All very well thought through points @Jay but, personally, even though my wife and I have decided that we will be leaving Motability, I don’t see these changes resulting in a mass exodus. As this forum often demonstrates, many Motability customers won’t even entertain other options and plenty more couldn’t, even if they wanted to, due to lack of funds, poor credit ratings etc.
If we look at each of the changes, the biggest ones are the removal of premium brands and the addition of VAT to APs. I read yesterday that 40,000 cars on the scheme are from the now banned premium manufacturers. That’s only 5% of the cars on the scheme. Some of us will indeed leave the scheme because of this, but I’d hazard a guess that only around 20% will, as the other 80% will accept a non-premium brand in order to stay in the scheme, or won’t have the financial means (or confidence) to do anything else. So that equates to just 1% of scheme users leaving due to this change. As I say, it’s a calculated guess, but I suspect not far out.
As for VAT and insurance premium tax on APs, I don’t know the numbers on this one, but I suspect that the overwhelming majority of people pay no more than £1k on APs. Those of us who contribute on this forum aren’t terribly representative of the average Motability punter IMHO, as we are mostly car enthusiasts to a greater or lesser degree, so probably on average pay far more than the average AP. Therefore the average Motability customers will only be hit with an extra AP of a few hundred pounds. If you look at what’s happened to APs over the last few years, they have gone up by way more than this, yet Motability customer numbers have rocketed so, again, I suspect that the numbers that leave because of this aspect will also be very small.
As for the reduced mileage limits, this would only affect a small percentage of Motability customers, as most seem to do exceptionally low mileage, many to the point of where having the car is economically unviable! There will hopefully be options for those who do use the full 20k a year to still be able to do so at a reasonable cost.
Keeping in mind that the 20% VAT exemption on the basic lease is remaining, the scheme will still be cost effective for the vast majority of people, even with these adverse changes, and still cheaper than other options (if people insist on having a brand new car – a used car will obviously be cheaper).
The issue that I believe is far more likely to have a big hit to Motability is the benefits review due next year. There seems to be a lot of talk about reverting Motability to a scheme that caters for people with physical disabilities only. This is obviously a minefield, not least due to the fact that in recent years mental health issues were deemed to be disabilities, in the same way as physical disabilities, and that would take an awful lot of unraveling, even if there was an appetite to do so, and would be subject to countless legal challenges. What could be easier (and is probably far more likely) is changing the questions and criteria for the higher rate mobility component of PIP, as this alone would remove access to Motability for many. However, it may be that yesterdays changes take the focus off Motability completely, and there may be no changes as a result of the benefit review!
My final point is that even if the benefit review cuts large numbers entitled to Motability, and this adds to the comparatively fewer numbers who leave due to yesterdays changes, the scheme will still have more than enough customers to avoid the scenarios that you describe. Keep in mind that just a few years ago the scheme had 200,000 fewer customers, yet choice was far better and APs were considerably lower than they are now!
