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I know there was chat recently about the limit being made a hard 3 years and no more flexibility with extending it 2 more if you wanted; however, it made me wonder why this actually was. I know it is nice to have the choice of getting something different at the 3 year mark, but do we know why they selected 3 years? I know the MOT needs to be done at this point, but I don’t see any good reason why it has to be a hard cut off?
If they allowed 4 years, then what does that do for the resale price of that car?
What about the selling of the car. At the end of the lease, I believe the car goes to some auction; however, they often will never get the highest price they can for it. Surely, they know how much they paid for the vehicle, how much they got in PIP payments and how much the AP was so they know how much they need to make to be profitable, so why can’t they just give us a price at the end of the agreement to see if we WANT to buy the car in the end? Sure, not many will choose this as they can’t afford to spend that sort of money, but some can and want to, but now it is not possible.
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I know there was chat recently about the limit being made a hard 3 years and no more flexibility with extending it 2 more if you wanted; however, it made me wonder why this actually was. I know it is nice to have the choice of getting something different at the 3 year mark, but do we know why they selected 3 years? I know the MOT needs to be done at this point, but I don’t see any good reason why it has to be a hard cut off? If they allowed 4 years, then what does that do for the resale price of that car? What about the selling of the car. At the end of the lease, I believe the car goes to some auction; however, they often will never get the highest price they can for it. Surely, they know how much they paid for the vehicle, how much they got in PIP payments and how much the AP was so they know how much they need to make to be profitable, so why can’t they just give us a price at the end of the agreement to see if we WANT to buy the car in the end? Sure, not many will choose this as they can’t afford to spend that sort of money, but some can and want to, but now it is not possible.
A lot of cars do not go to auction they are sold online by Motability themselves, most cars come with a 3 year warranty hence the 3 years. In N.Ireland mot is 4 years.
Maybe motability what you to take out a new contract.
In the past you could ask motability for a price to buy the car at the end of the contract. Which I did several times, but the price was always at the top end you would expect to pay at a main dealership. No warranty of any kind was offered.
I don’t know for sure what the average discount that Motability gets off new cars, but based on what an individual can negotiate buying just one car, and on the reasonable assumption that with the volumes that Motability buy it will be significantly more, I suspect that it’s a minimum of 20% discount and probably more like 30% with EVs. Then you add to that the 20% VAT exemption. On that basis, at the 3 year point, Motability can probably recover almost their entire purchase price and, in some cases more, even disposing of cars via auction.
Extensions beyond 3 years are profit generative for Motability, as they still demand the sacrificing of the full higher rate mobility benefit (£4k a year) but, as @Mark says, it’s in their interest to keep the flow of new car orders up, as they make a healthy profit on each and every lease. This is also why the prices to buy at end of lease (when this was possible) were always way too high for a car sold with no warranty. They wanted to deter people from doing this so as to keep people in the scheme.
My May 2021 Citroen C4 1.2 155 Shine Plus EAT8 I had it for just shy of 4 and half years done just under 27,000 miles.
All it had was 4 services, 2 MOTs and 4 tyres.
On The Road Retail Price When New Dealer 1st registration. Fee etc £27,605
Price without VAT £22.150Went through Wilson’s Auctions last week I don’t know how much for but a guide Cap Clean Price was £11,800
Now a car dealer in Cwmbran has it up for £14,895.
I also paid £1.195 advance payment on it.
so I don’t think Motability done too bad out of my lease extension.
Current Car 25 Citroën C5 Aircross 1.5BlueHDi 130 EAT8 Max Edition
Previous Cars
05 C3 Exclusive 1.6 110 SensoDrive
08 C2 VTR 1.6 110 SensoDrive
11 C3 Exclusive 1.6 120 Auto
14 C3 Picasso Exclusive 1.6 120 EGS6
19 C4 Cactus Flair 1.2 110 EAT6
21 C4 Shine Plus 1.2 155 EAT8Citroën Fanatic.
My May 2021 Citroen C4 1.2 155 Shine Plus EAT8 I had it for just shy of 4 and half years done just under 27,000 miles. All it had was 4 services, 2 MOTs and 4 tyres. On The Road Retail Price When New Dealer 1st registration. Fee etc £27,605 Price without VAT £22.150 Went through Wilson’s Auctions last week I don’t know how much for but a guide Cap Clean Price was £11,800 Now a car dealer in Cwmbran has it up for £14,895. I also paid £1.195 advance payment on it. so I don’t think Motability done too bad out of my lease extension.
Cap refers to the guide price, which follows the black book car dealer use when valuing trade ins or buying cars from auction etc.
Cap clean is the guide price that reflects the highest value of a vehicle and one that is ready for retail. Ib other word in mint condition for its age, with full service history and 2 keys…
A vehicle can acheive higher than the Cap guide or it could recieve a maximum bid thats below, which in this case vehicle could still be sold, be provisional or not sold and put through the auction at a later date.
My May 2021 Citroen C4 1.2 155 Shine Plus EAT8 I had it for just shy of 4 and half years done just under 27,000 miles. All it had was 4 services, 2 MOTs and 4 tyres. On The Road Retail Price When New Dealer 1st registration. Fee etc £27,605 Price without VAT £22.150 Went through Wilson’s Auctions last week I don’t know how much for but a guide Cap Clean Price was £11,800 Now a car dealer in Cwmbran has it up for £14,895. I also paid £1.195 advance payment on it. so I don’t think Motability done too bad out of my lease extension.
Taking your figures and coming up with an educated guesstimate;
If the ex VAT price was £22k, I suspect that Motability Operations, with their huge negotiating power, paid no more than £18k ex VAT for it.
Let’s say they got just £10k for it at auction after fees, that’s a depreciation hit of £8k.
The services, MOTs and tyres were probably no more than £2k total. Your share of insurance etc over 4.5 years (again, with huge group buying leverage) was probably no more than £1k.
So, in total, the car probably cost Motability Operations about £11k (£8k + £2k + £1k), but you paid them £19k to lease it (4.5 years @ £4k sacrificed benefits = £18k + £1k AP), so a net profit for them of £8k.
Even if some of my figures are a bit out, as you say, there’s no doubting that they made a tidy sum out of you!
Just for your information CAP means Current Auction Prices you have 3 cap prices Cap clean, Cap average and cap below. Cap prices change every day it is all on computer now.
Just for your information CAP means Current Auction Prices you have 3 cap prices Cap clean, Cap average and cap below. Cap prices change every day it is all on computer now.
Novel!
CAP or rather CAP HPI as it is known now, is the leading Valuation provider in the automotive trade providing true valuations to market conditions. They provide used dealers the black book and auction guide prices based on 3 conditions (Cap clean, average & below), whitch differs from Glasses guide.
CAP auction guide price, which is the minimum expected price.
From a bidders point, cap refers to the maximum bid amount, a bidder is willing to pay.
The basics, other than non negotiable fees must be clearly indicated along with the guid price
Just for your information CAP means Current Auction Prices you have 3 cap prices Cap clean, Cap average and cap below. Cap prices change every day it is all on computer now.
Novel! CAP or rather CAP HPI as it is known now, is the leading Valuation provider in the automotive trade providing true valuations to market conditions. They provide used dealers the black book and auction guide prices based on 3 conditions (Cap clean, average & below), whitch differs from Glasses guide. CAP auction guide price, which is the minimum expected price. From a bidders point, cap refers to the maximum bid amount, a bidder is willing to pay. The basics, other than non negotiable fees must be clearly indicated along with the guid price
During Covid some cars were making £5,000 over cap clean.
I heard the term CAP, but never knew what it meant in terms of auctions and such. Every day is a school day! Also, I never knew NI was 4 years for MOT, always thought it was 3 years everywhere!
My current Motability car is my fourth car on the scheme, all the vehicles have been the same make & model which is a Nissan Qashqai. Which meets our special needs daughter (who needs 24hr care) mobility requirements, boot to transport her wheelchair, ease of my daughter getting in and out of the car with assistance.
All the previous cars at the end of the lease have had a mileage of under 23000 miles, and have been in excellent condition. My current car Nissan Qashqai Epower 23 reg has done 15k miles with 3 months left on my current contract.My wife who is the main carer for our daughter, and myself are in our mid seventies, I am the only person who can drive, we have been considering our future, and whether is would be best to go back to purchasing our own car.
Today I phoned Motability, to see if a extension of our lease would be possible, maybe 6 months to give us some leeway for us purchase a car that meets the requirements of our daughter, or if not stay with Motability for another 3 years.
This is the first time in nearly 12 years I have spoken to Motability, and I have been very happy in the service they have provided to myself and my family.
I spoke to a very nice Motability advisor on the phone who took all the relevant details, very understanding, she spoke to some person higher up, and we was refused any extension. I previously mentioned the 16th December deadline date for extensions but was told that’s only if your lease finishes before that date.
99.9% I will be leaving Motabiliy, unless I am unable to find a suitable vehicle, then I will order another Motability car the day before my lease ends.
Very disappointed with the way Motability have treated our family, we have looked after the cars probably better than if they were owned privately.
Last few months looking at the comments on this forum highlights the Motability customers disappointment regarding the current Motability schemes regulations, definitely would not pay the 20% tax on AP, as if they were not expensive anyway.
@chastw I’m sorry to hear that Motability refused to allow you some flexibility, no doubt because they want to keep you in the scheme and don’t want to make it too easy for you to leave. They may, however, have shot themselves in the foot.
Given your very low mileage, the fact that you drive a modestly priced car and look after it as if it was your own car, they make a very handsome profit out of you every 3 years. If you have the means to buy privately, it will hurt a bit the first time (much less if you buy used, as the vast majority of private car buyers do) but, thereafter, you will have a hefty deposit towards your next purchase due to having a trade-in.
With all the adverse changes that are being implemented to the scheme, including the removal of aspirational brands purely for ‘optics’ rather than to save money, the scheme is becoming less and less attractive. I think it’s getting to the point that it will only make sense for those who want an EV or WAV, those who may be eligible for a grant, or those who perhaps do not have the means (or confidence) to explore other options and / or are dead set on having a new car every 3 years.
Some of the changes such as VAT on the AP and the 14% will not be added until the 3rd quarter 1st July, so if you place you order before that date you will avoid these changes. Not sure what the 1st quarter 1st January or the second quarter 1st April will look like, but I should some increase AP will slowly creep in.
Recently in Telford in at the press a 36 man who had his leg amputated when he was 2 years old has had his benefit and disability vehicle removed by the DWP after a video of him playing cricket.
My impression this government is raging a war on the disabled and intent on dismantling the Mobility scheme to it very basics.
Unfortunately I have suffered a brain injury and occasionally I get confused and often say the wrong thing.
I know there was chat recently about the limit being made a hard 3 years and no more flexibility with extending it 2 more if you wanted; however, it made me wonder why this actually was. I know it is nice to have the choice of getting something different at the 3 year mark, but do we know why they selected 3 years? I know the MOT needs to be done at this point, but I don’t see any good reason why it has to be a hard cut off? If they allowed 4 years, then what does that do for the resale price of that car? What about the selling of the car. At the end of the lease, I believe the car goes to some auction; however, they often will never get the highest price they can for it. Surely, they know how much they paid for the vehicle, how much they got in PIP payments and how much the AP was so they know how much they need to make to be profitable, so why can’t they just give us a price at the end of the agreement to see if we WANT to buy the car in the end? Sure, not many will choose this as they can’t afford to spend that sort of money, but some can and want to, but now it is not possible.
do you know how rules work?
Reading my current Motability contract dated 7th March 2023, it states in the duration of hire.
The hire term is for a minimum of three years on the start date of delivery of the vehicle (the Minimum Hire Term) , but continuing thereafter until 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 Contract Hire Terms and Conditions.
What gives Motability the right to change terms in the agreement without prior notification.
A law unto themselves.
Reading my current Motability contract dated 7th March 2023, it states in the duration of hire. The hire term is for a minimum of three years on the start date of delivery of the vehicle (the Minimum Hire Term) , but continuing thereafter until 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 Contract Hire Terms and Conditions. What gives Motability the right to change terms in the agreement without prior notification. A law unto themselves.
This was exactly the point that I made to Motability. One party cannot change the terms of a contract unilaterally without gaining the agreement of the other party and giving them the option to terminate that contract penalty free. Thankfully they backed down when I made this point, but others who took them on over this were unsuccessful, maybe because they did so formally.
“or the date on which this Agreement is terminated in accordance with the terms set out in Contract Hire Terms and Conditions”.
I suspect it allows them to stop the 1 and 2 year extension. If not then!
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