during Covid when Motability was heavily affected.
As the largest fleet buyer in the UK, a mass exodus of Motability customers would significantly damage the automotive industry by reducing demand for new cars. This could lead to job losses and reduced corporate tax revenue, further negatively impacting the government’s budget.
Therefore these cost cutting as framed by the Chancellor, could be false economy. We know they love to do U-turns, let us hope this is no difference, though doubtful.