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 - 26 through 50 (of 80 total)
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  • #164071 Reply
    Glos Guy
    Participant

    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.

    Thats not actually correct Sif. Only one third of those who are eligible join the Motability scheme. That’s why Motability are running TV ads to try to improve on that.

    #164072 Reply
    Dan G

    Hi

    Having worked in the vehicle leasing industry as a sales manager for over 25 years (Corporate, but the same rules apply), I can give you a bit of a steer:   You will have to forgive me if I repeat any of the above replies, I haven’t bothered to read them.

    Firstly, the agreement you sign is a “Contract Hire” lease.  At no point during the contract do you own the vehicle nor do you have the “right” to purchase the vehicle at the end of contract.  That in mind MB will happily provide you with a price to buy as it is an easier option for them. They need not worry about collecting the vehicle & taking it through auction.
    You have to remember MB are a business.  They are not going to sell you a vehicle for less than they can obtain in the current market.

    Your figures relating to resale value (RV) are inaccurate.  A 10% variance is massive.  Unless you are able to gain very specific & specialised data, a forecast of this type is finger in the air.  RV is make, model, type, extras, mileage & condition dependent (I won’t even go into the limited data on Hybrid & electric & any forecasts as to emerging technologies & their potential impact on RV). Furthermore different leasing companies of which MB is effectively one will have different risk appetite in RV forecast & this will also vary on the above factors mentioned.

    From your initial message I get the distinct impression you are expecting to lease a car very cheaply & then purchase it at less than market value after the lease period.
    Simply because this is a scheme designed for the disabled does not mean you can have your cake & eat it (expect to make/save a heap of cash).  If end of term purchase prices were so good MB would cease to exist.

    There are a number of benefits of the scheme that you have not recognised / considered.  Just a couple:  No credit check, the vehicle does not go against your credit.  The distinct ability to hand the vehicle back should your circumstances change & many more.

    You have chosen a vehicle in the upper end of the scheme & one with typically high depreciation (which is reflected in the advance rental as well as monthly rental).  With some exceptions the scheme is designed to be less £ attractive the higher up the scale you choose.  The Government does not want people to view the scheme as a “luxury” provided for at a significant discount (hence the policy change a few years back mainly due to the fact that premium vehicles were available at very attractive prices).

    In my view you need to realign your view of the scheme, it is not the golden chalice that perhaps you have been lead to believe.  Better deals are largely to be had with the cheaper vehicles.  There are however exceptions, trawl through the list & you will find out.
    Also look at cars nearing the end of their product lifecycle, due to be replaced in 6-12 months (eg; Kia Sportage).
    Pick up the phone & ring dealers, pit them against each other, they are able to provide additional discounts (£1500 of my first car £700 from the second, this is deducted from your initial payment).
    Check to see if they have any physical cars they need to “shift” or cancelled orders that have already gone to build.

    Quarter end, April & December are key dates as are prior to the 2 reg dates in the year.  Your timing can have a significant impact on what you can achieve.  You will not be able to reduce the rental amount but you can put a big dent in your advance rental payment & or have optional extras included.

    There is no doubt whatsoever that the scheme is a huge benefit to many people but as in life it cannot & will never be all things to all people.
    MB have made some mistakes in the past but they are now forced to run a tighter operation, ultimately pricing & vehicle choice is their call no matter how dissatisfied people may be in the scheme.

    The current market is very shaken at the moment for some reasons you will clearly appreciate & others you will not.  I have just chosen to extend my lease & wait to see what transpires as there are so many factors currently at play.  You may not have the option of time but you do have options.  Ultimately the scheme may not be appropriate for you.

    I hope I haven’t simply repeated other’s comments & that I have provided some value add.

    Regards

    Dan

    #164073 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.

    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.

    To be fair, if you want to make a (somewhat) accurate prediction, you can’t really take all models into account – different trims depreciate better/worse. According to honest john, the 3008 in roughly the correct trim (it’s GT Line, rather than GT) depreciated around 35%.

    I do agree that french cars (or in general cars that aren’t considered “premium”, albeit looking at peugeots prices..) appreciate worse than, for example, a BMW or Audi – but at least from my point of view, if we’re talking “investing” tens of thousands of pounds, the more accurate the prediction the better (and even predictions based on the actual numbers now might become very different in three years – i can’t even tell whether or not in three years the used market calmed down, because i don’t trust that the shortage will be entirely over by then).

    That’s just me though, since i’m not giving financial advise (and neither are you), it’s just a different view on prices, probably influenced by what we actually would pay.

    One thing though: for Kim, what the dealer asks, is what she has to pay, according to others – dealers don’t haggle with “us”.

    #164074 Reply
    Rene
    Participant

    You have to remember MB are a business.

    Bit nitpicky, but this is wrong. They’re not a business, they’re a public-private partnership charity. It’s probably (most definitely, i’d wager) run like a business, but still.

    #164075 Reply
    Glos Guy
    Participant

    Dan G – An interesting perspective, but I believe that your assertion that better value is at the lower end of the market with Motability is contradicted by the facts. As stated in an earlier post (which you say you haven’t read) the biggest cost of running a Motability car is the sacrificed benefits which are circa £10k per year regardless of what car you get. As a result, someone leasing a £20k car at zero AP is paying 50% of the cost of the car. Conversely, someone paying £3k AP for a £40k car is paying just 32.5% which is significantly better value.

    #164076 Reply
    Kim

    Thanks again to everyone.  I have a lot to think about but the 3008 is definitely out of our price range and I at least want to get something that I have a chance of being able to afford at the end.

    I’m also going to ring Motability as I have some questions for them.

    #164077 Reply
    Kim

    It’s been puzzling me all evening because I was sure that when I was looking at 3008’s on the Peugeot website yesterday, I configured one that came out at around £32k, which is why I put it in the same category as the Qashqai.  I’ve just realised – that was the Petrol not the Hybrid.  But it’s not on the Motability website!  So does that mean you can only have a diesel (which the government are telling us they don’t want us to drive!) or a Hybrid?  Why can’t we have the petrol?  Or am I doing something wrong?

    #164078 Reply
    Kim

    I cannot for the life of me get the petrol 3008 to come upon the Motability website yet it appears online in Peugeot’s own Motability guide.  My melon is officially twisted. 

    #164079 Reply
    paul helliwell

    there have been reductions in cars at the moment maybe that the Peugeot website hasent been updated you can only order what is on motability site and that is diesel or Plug-in Hybrid – Petrol

    #164080 Reply
    Kim

    That’s what I thought.  Yet if I go on the Motability section of some of the Peugeot dealerships, they’re all offering the Petrol models.  This is just so frustrating, it really shouldn’t be THIS complicated and maybe this is the reason why, as someone said earlier, only a third of people eligible actually take up the offer.

    #164081 Reply
    Rene
    Participant

    Yeah, as was mentioned. In the last few months, a lot of cars, trims and engines got removed from the scheme due to a global semi-conductor chip shortage. Those brochures, from manufacturers and dealerships, all only get updated four times a year (for each quarter) – while adjustments are being made all year around.

    Meaning, the Petrol was available at the beginning of this quarter – but they have been since removed. The best way to check this is to go to “www.motability.co.uk” and use their search, which is always up to date

    In regards to the 3008 specifically, it’s happening with multiple manufacturers – removing the petrol options, because fleet operators get big discounts on PHEVs, meaning that’s where they make the most money. See for example the VW Golf, basically everything removed – apart from the 245hp Golf GTE.

     

    #164082 Reply
    Rene
    Participant

    As another option, have you looked at the new Vauxhall Crossland (not the Crossland X – the new crossland, with L shaped headlights)? £1449 in “Ultimate” trim, matrix LEDs, heated seats, 360 camera, automatic etc.

    Might be a potential contender in regards to buying after the lease, though there is quite a bit of piano black plastic in the cabin.

    #164083 Reply
    Dan G

    Correct, a registered Charity.  Trust me it means very little bar tax & accounting benefits (no tax on profits from trading).  MB is a business & like many in The UK a wealthy business.  Do you see them out on the high street touting for donations?  Yep very nit-picky!

    #164084 Reply
    Dan G

    Firstly it depends on just where you look in terms of price, there are some fairly expensive cars on the scheme with very reasonable advance payments.  I am sure you will appreciate people’s choice of car rarely comes down to a calculated “best value” but includes a significant emotive element.  I don’t suggest that cost is ignored but not to the extent of simply achieving best value against all other scheme cars. What will be a factor will be not necessarily actual but perceived value.  If people were to choose simply on “best value” they would select the most expensive vehicle with the lowest advance payment as per your example.  The fact that some people would not even pass a credit check to enable them to lease a vehicle, for them access to the scheme is their value.  Other people are simply not prepared/ not in a position. to pay any advance payment.

    Secondly you overlook the “cost” of the £3k deposit, the ROI or the deferred cost if you like.
    I think you should bear in mind the notion behind the scheme, the fact that many people are unable to simply “find” £3k.

    As the rental payment on most cars uses 100% of benefit, there will clearly be a calculation of best “value” to arrive at your notion of “the facts”.  Where your facts loose traction is with regards to the published price of the car.  So the £40k you use as an example, this in itself is a moving feast.  All vehicles have a quoted list price/OTRC.  The reality however is that this price remains as quoted despite the fact that the vehicle will be being discounted. The level of discount will vary but largely increase with product lifecycle (and other factors).  MB do adjust advance payments but not accurately to reflect the vehicles “real” price.  Once again risk appetite plays a role.  Thus identifying best value becomes almost impossible & choosing a vehicle via this method alone, a rare occurrence.

    I am confused re your calculations, higher rate award is something like £250 per month.  You state £10k per annum, I believe you intended this to read £10k over the whole term, ie 3 years.  Paying 50% of a vehicles new value per annum on Contract Hire would be outrageous.

    I guess the point I was trying to imply (& did so poorly) is that a proportion people seem to expect something for nothing, they want the £40k car for £500 advance rental & complain  when this isn’t so.  If someone is unhappy that the advance payment is £3k, they have many other choices.  One of those choices is simply to look at a cheaper, sorry more affordable car. Like everything else the scheme has to change in line with the market & unfortunately this mostly results in an increase in cost.

    #164085 Reply
    Glos Guy
    Participant

    Dan G – The sacrificed benefits are indeed £10k over the lease, not per year. It was very late last night! My point remains though and the examples that I gave correctly used the £10k over the whole lease. I understand the points you are making, but affordability / credit checks / desire to get a cheaper car etc are entirely separate issues to value. In my eyes, ‘value’ when it comes to Motability relates to how much it costs to be in the scheme versus what it would cost to go a different route, which is the exact issue that the OP was raising. You had stated that the scheme was designed to be less attractive the higher up the scale you go and I was pointing out that in fact the complete opposite is the case. I stand by that as it’s true! Discounts are a red herring as Motability Operations will secure them against all cars, so it doesn’t change that fact.

    BTW, I agree with you about Motability Operations (who we get the cars from) being a commercial business and a very profitable one. The charity is Motability, which is a completely separate entity.

    #164087 Reply
    Kim

    I just can’t have a Vauxhall, I despise them.

    The 3008 really is the car for us and most importantly, it’s the one my son (who the award is for) finds the most comfortable and it was his choice.  I really don’t want a diesel (I’ve got one currently, the first I’ve had and…bleuuurrgghh) and the hybrid is so expensive and will cost you more in petrol unless you keep charging it which is an extra job I could do without.   Trust the car we want to have been removed.  Honestly, that’s just our luck.

     

    If I wait until October, the start of a new quarter, might it be put back on?

    #164088 Reply
    Glos Guy
    Participant

    If I wait until October, the start of a new quarter, might it be put back on?

    Quarterly changes tend to be an anti-climax Kim. They rarely see any major developments in terms of new additions. The changes mostly relate to changes in Advance Payments, sometimes small adjustments and sometimes massive ones. The only common theme is that there is no logic to any of the changes!

    It’s a really bad time for the Motability scheme and its customers at present. Choice has never been worse. Over 4,000 cars to chose from in its heyday and now hovering just above 1,000 and dropping almost daily. Obviously most of the deletions in recent months have been related to supply issues (mostly the worldwide semiconductor shortage) so will be temporary, but none of us know when the cars that have been casualties will be reinstated to the scheme. I suspect that they all will return, but October may be a bit optimistic.

    #164090 Reply
    Not_Even

    Hi Kim,

    I can only comment from my experience and perspective of using the scheme over the years.

    The DWP made a decision on my daughter’s allowance when we were just starting the second year of the lease which meant that it was stopped and we had to appeal.  This was a long process and while Motability gave us some room to appeal/find a new car, an additional 4 months use of the vehicle, we eventually arrived at a point that it had to go back.  At the time we had a BMW X1 and the market value for the vehicle was between £21-23K (depending on age and mileage, specs were identical).  We asked for a purchase price and were quoted £17K – which was just beyond us at the time.  I’m not sure if this price was based on our circumstances (the DWP review/appeal process) but it might give you some indication of the “fair” potential purchase price (we were only asked to confirm mileage, not condition).

    I’m about to rejoin the scheme, I’ll be popping in to place my 3008 order today.  One benefit that is often overlooked with the terms of the MB lease is the mileage – 20,000 per year is generous.  If you look at lease, pcp, hp etc and slide the mileage option to the right the costs will change dramatically – probably closer to £600-700 per month before you consider the other costs for a 3008 hybrid.  Also, the maintenance is covered – the number of tyres alone that I’ve had replaced due to punctures (my luck is terrible) has been a huge saving (especially on a car with bigger rims).  The insurance is great, somebody drove into me and failed to stop (again, my luck is terrible).  I had the car collected for repair in one day and a decent courtesy car while it was away (although it has put me off of CVT autos for life). Everything was painless and kept my daughter moving – which was the key thing.

    You’re right to weigh up your options but I’d factor in all of the extras the scheme provides before making a decision. I hope this helps.

    #164092 Reply
    Lord Muc

    Kim, the clock on your allowance is already ticking, by waiting until October, and a possibly long delay before delivery, will eat into that time.

    Awards can be reviewed at any time, normally 6 months before the award ends, there was some wriggle room over 2020 because of covid. Please don’t get seduced by a shiny new car, car buying is emotive. In my case I don’t do many miles these days, I and don’t think, I will be staying on the scheme as its not worth it to me, the APs are too high for me, and too many brands are making you pay for extras in packs. My current car a bmw gran coupe, was a close call to staying on or staying, its purchase price was £26k, my old x1 was over £40k, ap was low last September 2020, with dealer discounts, but now its priced itself to high, even the leather interior, is an £1150 extra!  As has been said, it’s how you value convenience of the scheme, in my case, I shall use the allowance to fund my own car. I will replace my 2004 mb clk, which is still a head turner, with a cls or 2 seater convertible, my partners alfa mito 2009 is in superb condition, a fun drive, and costs are minimal, just mot and annual service, and the odd part. I tend to put new boots on all round at once, when I offers come up at kwick fit or costco.  The allowance easily covers maintenence costs on these cars.

    #164095 Reply
    Kim

    Hi everyone,

    Firstly, I cannot thank you all enough for taking the time to reply to me and share all your wisdom – you really really have helped me so much.

    After talking to my husband (and pushing him to get involved in the decision making rather than just saying “whatever you decide is fine” – if he were any more laid back he would fall over!) and talking to a nice guy at a different Peugeot dealership, we have decided to go for the 3008 Hybrid.

    It is my son’s car of choice and the award is for him after all and joining the scheme enables us to sell our current family car and bank the money.  We have calculated that we will save at least £4K over the 3 years in tax, insurance, repairs, maintenance and fuel – and we have taken the time to use sensible and accurate figures in those calculations – so we will be putting that amount of money into the bank every month and adding it to the capital from the sale of our car.  So by the end of the scheme we should have a good amount (about £13k) to put towards either purchasing the vehicle or buying something else.

    I know it may seem that I’ve over thought it a bit but these figures involved are a lot of money to us.  We’re not wealthy but we are comfortable in that we have enough money coming in to pay our bills, have a little holiday every year (but not a flashy one!) and save a bit every month for things like Christmas.  We live to our means and have no debts (apart from a mortgage), if we can’t afford something, we don’t buy it.  I was an idiot in my 20’s and ran up stupid credit card debt and bank loans and learned the value of money the hard way.  I worked hard to pay everything back and swore I would never ever get into that situation again.   My credit rating is now the highest possible and the bank are constantly trying to get me to borrow money off them and get into debt but I just don’t want to go back down that road again.  Not now I have 3 children to care for and feed.  So as a result, I am very cautious with our money and need to make sure that whatever financial decisions I make are the best ones for us as a family.

    Having said all that, I think I am worrying a little too much about the future.  As my husband pointed out, as long as we keep the money from the sale of our car on one side and make sure we save the £4K on top then we are still going to have £13k to buy another car if we can’t afford to buy the 3008 at the end of the lease.  And you can get a pretty decent enough family car for £13k so we’re just going to go for it and deal with the future when it happens.

    Thanks again for all your help.

    #164096 Reply
    Gary

    just another thing that will ease the mind, because you need the car, if you have a fault, then you will be provided with a suitable hire car whilst the car is in for repair.

    It isnt something I’d considered before, but having been without our car for 10 weeks, and still no forecast of when we will get it back, we couldnt have managed if it was our own car, as we wouldnt have been able to cover a hire car for so long.

    #164097 Reply
    Rene
    Participant

    I think that’s the most sensible approach (as i said from the beginning) – and i do think the 3008 hybrid certainly is a good choice. I don’t think plugging it in will be much of a hassle, and with around 35 miles electric range it will cut into your fuel bill too, being able to do quite a bit of stuff for “free” (i understand electricity isn’t free, but it’s certainly cheaper than petrol). Not to mention that ASDA, Tesco etc depending on your location also offer free charging.

    Just remember that you can call motability for a free charging point. It’s not necessary, but certainly nice to have.

    BTW, I agree with you about Motability Operations (who we get the cars from) being a commercial business and a very profitable one. The charity is Motability, which is a completely separate entity.

    I was gonna say yesterday that apparently we haven’t established that it’s not MB that is leasing the cars, but MOG (Motability Operations Group), plus a third entity which is also a registered charity (Motability Tenth Anniversary Trust) – but it’s not worth the effort, also didn’t want to derail the thread.

    I just can’t have a Vauxhall, I despise them.

    Yeah.. Wouldn’t say i despise them, but in the end, similar sentiments prevented us from looking at it too. The Dealership was right next to Peugeots when we drove there to look at the 3008, and we talked about it – and when we were there, we were like, nah.. just nah.

    although it has put me off of CVT autos for life

    CVTs are just bad. My aversion against CVT started with an Escort Ghia CVT 25 years ago – there’s just nothing good about them. The newer ones with “simulated gearchanges” like the Qashqai are slightly better, but still awful.

    #164100 Reply
    Glos Guy
    Participant

    Kim – For what it’s worth, you come across as an extremely sensible, rational and responsible person. On that basis, I have no doubt that you will make it work, whatever the eventual outcome. In a way it’s a win win for you. If you aren’t able to stay in the scheme long term it will be because your sons health has improved, which will be the best news of all. I’m sure that we would all hand our Motability cars back in a heartbeat if our health (or partners health) could be restored. Cars are just cars at the end of the day and I say that as someone who is a car lover!

    #164101 Reply
    Kim

    I didn’t know that MB provide a charging point for free!  Even for a Hybrid not a full electric?  I was expecting to have to buy one.

    #164103 Reply
    Kim

    Thank you, Glos Guy and you are absolutely right.  When my son was assessed for his PIP by the doctor and given the Enhanced Rate it actually upset me because it’s just another reminder of the struggles he faces every day and my heart breaks for him.  This is why I’ve stamped my feet and tried my best to get him all the help I can so that he can improve as much as is possible and live his best quality of life.   I myself have Type 1 diabetes and there’s pretty much nothing I wouldn’t give to be free of it.  You cannot put a price on good health.

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