Are motability making too much money?

  • Creator
    Topic
  • #189678 Reply
    Ldc7080

    So I have a Honda Civic sport plus.  RRP about £28k.  Forget any motability discount at point of sale without VAT the cost to Motability is £22.4k.   My AP was £2k.  And over the course of what will be a at least 4 yrs my PIP contribution is a little of £13k.  Now I know I get tyres , break down and insurance but as it stands I reckon that’s cost £1.5k at the most.  So the delta .  Motability need to clear about £7.5 k to break even.  On auto trader my car is still selling at about £17k.  So Vat removed £14k.  That is £6.5k profit.   Isn’t it feasible that after 3 years we should not have to pay the full PIP allowance as they are clearly raking  it in ?

Viewing 25 replies - 1 through 25 (of 28 total)
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  • #189687 Reply
    Wigwam
    Participant

    Yes.

    #189692 Reply
    Mrmartin
    Participant

    I think you have a valid point, Couple of points I would say, traders, will not pay the advertised price. So the £6.5k profit to MB will probably be more like £4k, Plus then you have to take out of that margin cost of operations also. So Staff, offices, grants, Adaptations etc etc

    Now they are supposed to be a charity. So and profit should go back into the operations. the issue is they should be supporting advanced payment. Plus they don’t need to a high level of surplus in the bank.

    #189695 Reply
    Jojoe
    Participant

    Yes, and with the lack of new cars, the value of used cars is going through the roof so they are going to make even more money.

    The thing I find annoying is the lack of a good deal if you want to buy your car at the end of the lease. You’ve paid £10k in PIP payments towards it, but they will sell it to a dealer who’s going to make a profit from it, for a far cheaper price than they will sell it to you. I think that needs to be investigated by the government.

    #189696 Reply
    Phil

    They’ve definitely been creaming it in and seem to be doing very little to help folk with the ridiculous AP’s that are being banded about these days.

    I think many customers are now on the verge of leaving due to either being forced into a car they don’t want or doesn’t suit their needs for the price they are having to pay upfront.

    Another point is that those who’ve extended to 5 year will be looking at the awful thought that they could have probably bought their current mobility car outright in that period, but instead will have to give the car back and then go and pay a huge AP again….no prizes for who’s the real winner there!

    It seems the people at the very top have become focused on £££ rather than on their members vastly different wants and needs from a motor with a reasonable AP.

    #189700 Reply
    Elliot
    Participant

    Motability should be investigated by an independent body especially as to how they calculate the AP’s. The model certainly works in their favour that’s for sure.

    #189701 Reply
    ChrisK
    Participant

    Let’s hope it doesn’t come to Sunak attention because he will be making a windfall tax grab on Motability Operations. 😀

    Over the years I’ve complained to Motability about the extra cost I / we have on top of the AP’s for likes of hoist, driving remote controls and automatic gearboxes and always get the impression that although I’m given loads of sympathy I get no help whatsoever and larger profits could be one of the results of putting folk off even thinking about grants.

    • This reply was modified 1 month, 1 week ago by ChrisK.
    #189703 Reply
    Smoggy

    They just where investigated well a study type thing by an independent disabled body in Scotland.

     

    Aps too high

    Wages too high

    Operating costs inflated

    There was a few other pick ups by them.

    It won’t let me post the link but if you Google the following then will find the report

    Motability: a Briefing Paper on value for money by the Mobility and Access

     

     

     

     

     

    #189707 Reply
    rox
    Participant

    Yep they sure are it’s run like the lottery and then they give away the excess made to good cause of a disabilty nature and not really back to those on the scheme. That’s another reason i left the scheme recently after 11 years and 4 cars on the scheme. My milage has also dropped alot and only doing 5/6 a year half of what i was doing. so they get a car back with well less than the 60k allowance they provide and what do you get back nothing..you add extras and pay an ap what do you get back after they make more from the sale than a standrad car.. nothing.

    With rising ap’s the car i recent bought has risen another £500 which was an increase of 50% this 1/4 and i only see it getting worse. mb the charity is giving away 50m to good causes. we get a one off £250 towards your next car imo it’s an insult.

    #189708 Reply
    tinytim
    Participant

    I was told by grants team that they are the charity side and motability operations acts like a business and have to make a profit as the banks support it that is why it is successful right or wrong but to me long live motability as from the days in the 50s and 60s disabled were limited to one choice even now with the lack of cars it still rules better than the the old days before motability.

    tim

    #189709 Reply
    rox
    Participant
    #189710 Reply
    Jojoe
    Participant

    Smoggy
    They just where investigated well a study type thing by an independent disabled body in Scotland.

     

    Aps too high

    Wages too high

    Operating costs inflated

    There was a few other pick ups by them.

    It won’t let me post the link but if you Google the following then will find the report

    Motability: a Briefing Paper on value for money by the Mobility and Access

    I’ve just read that, I’m now even more annoyed. The money Motability gives to charity is from disabled peoples advance payments. 😡 The net assets of Motability are now £2.88 billion.😡  Motability operations is owned by Barclays, HSBC, Lloyds, TSB and RBS. 🙄

    #189716 Reply
    WardyGTC
    Participant

    As tinytim said, the fact that Motability the charity and Motability Operations the business are separate entities gives them the freedom to do what they like. As long as Ops keep donating to the charity I can’t see any major changes on the horizon.

    If I seem a little strange, that's because I am.

    Mercedes Benz B180 Premium Plus.

    #189717 Reply
    tinytim
    Participant

    I agree with the mass profits being made has annoyed me and i told motability this but we have this forum to discuss this i wonder if we just never knew this in the 70s 80s 90s and now there is of course some dealers going bust and my dealer has said when they cannot provide a new car in a certain time they must make money on used cars and servicing but a lot of retail customers i think will go to a specialist for lower costs.

    tim

    #189719 Reply
    tinytim
    Participant

    As to attitude at some dealers i have had many an argument which you should not have to do it should be a pleasant thing to order a car not stressful the dealer i have chose now i am happy with.

    tim

    #189720 Reply
    Wigwam
    Participant

    To be fair to the banks, they were put there to provide financial security to the scheme. They don’t take any money from it.

    #189724 Reply
    Windy
    Participant

    What smarts with me is Motability Operations the business has the enviable position of purchasing the vehicles VAT free on the back of disability therefore giving them a Monopoly over any other finance company

    #189722 Reply
    DJP
    Participant

    I am not defending Motability but atm you also have to take into account the gcb and the £250 they give back atm

     

    #189734 Reply
    kezo
    Participant

    It won’t let me post the link but if you Google the following then will find the report

    Motability: a Briefing Paper on value for money by the Mobility and Access Committee for Scotland (2022)
    1.  MACS wishes to see better value for money in the Motability scheme, in particular to ensure that excess profits are returned to customers, rather than donated to the  charity or added to reserves.

    2. Motability is the biggest fleet provider in Europe, and the largest purchaser of new vehicles in the UK, accounting for 1 in 10 of all new car sales. It benefits from unique tax exemptions (VAT and Insurance Premium Tax) enabling it to provide a competitive service to over 650,000 customers in the UK who use their disability benefits to lease a car or mobility aid (powered wheelchair, scooter).

    3. The Motability Charity’s income has grown massively in recent years. The Charity Commission reports it is now the tenth biggest charity in the UK in terms of size of investments with funds of £1,368 billion at the end of 2021. Almost all these funds derive from the benefits of individual disabled people, having been donated by Motability Operations (the charity’s commercial partner) from surplus profits. A chart on the Charity Commission website shows the growth of Motability’s assets.

    4.  In the latest financial year, Motability Operations made a profit of £560 million and donated a further £170 million to the Motability Charity. Together, these sums equate to £1,150 for every Motability customer. The net assets of Motability Operations increased in the past year to £2.88 billion. The National Audit Office and Westminster Work and Pensions and Treasury Select Committees criticised Motability for acquiring excessive reserves and for excessive executive remuneration in 2018-19.

    5. In addition to these profits, MACS believes that Motability Operations also has considerable scope to reduce costs (from premises, to remuneration, to printing), which would provide further opportunities to cut the cost of leases. We believe salaries at all levels are especially above benchmark levels, and are generally supplemented by generous benefits for pension, private healthcare, car allowances etc.

    6. In July 2021, MACS wrote to Motability Operations, jointly with the Disabled Persons Transport Advisory Committee (DPTAC, UK) and the Inclusive Mobility Transport Advisory Committee (IMTAC, Northern Ireland), to ask that future profits beyond what is required to run the business should be returned to customers. Motability Operations rejected this request, saying that future profits would continue to be “invested in the business” or donated to the charity.

    7. However, Motability Operations has begun to return excess funds to customers in a number of ways. The ‘Good Condition Bonus’ which customers receive on completion of a three year lease (if the vehicle is in good condition) has increased in the past few years from £250 to £600 currently. Insurance rebates (£50) were introduced in 2021, reflecting the lower insurance costs during the pandemic. Most significantly, in February 2022, Motability Operations introduced a new rebate for customers starting a new lease – the New Vehicle Payment (£250).

    8. As MACS was at the forefront of advocating a return of excess funds to its customers, we welcome these measures; but MACS also believes that there is much more that Motability can and should do to ensure that customers do not pay more for their vehicles and equipment than they need to. Ultimately all the money in this system is derived from disabled people’s benefits.

    9. We also note that some costs to customers have gone up which may negate the £250 New Car Payment (i.e. higher advanced payments, hand controls previously included in the lease now costing £125 for basics and boot hoists significantly increasing in costs). As such many customers will still pay more over the course of their lease period.

    10. In addition to our concerns on value for money, MACS also wishes to see more accountability in Motability governance. Motability customers have no say in how excess profits are used, or if they wish to contribute donations to the charity, or in how the Charity spends its money. Motability Operations, the sole provider of services for the charity, is owned by financial institutions: Barclays, Lloyds TSB, HSBC and RBS.

    11. There is little scope for customers, the public or indeed governments (which provide the customers’ disability benefits and Motability’s tax breaks) to influence either the commercial scheme or the charity’s policies. As a joint charity/commercial operation, it is not subject to normal public sector governance requirements such as the Public Sector Equality Duty of the 2010 Equality Act or Freedom of Information legislation.

    12. MACS recognises the importance and value of the Motability scheme to thousands of customers but believes that more fundamental change is required in order to provide adequate value for money and accountability.  As responsibility for Scottish disability benefits are transferred from Westminster to Holyrood, the Scottish Government has become a key stakeholder for Motability, which is currently the sole accredited provider of services under the Scottish Government’s new Accessible Vehicle and Equipment Scheme (AVES). MACS has informed Scottish ministers of our concerns, and of our hope to see fundamental change once the transfer of responsibility for disability benefits has been completed.

    #189735 Reply
    Wigwam
    Participant

    Thanks for that kezo and Joejo.  I thought things were bad and Motability profits have been discussed here a number of times, but reading that makes me angry.  Scotland is free to use another provider. Let’s hope it does and the rest of the UK use the example to demand the same.

    #189737 Reply
    kezo
    Participant

    Pure greed and frankly bloody disgusting.

    #189738 Reply
    Jojoe
    Participant

    WigwamParticipant
    Thanks for that kezo and Joejo.  I thought things were bad and Motability profits have been discussed here a number of times, but reading that makes me angry.  Scotland is free to use another provider. Let’s hope it does and the rest of the UK use the example to demand the same.

    Thanks for the praise Wigwam, but it wasn’t me it was @Smoggy who found the report, I’m just an annoyed bystander lol.

    #189740 Reply
    Elliot
    Participant

    That report is spot on and they should be brought to task by the Government but of course we know it won’t happen.

    #189741 Reply
    fwippers
    Participant

    I agree with the comments here, perhaps as customers, we should receive a “dividend” every year, a return on profits, our profits.

    #189937 Reply
    ajn

    Not going to read through all the posts, however would it be ok and over looked if we were to receive payments on the profit, a sort of shut up money…

    Are we getting over paid to be able to afford the rising APs, and the fuel to run, or installation of chargers..

    Guess not…

    #189957 Reply
    kbfern

    As a matter of interest regarding this class action case against VW there has been an agreement/ruling VW are to payback a considerable amount(£190 million)to those who bought/leased their products between 2009/2020. Are we or Motability going to be getting any of that cash, I had a VW Tiguan between April 2018/Mar 2022 so it would be nice to get something but hope it’s not Mb as they have made enough out of me already.

     

    https://europe.autonews.com/automakers/vw-settles-uk-emissions-class-action-242m#:~:text=An%20out%20of%20court%20settlement%20has%20resolved%20as%20many%20as%2091%2C000%20claims.&text=LONDON%20–%20Volkswagen%20settled%20its,impacted%20by%20the%20emissions%20scandal.

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