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Question to all, how would you change/upgrade the current motability system if at all
WMCforum posted on the cars on scheme thread that the Dacia spring joined today with “ Option to get car with £500 credit on a Go Charge card increases the weekly payment from £60 to £63.20.”
I really like this, I feel like motability will have to innovate a lot more if they really want to go full steam with electric cars
I’ve mentioned this before but something else they could add is giving the option to lowering the AP and adding a form of direct debit that is outside of mobility payment, as we saw today the i4 joined again this time at 7.5/8k, I’m sure some wouldn’t mind bringing down that ap to 5k for example by adding £70 a month over 3 years
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Think I’d rather wait until the next quarter when the AP will drop or I’d pick another car.
What they could do is have no difference in the AP between a manual and an automatic car… different trim levels have different APs, different AP if petrol, diesel, hybrid or BEV of the same model, different AP if 2 or 4 wheel drive but not the gearbox.
I don’t think that they will ever go down the route of paying part of the AP and the rest in instalments, primarily because of the numbers of cars that are returned early and also the risks of people defaulting on payments.
The Dacia Spring’s AP is below the totall allowance, so there’s room to wiggle about with the figurers. However, when you look into it, its not all that its cracked up to be, as the Spring is a city car, with 140ish mile range and charging, is a maximum of 30kW. Then there’s the fact, most leaing a BEV, take advantage of a free charger offered.
The principle of the offer good, when you consider your getting £500 worth for £480 and the offer in paying in small chunks each week, rather than a total outlay. It would be more suited to long range BEV’s but, there allready at the total allowance, which is a guaranteed payment, that can be claimed back each month. Anything other would require a direct debit or similar, with the potential of missed payments. Such a scheme could be added to the AP, as an option but, it would require full upfront payment and there are better cards around if the user wishes to do this.
I dont know about that scenario.
Its putting the onus on the customer to cough up more cash, which is wide open to abuse by manufacturers.
Better the onus is on the manufacturers to make the cars affordable and competitive. If they dont deliver the customer goes elsewhere.
Its like the Ioniq 5 upgrade circus recently, some had enough of the shenanigans and went elsewhere
If Motability wants to innovate and offer its customers a wider choice, they could open the scheme up to 2nd hand motors, max 2 years old, something like that. You would certainly have Tesla’s, range rovers on the scheme and probably much cheaper.
The other issue about phased payments is that it makes Motability a lender, governed by all sorts of complex financial legislation.
I’d love to see second hand cars on the scheme, especially if it means models way above what is presently offered, but I can’t see that happening either. The simple reason being that Motability gets a block VAT exemption which means they are paying second hand prices anyway! Besides, VAT exemption only applies to brand new cars.
Yeah it’d be complicated, I went to a Aston Barclay car auction recently and most the cars there were cancelled motability leases
yes I’d love to see used cars on here too, more choice the better
One idea I pitched to Motability a while back was for them to set up a subsidiary entity similar to a credit union.
Working loosely on same principle as the government help to save scheme you get a 50% bonus on what you saved over the course of 4 years.
So £2000 saved in 4 years you get a £1000 bonus.
Won’t work for everyone but those disadvantaged by some of the rules of grants it may help bridge some of the gap.
For long term customers, could be used as a sign of credit worthiness to offer a level of credit on the AP
The other issue about phased payments is that it makes Motability a lender, governed by all sorts of complex financial legislation. I’d love to see second hand cars on the scheme, especially if it means models way above what is presently offered, but I can’t see that happening either. The simple reason being that Motability gets a block VAT exemption which means they are paying second hand prices anyway! Besides, VAT exemption only applies to brand new cars.
Due to the way Motability get the vat exemption (it’s actually a rebate rather than up front exemption…)
The car needs to be on fleet for 3 years so cars that are terminated early Motability need to pay that vat on.
So it would work in motab favour to release some of the Early terminated vehicles.
One idea I pitched to Motability a while back was for them to set up a subsidiary entity similar to a credit union. Working loosely on same principle as the government help to save scheme you get a 50% bonus on what you saved over the course of 4 years. So £2000 saved in 4 years you get a £1000 bonus. Won’t work for everyone but those disadvantaged by some of the rules of grants it may help bridge some of the gap. For long term customers, could be used as a sign of credit worthiness to offer a level of credit on the AP
You have a very creative imagination, but things like this will never happen (for a multitude of reasons, some of which have already been mentioned) – nor should they. Who would pay for this magical bonus? The only answer would be the majority of scheme members who don’t qualify for it. So APs would go up even more than they have already. Call me old fashioned, but I prefer a system where we all take responsibility for what we can each afford and stick within our means.
One idea I pitched to Motability a while back was for them to set up a subsidiary entity similar to a credit union. Working loosely on same principle as the government help to save scheme you get a 50% bonus on what you saved over the course of 4 years. So £2000 saved in 4 years you get a £1000 bonus. Won’t work for everyone but those disadvantaged by some of the rules of grants it may help bridge some of the gap. For long term customers, could be used as a sign of credit worthiness to offer a level of credit on the AP
You have a very creative imagination, but things like this will never happen (for a multitude of reasons, some of which have already been mentioned) – nor should they. Who would pay for this magical bonus? The only answer would be the majority of scheme members who don’t qualify for it. So APs would go up even more than they have already. Call me old fashioned, but I prefer a system where we all take responsibility for what we can each afford and stick within our means.
Many years as a software engineer working on different government projects 😅….some of them felt like bailing water out of a sinking ship using a thimble 😅.
https://www.gov.uk/get-help-savings-low-income/what-youll-get
Help to Save worked fairly well.
The bonus could in theory be paid from the individual profit per vehicle rather than it going to one donation pot that some will never benefit from.
Tighten up the good condition bonus rules as often that is paid on cars that haven’t been looked after.
@jsh88 Government schemes are paid for by taxpayers. Any scheme, such as the one you propose, can only be funded from within the scheme, which we pay for. So if some gain an advantage over others, the rest of us end up paying for it through higher scheme costs, which wouldn’t be fair.
I do agree that cars returned early should be recycled within the scheme though. I appreciate that Motability Operations make a sizeable profit from every new lease, but it’s criminal the money that Motability waste by sending these cars to auction and, again, we all end up paying for that through higher APs. Years ago when I had company cars we could either order a new car of our choice, or choose from a list of cars that had been returned early (usually by people who had left the company). I had a Volvo 850 GLT 2.5 and a BMW 3 Series M-Sport Coupe for short periods of time under this scheme.
One idea I pitched to Motability a while back was for them to set up a subsidiary entity similar to a credit union. Working loosely on same principle as the government help to save scheme you get a 50% bonus on what you saved over the course of 4 years. So £2000 saved in 4 years you get a £1000 bonus. Won’t work for everyone but those disadvantaged by some of the rules of grants it may help bridge some of the gap. For long term customers, could be used as a sign of credit worthiness to offer a level of credit on the AP
I have to agree with Glos Guys posting above about it pushing up scheme costs which would have to be paid for.
Plus you would then tie Motability upto even more red tape legislation, both with the Financial Conduct Authority (FCA), where thier licence is currently restricted to vehicle leasing only. Also the Financial Services Compensation Scheme which all banks, building societies and even credit unions have to be members of (and pay for) in order to protect customer savings should Motability ever become insolvent:
https://www.fscs.org.uk/what-we-cover/
As for credit worthiness, Motability would still have to do both Credit Reference Agency and affordability checks on potential borrowers, regardless of how much and how regularly one may have saved with them (FCA regulations). As an example, in a probably worse case scenario, someone could have saved money in your ‘Motability savings scheme’ but only by such as banging all their other spending on credit cards and paying the absolute minimums on the cards every month.
In effect they are funding their saving by piling up debt – which only a Credit Reference Agency would pick up on and would certainly influence lending decisions. It is why everyone’s credit record with the main Credit Reference Agencies only records debt, not savings (as savings maybe funded by debt as in the above example).
So, a good sounding idea but in reality, a non-starter.
There’s a massive risk to Motability with bad debt if the AP can be reduced in favour of a credit facility. However, what if they offered a savings opportunity? In conjunction with a FCA recognised bank they could give a new customer or returning customer an option to add a set monthly amount from their daily living PIP, whether that’s £15 or £100 every 4 weeks. Then the bank can add a favourable interest rate and in 3 years time there’s a pot of money that can either be the AP or reduce it.
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
There’s a massive risk to Motability with bad debt if the AP can be reduced in favour of a credit facility. However, what if they offered a savings opportunity? In conjunction with a FCA recognised bank they could give a new customer or returning customer an option to add a set monthly amount from their daily living PIP, whether that’s £15 or £100 every 4 weeks. Then the bank can add a favourable interest rate and in 3 years time there’s a pot of money that can either be the AP or reduce it.
However, you are then creating a ‘two tier’ system, as not all those who receive the Enhanced Mobility Component (and use Motability), receive the daily living component.
So, those that do could save in the scheme, those who don’t cant.
Plus it would require changes at the DWP to manage the diversion of part of the daily living component to the ‘savings plan’ – good luck with that.
It may also set off a nasty case of the ‘law of unintended consequences’ at the DWP – i.e. If the person is saving up part of their Daily Living Component, do they really need it for ‘daily living’ needs?
That then gives ammunition to the former Conservative government’s Green Paper. Yes, the voucher idea possibly has been dropped, but Labour have not scrapped the Green Paper and if they could save a bob or two on the welfare bill in the current economic climate………..!
Perhaps now is not the time to visit that idea!
There’s a massive risk to Motability with bad debt if the AP can be reduced in favour of a credit facility. However, what if they offered a savings opportunity? In conjunction with a FCA recognised bank they could give a new customer or returning customer an option to add a set monthly amount from their daily living PIP, whether that’s £15 or £100 every 4 weeks. Then the bank can add a favourable interest rate and in 3 years time there’s a pot of money that can either be the AP or reduce it.
However, you are then creating a ‘two tier’ system, as not all those who receive the Enhanced Mobility Component (and use Motability), receive the daily living component. So, those that do could save in the scheme, those who don’t cant. Plus it would require changes at the DWP to manage the diversion of part of the daily living component to the ‘savings plan’ – good luck with that. It may also set off a nasty case of the ‘law of unintended consequences’ at the DWP – i.e. If the person is saving up part of their Daily Living Component, do they really need it for ‘daily living’ needs? That then gives ammunition to the former Conservative government’s Green Paper. Yes, the voucher idea possibly has been dropped, but Labour have not scrapped the Green Paper and if they could save a bob or two on the welfare bill in the current economic climate………..! Perhaps now is not the time to visit that idea!
The simple answer is to open the savings to all and include standing orders or automatic payments instead.
However, both the saving and loan versions stand the same two tier as many who do get cars can just about afford to run them let alone save on top, although there’s still a grant scheme for the really needy.
I was just thinking that a savings scheme opens up to charity or government support in the form of additional interest payable or tax free schemes (a Mobility ISA?) and that may be incredibly helpful for those with WAVs that require substantial AP and conversion costs.
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
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