New to the scheme and totally confused!

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  • #164034 Reply
    Kim

    Hi guys,

    My 16 year old son has become eligible for the Motability scheme so we are due to sign for a Peugeot 3008 Hybrid GT which we are having to pay around £2750 towards.  This is a lot of money for us but we planned on buying the car at the end of the term as we had been told by the ‘Motability Specialst’ at the dealership that Motability are “very very generous” with their settlement figures.   However, I’ve been reading on this forum and am horrified to find that this doesn’t seem to be the case AT ALL!

    I do not think my sons award will be renewed as I think by then, he will be in a better position neurologically (fingers crossed!) which is why we intend to buy the car.  If he IS awarded it then he will get a car for himself so again we would be looking to buy the old one.

    So considering we are giving up around £10k in benefits plus putting another £2750 in at the start we are basically spending £13k on 3 years of motoring.  That’s around £370 a month and we will have nothing to show for it at the end of it.  I can actually BORROW £13k from my bank over 3 years and it’s only £388 a month!  And whatever car I spent it on would actually be mine at the end of it!

    I was told we would be offered the car at roughly it’s current auction price which is usually around 40-50% of the initial purchase price.  So we did the maths that the OTR for the Peugeot we are looking at is around £40k.   So after 3 years we would be offered the car for around £16k-£20k.  Making our total ‘spend’ on the car £29k-£33k which is okay for a car of that initial value and we know it’s been looked after.  However, after reading on here I just don’t know whether it’s even worth it.  It would financial idiocy for us to give the car back after 3 years but if they offer us a ridiculous price then we will have no option.

    We are looking to upgrade our current family car but wouldn’t be looking at a brand new vehicle if it weren’t for the Motability scheme.  It sounds so good but when you start number crunching, it’s not actually financially beneficial for everyone and perhaps its not the best option for us which is disappointing.

    It’s such a big decision, I don’t know anyone on the scheme so have nobody to ask, I don’t trust the staff at the dealership and my husband’s contribution to the discussion is “Whatever you think is best!”  But I don’t know what to do for the best!

    Any advice you guys can offer me would be really really appreciated because the award has already started (Aug) and with the current wait time for vehicles I need to make a decision and quick.

     

Viewing 25 replies - 1 through 25 (of 81 total)
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  • #164035 Reply
    Serendipity
    Participant

    I would take with a very strong pinch of salt anything the dealership says on this matter, many years ago you were offered your former motability vehicle at a very advantageous price, that is certainly not the case now, you need to rethink all your calculations based upon that fact, good luck.

    #164036 Reply
    Rene
    Participant

    I can’t comment on the purchase itself, but i can tell you that your math is slightly off. You’d need to include tax as well as insurance in that price too, so you’re not paying £370 monthly on the car alone.

    #164037 Reply
    Kim

    Yes, Rene, you’re right but I did add that in mentally to the decision making process – even though I haven’t actually made a decision yet. I currently have maximum no claims bonus so my current insurance is £30 a month and that’s for fully comp with all the extras like legal cover and breakdown etc.  And my car tax is £155 a year.  So add those up for 3 years it’s around £1500.  Then even adding on another £1500 for MOT’s, services and repairs (which is WAY over what it would likely cost me) that still means that I’ve paid £10k out and will have nothing to show for it at the end.  It’s like renting instead of paying a mortgage.  If I was going to buy the car at the end of the lease then it would make sense for us because all we would’ve done is buy a new car and paid for it over 3 years plus a lump sum which added together will have saved us some money off the original purchase price.

    I’ve also just seen a rather worrying statement of the Motability section of the dealership website which says that at the end of your lease you will NOT be given the option to buy your vehicle.  I wasn’t aware that the dealership was able to stop you buying your vehicle if you choose to!  Here’s a link to it https://www.stoneacre.co.uk/motability-can-i-buy-my-motability-car

    #164038 Reply
    Kim

    Thanks, Serendipity.  I hate car sales staff for this very reason.  Can you EVER believe a word they say?  I’m surprised they can even lie straight in bed.

    #164039 Reply
    Kim

    Rene, I also need to factor in that I will have lost my maximum no claims bonus when I leave the scheme which is worrying and will no doubt put my insurance up.

    #164041 Reply
    Elliot
    Participant

    The only benefit to buying the car at the end of your lease is that you know what has happened to it from new. The price Motability will ask will be no different to what you could pay for the same car elsewhere, yet when it goes to auction they will get nowhere near that price.

    #164043 Reply
    Lord Muc

    Kim, the key here, is, if your benefit is not ren

    #164046 Reply
    Rene
    Participant

    I have never understood how it’s so expectable to give up 3years benefit towards motability and still have to pay thousands of pounds for a car of choice.. Lots here seem to think it’s fine, seems very strange to me though.. lower end smaller should be much cheaper IMO…

    On the latter we absolutely agree. Things like Corsas, Fiestas and whatnot (cars that are basically under £17000 to buy) should not require the entirety of the mobility payment.

    The cars that i’m looking at, not so much. Kim is correct in his math, but you’d need to see the other side. The car he’s looking at is £400 per month for private – with £5000 cash deposit, for a total of £11000 deposit (£6000 come from Peugeot). That doesn’t include tax, nor insurance, nor repairs (in 2.5 years, i saved over £600 in damaged tyres alone), and it still requires a £20000 end-payment. Over 47 months. For a total of (an unbelievable, for a Peugeot) £49000. This is where this argument here falls apart:

    That’s around £370 a month and we will have nothing to show for it at the end of it.  I can actually BORROW £13k from my bank over 3 years and it’s only £388 a month!  And whatever car I spent it on would actually be mine at the end of it!

    Yes, that’s correct – the issue here is that you’re looking at a car that costs almost £50k leased, not 13k. Or, if you want to just lease the car (like motability), just with the option of buying it, you’re looking at £23.500, not including tax and insurance. And that’s not even the top spec 3008.

    The one thing where i unreservedly agree with Kim is the stupidity in regards to no-claim bonuses (or the fact that you potentially lose them when you go motability), and the fact that driving a motability car doesn’t actually count towards those.

    In the end, the math shows that you’re better off with a motability car, unless you “need” to buy it afterwards (i can’t speak from experience there, only from what i’ve read – and the general consensus is that there’s no benefit to it).

    #164047 Reply
    Lord Muc

    Kim, the key here, is are you confident your allowance will continue when it’s reviewed. If not, use the benefit to fund a personal car purchase, or put it toward a holiday. The dealer has rather knowingly or otherwise given you incorrect info. The purchase price from motobility will be retail, forecourt, price, and with no warranty. When you hand it back, its not that easy to buy it from a dealer, it could be sent to auction, there are lots of unknowns. Its very easy to be sucked into a shiny new car, but the scheme doesn’t suit everybody, as if you lose your allowance, you have nothing to show for it. The used car market is on fire at the moment, making a decision even harder. Be careful, adding extras, and paying high AP.

    #164048 Reply
    Rene
    Participant

    Oh yeah, i forgot about that part. I’d be washing that dealers hair properly – either the advice was, as mentioned, deliberately false, or he doesn’t actually know how the scheme works, or he has a “crooked” way to deliver his promise.

    Neither of these options is great.

    For fun i had a look at used 3008s, the cheapest i’ve found (in the spec you want) after a admittedly short autotrader search was £38.000. Of course not three years old yet (it only got facelifted.. this year? Or end of last year), but even the old model goes up to £35.000.

    It’s probably the absolute worst time to buy a car currently, in terms of prices. Having the option on a cheap (ish) lease for a high end car is probably the best outcome you could ask for – use it up, and then, after 3 years when the market has (hopefully) calmed, have another look.

    #164049 Reply
    ajn

    When the car is described as dealer full service history, are there ever any checks that the work has been carried out at all or is it all based on the dealer stamp in the book..

    #164050 Reply
    Glos Guy
    Participant

    Kim – You are quite correct that the Motability scheme isn’t the no-brainer financially that so many people seem to think that it is, especially if you have the financial means to buy privately. This site isn’t entirely representative, as we are all using the scheme so are generally supportive of it, but twice as many people who are entitled to join the scheme decline to do so, which is telling.

    I ran a brand new top spec BMW 5 Series privately at the same time as a VW Tiguan from Motability and the two cost about the same to run per year, even though the 5 Series was a far better car. That’s taking into account all costs (depreciation, servicing, insurance, road tax, tyres etc). What Motability does give you is peace of mind, but at a cost. As you correctly identify, the biggest cost by far is the £10k sacrificed benefits. On that basis, the most expensive cars on the scheme make the most sense financially. As you rightly say, the £40k Peugeot will cost you £13k (in sacrificed benefits & advance payments). That’s 32.5% of the cost of the car. Someone leasing a £20k car with zero AP is paying £10k (in sacrificed benefits) which is 50% of the cost of the car. A huge difference

    Only you can decide whether or not it’s worth joining the scheme if you think it will be for a short period only. However, to reiterate what others have said, the end of lease purchase prices are way too high for a car that’s sold as seen with no warranty. Basically, they want to deter people from leaving the scheme. If you do join, most insurance companies will honour your No Claims Discount for 3 years and others may take account of your (hopefully) claim free period with Motability.

    #164053 Reply
    Kim

    Thank you to all those who have replied, I really appreciate it and you have given me food for thought.

    I am 99% certain my son will not get Enhanced PIP next time.  His condition is one that is very slowly improving with therapy and various treatments and although he will never be cured, he should be improved enough that he will no longer meet the requirements for the Enhanced Rate.  So this is a one time thing for us.  Which is why I’m wondering if it would be better to just put the money towards car finance and buy a car privately.  I know it doesn’t come with car insurance and all the bells and whistles that Motability does but at least I know at the end that we will have a vehicle that is ours.  Of course it won’t be the same vehicle  – we won’t be buying a brand new 3008 – but we could still get a nice car that would meet our needs and we have a friend who is a mechanic who repairs and services all our cars for us at a very reasonable price.  (I pay cost price for genuine parts and he charges me £10 an hour labour!)

    However, Rene, you have made me think about it in a different way.  Although we may not be offered a ‘cheap’ price for the vehicle at the end of the lease, it should be no more than ‘fair market value’ which, if you take the amount paid out by us over the 3 years plus the final lump sum, should not come to more than the original purchase price.   So effectively, it’s like buying the car on 0% finance over 3 years.  Would you say that’s a fair assessment?

     

    Has anybody had the chance to look at the link I posted earlier?  Because I’m still not clear about whose decision it is as to whether or not you are allowed to buy your car at the end of the lease.  The Nissan dealership told us it’s nothing to do with them – it’s an agreement between Motability and the customer.  Yet I’ve read in other places that the dealership has first refusal on it!  The Motability website doesn’t mention this, it gives the impression that you will be offered the chance to buy.

    Its also worth mentioning that by the time my son’s award ends, we will only have had the car for 32 months so will be terminating early.  How that affects the numbers I’m not sure because again, everyone I ask at the dealerships tells me a different story.

    #164054 Reply
    Kim

    Thank you, Glos Guy, more food for thought.  I just feel so confused and as it’s such a big decision financially, I’m feeling incredibly overwhelmed and anxious about it.

    The fact that the vehicle is a Hybrid and a 3008 will probably mean it will hold its value well which will obviously only make it more expensive for us to buy.  I’m wondering if we ought to stop for something a bit cheaper…

    #164056 Reply
    Rene
    Participant

    However, Rene, you have made me think about it in a different way.  Although we may not be offered a ‘cheap’ price for the vehicle at the end of the lease, it should be no more than ‘fair market value’ which, if you take the amount paid out by us over the 3 years plus the final lump sum, should not come to more than the original purchase price.   So effectively, it’s like buying the car on 0% finance over 3 years.  Would you say that’s a fair assessment?

    I genuinely can’t answer that. I potentially could call our dealership on monday, and inquire with Ian (fabulous guy) about options for purchasing our current car (lease running out in march, and it’s our first mota-car). It all comes down to the price you’ll be offered at the end, if you get offered a price at all.

    This would require you to trust that everything stays as is, that the dealership honours the agreement etc, though. To me, trusting anyone who makes money off of me is, well, it needs to be earned, lets put it that way. Now. If i’d do some (basic, and potentially misleading – this isn’t financial advice) math looking at the current situation..

    There’s no “latest model” 3008 used around that are 3 years old, since the model itself only got released either this year or very end of last year. It fetches around £35.000 to £39.000 (ish), with the higher ones being basically new (less than 3000 miles, MY21 etc). Assuming we’re talking the GT300, not the GT225 (there’s no 3008 for £2750 AP, so i assumed GT300 plus dealership cashback). My best guess would be that the car will be around £28.000-£32.000 after three years (it’s hard for me to tell, since PHEVs lose value slower than normal ICE cars). If you get offered fair market value, i.e. around £30.000 for purchase, then effectively yes, it’s a bit like 0% finance for the first three years, if you then buy it. Keeping in mind that the “final lump sum” basically would just be the market value as a used car. Which would take the GT300 to, depending, to 13000 + 28000-32000. Which would be cheaper than flat out buying it, or leasing it privately.

    The catch of course is that you’d need to gamble on the “fair market value”. If the used market in three years looks like it currently does, as in, a fiery mess with prices soaring, then it might be close/financially unwise.

    It’s the gamble part that would discourage me personally.

    Another option entirely would be to run your current car for the next three years and “pocket” the mobility portion of PIP. You’ll be saving up £13000 over the next three years. Put another 7k towards it via loan, and there’s a good range of very decent, used cars available for purchase.

    Just as a thought. I am in a different situation than you, i can only speak for myself – for us it wouldn’t make sense to buy a car right now, and in fairness, we wouldn’t want to buy our current car either (few issues here and there).

    One other thing: make sure you actually could purchase the car after an early termination in the first place, i’m not 100% certain that this would be the case. I know you get your money back pro rata (both AP and good condition bonus). The webpage says this:

    in case of an unsuccessful reassessment, but i can’t comment on how accurate this information is (despite being from their webpage directly).

    #164057 Reply
    Rene
    Participant

    Thank you, Glos Guy, more food for thought. I just feel so confused and as it’s such a big decision financially, I’m feeling incredibly overwhelmed and anxious about it. The fact that the vehicle is a Hybrid and a 3008 will probably mean it will hold its value well which will obviously only make it more expensive for us to buy. I’m wondering if we ought to stop for something a bit cheaper…

    As an unrelated sidenote, you need off-street parking for a PHEV (rather, for the charging point, you’re legally liable if you granny charge at the kerb and someone flops over the cable), so if you don’t have that (i assume you do, just pointing it out), a PHEV is pointless already anyway.

    That said: a Quashqai would probably make more sense if this is the route you want to be taking, or maybe a Hyundai Tucson, both of which, i’d argue as a layman, will lose more value over the three years than the 3008. Again hard to tell since they’re all new models, but that’d be my guess (purely by not being PHEV already).

    #164059 Reply
    Lord Muc

    Kim, if you wished to buy the car at the end of the lease, you would normally inform motobility, towards the end of the lease, around 3 months? And they will ask you for the mileage, they then will get a price to you. There is no discount or negotiable terms, and they may quibble, about repairs and mots, and tyres at this point. As far as i know the dealer doesn’t get first dibs. It maybe, if you return a car to a dealer, they may decide to keep it, trade it on or auction it, depending on market conditions at the time. You could of course tell them you would be interested in buying it back and see what they say. However you are still taking a gamble on what is now and what will be in 3 years, motobility can change their policies, such as the old HP option. It’s not in their interest to sell cars, they want you to join the scheme and stay on it, just look at the expensive tv and radio ads at the present time.

    #164060 Reply
    Glos Guy
    Participant

    Kim – I just checked and Peugeot 3008’s depreciate by an average of 57% over 3 years. A PHEV will fare better than average but is still likely to be at least 50%. In the scenario that you are describing, if you are leasing a car with a view to buying, French and Korean cars (for example) depreciate by more than, say, German cars, so that will work in your favour. Personally, given the high prices that Motability ask and the lack of warranty, I wouldn’t recommend this approach, but I hope that these figures help your calculations. Some manufacturers such as Hyundai offer 5 year warranties so you would still have a couple of years left at lease end. All food for thought!

    #164061 Reply
    Kim

    Thanks again, I really do appreciate your advice and expertise.  I need to read it all through several times and digest it properly.

    As Lord Muc pointed out, it’s the gamble.

    Rene, we have looked at the Qashqai and I agree, I think that will be a better option for us.

    #164062 Reply
    Rene
    Participant

    What did you check exactly, just the car itself or spec?

    A 3 year old GT Line (petrol only) is on average around £21.000 (lowest 17k, highest 25k). That’s a slightly lower spec car, with a 1.2l petrol, and pre-facelift. That very car was £26.000 new as a manual.

    Your 57% strike me as rather odd, considering that even if don’t take the average price, but literally the cheapest 3008 GT Line MY18 on autotrader, you’re looking at around 35% depreciation.

    #164063 Reply
    sif

    Its not clear cut in that the advantage of Motability is not so great as in the past, but the fact that most disabled people who are eligible for it use it, suggests there is still an advantage for most people with most cars.

    #164064 Reply
    Rene
    Participant

    Thanks again, I really do appreciate your advice and expertise. I need to read it all through several times and digest it properly. As Lord Muc pointed out, it’s the gamble. Rene, we have looked at the Qashqai and I agree, I think that will be a better option for us.

    It’s a lovely car actually, we are very tempted – if only i could get over my hatred for CVT gearboxes. In terms of spec (and very obviously, price, especially if you’re considering to buy it), the Qashqai is certainly the better option as Tekna+.

    • This reply was modified 4 days, 17 hours ago by Rene.
    #164067 Reply
    Kim

    We were actually very close to buying the Qashqai in the Tekna spec.  (The Tekna+ was just a bit too pricey for the AP).

    The spec 3008 we were looking at was the 225 in GT which is £2600 AP and we were paying £150 for the vertigo blue colour which is where the £2750 came from.

    The Qashqai Tekna is £2000 but the price they gave us was just a bit more because of something else we wanted, it might have been the colour.

    I know it’s only a guess, but what would you expect the price to be for that after the lease?  Around £14k-£16k?  That would just about be doable for us but no way can we be going up to the £20k mark which is what the 3008 will be.

    #164069 Reply
    Glos Guy
    Participant

    What did you check exactly, just the car itself or spec? A 3 year old GT Line (petrol only) is on average around £21.000 (lowest 17k, highest 25k). That’s a slightly lower spec car, with a 1.2l petrol, and pre-facelift. That very car was £26.000 new as a manual. Your 57% strike me as rather odd, considering that even if don’t take the average price, but literally the cheapest 3008 GT Line MY18 on autotrader, you’re looking at around 35% depreciation.

    Thats the average for a 3008 Rene. Not model specific. What dealers ask and what they get are two different matters. 40-50% depreciation is pretty normal after 3 years for most cars and French cars aren’t known for strong residual values.

    #164070 Reply
    Rene
    Participant

    £20k is rather optimistic if you look at the prices for the older model from 2018 in higher trims (GT Line). And that’s not PHEV. But that being said: i’m no expert. I just had a look at autotrader and HonestJohn (https://www.honestjohn.co.uk/used-prices/Peugeot/3008/?q=GT+Line), which shows the old model at around 30% to 35% depreciation after three years, not 57% (that particular model was £26000 in 2018 new).

    I’m actually surprised that they charged you for a colour, may i ask what you were looking at? A pearlescent paint (i think it’s the white)?

    Also, my numbers earlier of course would need to be adjusted for the GT225, i was under the wrong assumption there, so do take that into account.

    For the Tekna:

    https://www.honestjohn.co.uk/used-prices/2018/?q=Tekna

    I do think around £15k-£16k is not unrealistic after three years, but again: i’m neither an expert, nor in the position to give financial advice. It still would be a gamble, especially if the used car market doesn’t calm down.

    What i’m wondering: does it need to be an SUV? Because if an Estate would do, then you’d have considerably more options (like the SEAT Leon Estate PHEV).

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