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With electric car residual values plunging to record lows and Motability’s seemingly unstoppable push towards getting all of it’s customers into an EV, are they actually creating a financial crisis for themselves (or us as customers) in the very near future?
I’ve been chatting to a Motability specialist at a dealership this morning and he said that they are very reluctant to take any EV in px now as they just can’t shift them. He also said some of his customers are really shocked and even offended when he tells them what their current EV is worth for px.
Will this mean higher Advanced Payments, longer leases or only the cheaper EVs being available to customers in the future as Motability struggle to balance the books?
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Not sure it’s as bad as some of the media would have us believe.
4 & 5 year leases would be perfect. We’d happily keep our Enyaq 85 for 4 years.
I am inclined to agree, extending lease to 5 year would shield Mobility as regards EV depreciation.
Unfortunately I have suffered a brain injury and occasionally I get confused and often say the wrong thing.
Never been a fan of extended lease, due to the additional cost of sacrified benifits, which currently would be over £17k + AP for 5yrs, so don’t know where I’d stand if it became mandatory across the board.
Never been a fan of extended lease, due to the additional cost of sacrified benifits, which currently would be over £17k + AP for 5yrs, so don’t know where I’d stand if it became mandatory across the board.
Agree 100%. One of the few remaining attractions of Motability for me is the ability to get a new car every 3 years. As you say, a 5 year lease adds around £8k to the cost, in order to run a 4-5 year old car, which does not appeal and would tip the balance back in favour of running a private car in my case. I do appreciate though that for those who would be unable (or unwilling) to run a car privately it helps spread a high AP over a longer period, so I’d have no objection to it becoming an option again for those who want it, but if it became a standard thing then it would push some of us away from the scheme.
5 year leases as an option would be good, even if they limited those given the option to those paying above a certain AP.
I like the thought of a 5 year lease, however, I tend to get bored of a car after a couple of years, so its not something Id envisage wanting to taking up.
I have tbh also had a couple of scheme cars that I got bored of mainly because the drive experience in the first year had diminished in a couple of cases this was simply because the tyres had 6000 miles of use which in both cases threw the steering set up out completly ( new shape nissan note 2015 and bmw tourer)
Having had the Megan E Tec for 15 months now ( 7000 miles)
I can say hand on heart that it is the only car I have ever driven (both scheme and private) that still maintains that first drive feeling everytime I get in and drive it.
The car is a Joy
I will miss it like no other at the end of my lease
But me being practical above all else
I will then be looking at the most efficient/suitablr cars available
Things are changing at a pace
The Kia EV3 if/when available is my top pick at the moment but at the speed of new offerings who knows whats going to be around the corner in 18 montths time.
I don’t know why they changed back to a 3 year term. In my opinion the option to extend was perfect, especially when there was nothing on the scheme that was suitable. By changing it back to a maximum of 3 years they’ve made a rod for their own back.
I do agree with kezo & glos guy, extending and paying the same amount for an aged car do seem daft, however if I’m to get another car on the scheme tbh there’s nothing I like at all, maybe other than another xc40..
However the seats on the new xc40 is that nubuck stuff, car isn’t as good or any better than we already have, also choice of only a dark interior, then the wheel choice again don’t like the choice of 2 types, they’ve only changed the front bumper, and headlights, so why pay another ap for basically less spec car, and no real difference to the older xc40.
Volvo really need to up the choices..
I don’t know why they changed back to a 3 year term. In my opinion the option to extend was perfect, especially when there was nothing on the scheme that was suitable. By changing it back to a maximum of 3 years they’ve made a rod for their own back.
I agree with you. Even though I’m not a fan of extended leases, there are many that are!
We signed our latest lease August 2023 before the changes to 5 year lease extensions, hopefully they will play ball as per contract and allow us to extend, we paid £6,999 AP with the intention of extending as per terms and conditions, lets see what happens at the end of the 3 year lease.
Unfortunately I have suffered a brain injury and occasionally I get confused and often say the wrong thing.
Just extended our lease by two years. Nothing on the scheme in my AP price range at the moment. I Just opened our account on line and the option was there no fuss no questions ✔️ I’m a fan of the two-year extension puts off the need to pay ££££££ on an AP. Something might come on in January and if it does I will get it but I’ve got peace of mind for a further two years.
The only person who got all his work done by Friday was Robinson Crusoe.
Anything i post over three lines long please assume it is an article lol.Same here, logged on and the option was there on the right hand side saying you can extend for a further 2 years. Just press continue and agree to terms and conditions and 2 year extension was granted with the option of renewing at any time during the 2 year extension. I have 16000 miles on the clock with only 3 weeks left of the 3 year lease so maybe that has something to do with having the extension option offered.
I imagine going forward this will be an offer for all exsisting 3yr contracts
But wonder if/when we will see a 5yr min contract brought in for all new contracts
I imagine going forward this will be an offer for all exsisting 3yr contracts But wonder if/when we will see a 5yr min contract brought in for all new contracts
5 year leases should definitely be an option for everyone, especially if accompanied by a lower level of benefits sacrifice in years 4 and 5 to reflect the significantly lower depreciation (which, of course, wouldn’t happen) but I just can’t see a scenario where 5 year leases become compulsory. Motability would lose far too many customers when people work out that a 5 year lease costs them £20k (PIP rates), plus the AP, for a car that you’ll never own. For me, 3 year leases just tip the scales in favour of sticking with Motability, as long as we can get a car we are happy with. If 5 years became compulsory it would be a no brainer for us to ditch Motability and revert to running a car privately, as would, I am sure, most others whose financial position gives them that option.
Motability definitely weren’t struggling when the residual value of a 3 year old EV was pretty much be sale price they negotiated, for one period it was much higher. Last time I heard anything they were sat on retained earnings in the billions (£1.5b+) which will take a while to become a financial crisis.
Seeing as Motability don’t offer the Porsche Taycan, which allegedly is losing £100k in 3 years, and is also standing out as an exception, I’m not convinced there’s a problem just yet.
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
To revert to the original question, it is a matter of fact that Motability are concerned about their exposure to poor EV residual values (they have been telling their major dealer groups this for some time), but this won’t result in a financial crisis. Sadly, what it has resulted in (again, according to what they are telling dealers) is an across the board hike in APs over the past year with more to come.
I don’t know why they changed back to a 3 year term. In my opinion the option to extend was perfect, especially when there was nothing on the scheme that was suitable. By changing it back to a maximum of 3 years they’ve made a rod for their own back.
Hi Elliot, my 3 year lease is up on January 8th and have just extended my lease for a further 2 years, I logged onto my Motability account and the offer was right there, Extend the lease until January 8th 2027 and can still order anytime within that time frame
i have only recorded 16000 miles so i’m not sure if this has anything to do with being offered the extension?
Apparently, the new policy (as explained to me by Motability) is that 5 year extensions are now only available if you have done a maximum of 20,000 miles over the 3 years or have adaptations. Everyone can extend for 3 months, regardless of mileage. However, they don’t appear to have told their website and a number of forum contributors have been able to click to accept a 5 year lease even when these criteria don’t apply! Strangely, I didn’t have that option online, but I got Motability to authorise an extension by challenging the fact that they’d changed the rules mid lease. It was a point of principle really, as I didn’t want to keep a car for 5 years!
Apparently, the new policy (as explained to me by Motability) is that 5 year extensions are now only available if you have done a maximum of 20,000 miles over the 3 years or have adaptations. Everyone can extend for 3 months, regardless of mileage. However, they don’t appear to have told their website and a number of forum contributors have been able to click to accept a 5 year lease even when these criteria don’t apply! Strangely, I didn’t have that option online, but I got Motability to authorise an extension by challenging the fact that they’d changed the rules mid lease. It was a point of principle really, as I didn’t want to keep a car for 5 years!
We may be in a similar position in August 2026, we signed our lease August 2023 before the contract changes.
Unfortunately I have suffered a brain injury and occasionally I get confused and often say the wrong thing.
This is in our draft contract to be signed on deliver of our new car in Feb/Mar 2025.
”DURATION OF HIRE The Hire Term is for a minimum period of three years starting on the date of delivery of the Vehicle (the “Minimum Hire Term”), but continuing thereafter until either the expiry of a period of twenty four months following the Minimum Hire Term (the “Maximum Hire Term”) or the date on which this Agreement is terminated in accordance with the terms set out in the Contract Hire Terms and Conditions (Ref T&Cs – 09/24)(the “Conditions”), whichever is the earlier.”
If the car is good, we would I think prefer to extend by a couple of years to defer a cost of AP. Our current car had £0 AP but is no longer suitable for our needs hence giving it back after 3 years.
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