Even though we are leaving Motability later this year, having decided that the scheme is no longer able to provide the sort of cars that we want, I remain of the view that the July changes won’t be as bad as many are predicting.
The 12% Insurance Premium Tax could be mostly offset by the removal of things such as overseas cover etc It seems only fair to make that an extra cost option for those who want it.
I don’t see how the 20% VAT on APs can be so easily avoided, but if the mileage allowance drops then, technically, the cost of core leases should fall (I said technically 😂). It makes me wonder why Motability have waited for government intervention to make this change, given the fact that the vast majority of Motability customers drive very low mileages.
For those who need to do high mileages, I’m sure that option will remain, possibly through higher APs (that’s just a guess, as it’s easier to administer) and I just don’t see them charging 28p per mile for excess miles when commercial lease operators charge a fraction of that.
I appreciate that the majority of Motability customers probably don’t have the finances, or the confidence, to go elsewhere, but there is a significant number of us who do and, if the changes are too crippling, a lot of customers will vote with their feet. Motability will be aware of this. They will also be mindful that they are likely to lose a substantial number of customers if and when the much trumpeted benefits review happens and eligibility criteria for Motability gets changed (possibly by disconnecting the automatic gateway entitlement to the scheme through getting higher rate mobility PIP and making it more ‘condition dependent’).
However, it’s all guesswork and whilst it’s unsettling, we can only wait and see what happens. Given that the scheme has been in a gradual state of decline for many years (in terms of what’s on offer and the AP increases) I doubt that there will be much by way of good news but, as I say, I don’t think that it will be quite as catastrophic as is being predicted!