@ChrisK From what they are saying, they aren’t just going to increase APs by 20% plus insurance premium tax, which is what we all feared. It seems as though they are going to try to offset some of that cost by reducing scheme benefits. For example, by removing overseas cover (which I suspect only a tiny fraction of Motability customers need) and (presumably) making that an add on (at extra cost), their block insurance policy cost will drop, hopefully offsetting some or most of the IPT. Likewise, reducing the mileage cover from 60k over 3 years to say 30k, lease costs will fall which will help offset some of the cost of the VAT on APs.
Personally, I think that would be a sensible approach. Why should 100% of Motability customers be paying extra for two things that they will never need (60k mileage and overseas cover) or to subsidise those who will benefit from it? It’s far better, and fairer, to reduce scheme costs for the majority and then allow those who require a bigger mileage allowance or overseas cover to pay extra for them, just as would be the case in the rest of the leasing market.
Frankly, given the small mileages that the majority of Motability customers seem to do, it makes me wonder why it’s taken the government imposition of taxes on Motability for them to realise that this would be a far more cost effective, and fairer, approach.
