The discount can be applied without actually changing the AP so not technically breaking Motability’s rules, as far as a PIP recipient loosing their entitlement to benefit the salesman should be reported for harassment and pressure selling with lies and threats, whatever you choose to do with your PIP allowance is up to you and has nothing whatsoever to do with your entitlement and suggesting you would be committing some kind of fraud by not paying his full price is almost demanding money with menace!