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A big car dealership, car company or motability itself should really be thinking about options to gain/not lose customers. IMO there is a strong business case for having a new car alternative paid for by PIP/ADP mobility allowance.
With a number of manufacturers having a 7 year warranty, others with an option to have extended warranties and insurance costs to be less for used cars – why not do a Nil option for low mileage 2nd hand cars for 3 years. Some smaller cars with cashback or reduced payment terms etc.
Motability in particular should be looking at this. Don’t know why they stopped extending leases. It would be more cost effective for them to have 2nd hand cars making money for them than selling them after a whack of depreciation. Motability or some other company should get together with warranty and insurance companies to thrash something out.
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If motability extended the lease past the 3 years customers would be more willing to pay higher AP for a higher spec car, or pay the dealer for options to be fitted to a factory order. But as the lease is only for 3 years it’s not worth doing.
Motability are safe in the very secure world that a complete Monopoly with customers who heavily rely on their service provides. It doesn’t help that the current political climate towards disabled people is less than friendly.
In an ideal world, there would be 2 or 3 existing lease companies that would be given permission to receive the payments directly and that level of competition plus their already streamlined systems would keep costs to a minimum. What we’ve been left with is a bloated inefficient feeding trough for employees, management and the 4 banks running the company.
When you look at the jobs page and see very few people have left and there’s only new and the very occasional replacement job advertised, that shows that everything they offer is more than generous. Add in what you see in the job adverts and it becomes ridiculously clear that the benefits package is extraordinarily generous. Then look at what they have to publish for the people at the top and it’s still a shining example of generosity. The annual statements show the company is a very long way from struggling.
A commercial lease would balance the pay and conditions with staff turnover and pay the minimum they could get away with, the savings would be enormous. Even if the ‘Motability’ type arrangements were made more generous for us customers, including fully covered maintenance and 3 people on the insurance and completely flexible onward travel (including the current hire car provision) I’d guarantee that any of the large scale leasing companies would be able to beat the rates offered by Motability, even if they were the monopoly, add in competition to prevent excess profits and the APs would drop significantly. I’d even bet if put out to tender, there’d be a bunch of suitable companies lobbying on the day the tender was released.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.Mark
The only problem with competition rather than the Motability monopoly is if you equate it to the many independent corner food shops all having competition with each other, it does not bring the prices down below what the large supermarkets can charge/sell at, due to their buying power that the corner shops can’t compete with.
Arguably, rather than having Motability with it’s Monopoly and large buying power, you had 3 or more all competing, would they still have the large buying power to negotiate even lower prices from the Manufacturers and pass it on to us or are we just creating more tiers of competing bureaucracy as in the UK Government and the Scottish Government which both have to be paid for and are often duplicating each other.
I think you may be missing the point a bit. We are talking the used car market so it would be easy to do.
I won’t go into anymore details at the moment as I think there is a valid option here particularly for people who want a smaller outlay/monthly payment, don’t do a lot of miles and are just looking for a reliable car for day to day use. I used to be in the industry years ago and have contacts that I might explore. I wouldn’t be setting something up for myself to run with due to my conditions but I have a few people who could manage such a scheme and would have backing by some big players in the different markets involved in the car industry. There are also a few glaring holes in the motability proposition that would also be addressed that would suit a large number of disabled people throughout the country.
Will keep you posted after some discussions with the relevant parties that would be involved.
Its not gonna happen.
Motability is a Govt created entity with special tax provisions.
Entering the 2nd hand market would put a lot of leasing companies and garages out of business as it is not a level playing field. Neither is it good for the motor trade who rely on a constant source if low mileage 3 year old Cars.
A lot of garages rely on buying and selling ex mobility cars, it is their bread and butter.
It is all academic anyway, as a lot of mobility customers have had enough of the changes and are jumping ship.
I would happily have a secondhand car as long as I can get it from a reputable business that offer fair value, well maintained cars.
In fact, the ideal operating model I would like to see from Motability is much longer leases, fully insured, maintained and MOT’d, say an 8 0r even a 10-year lease but with the opportunity to buy the car at lease end at TRADE price.
Also. AP’s!!!!! I mean come on, there is something not quite right about AP’s and there hasn’t been for a very long time. I would love to see the logic in detail of how they get to these figures. If I were being sceptical, I looks like someone’s at it! Just off the top of my head, there was a car on the scheme very recently – Honda Civic in sport trim, an ultra reliable car that hold their money very well. AP was around £1400. It came of the scheme last week and has been replaced by the lower trim version with an AP of 3999, I would love to chat to Motability in detail about how they got to 3999.
Back to second hand – If we used all our 36month budget to get a 2nd hand car covering maintenance and insurance and not be restricted by age of car, I for one would happily give it a go.
@Callmejohn it’s not exactly the competition that streamlines processes and creates better value, it’s the existing processes that were built for competitive advantage and cost control rather than just generosity for staff.
Yes, @Woodpecker I’m aware of the sad reality that the government have no desire to force change while customers are walking away.
The thing for me is that, outside of the scheme, leasing makes no financial sense. I’d be spending money I really can’t afford on a car I’d never own, without the financial aid of the tax benefits of Motability and without all the support of worry free motoring that we had, just paying £320+ a month just to have a car that works for us makes no sense. There are cars out there that are massively more affordable that are suitable and, if I can stay for the whole of the next lease, there will be a whole bunch of the cars I’m looking at now available used. A 3 years old EV5 would be ideal and very likely to be affordable.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.Mark
Outside of Asian manufacturers Hyundai/Kia and Chinese, warranty remains at 3yrs, which partly explains why Motability have avoided used cars.
Then there’s the fact, not every disabled person has a healthy credit rating to buy a new or used car and if they were lucky enough to be offered credit it would be at an high interest rate. To these people, Motability, even with their faults offer risk free motoring directly paid from their government benefit, No other external competition will never be able to replicate this service.
How would the competition offer Adaptions at the same or similar price to Motability.
I have never bothered extending a lease, as I find it offers poor value with sacrified benefits remaining the same ££ as with a new car.
I’ve owned a number of mobility scooters over the years. And picking a random one from the MB website a Pride Colt Plus 4mph scooter. MB lease price £23.30 x 52 x 3 = £3635
You can buy one online delivered free to your door for less than £1200. And provided you follow the charging guide mobility scooters are super reliable. But you’d have to put the seat and basket on yourself and get rid of the packaging.
For the equivalent MB price you could buy a new one every year and still have some spare cash.
And that’s not an exception I’ve picked other ones at random and over three years it works out x3 more expensive to lease one from MB than buy one.
I only mention this as a comparison to car leases.
Another reason why I believe this hasn’t already been introduced is there’s always a question mark over any used car’s identity and there’s always a risk that the car that a disabled customer could be driving had previously been in an accident, not maintained properly or indeed out of warranty.
At least with a box fresh brand new car there’s no history of any previous accident damage (Or you’d hope not) or indeed the likelihood of anything going wrong is much lower.
In my experience on the scheme, the latter is totally irrelevant because I’ve always been supplied with complete sheds from stock that have gone bang almost immediately but it’s still less likely to happen with a new car.
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