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I appreciate that this is a Motability Forum, but I know that a number of contributors have purchased private cars and wondered if anyone can answer a couple of questions about the above scheme? We are considering leaving Motability and buying a used car, as the cars that we are considering are extremely expensive new and I don’t want to spend that much and take a big depreciation hit, but I thought I should consider this scheme as an alternative to buying used. I’ve read the HMRC guidance, but these questions aren’t answered and there’s no contact details to ask questions either, so I’m a bit stuck.
My wife easily meets the two main qualifying criteria, as she is a full time wheelchair user and needs a substantial and permanent adaptation, in that she needs a person hoist which is both bolted to the car and wired in to the cars electrics, so that’s a big tick. My questions are as follows;
1) Does the VAT exemption only apply to the base price of the vehicle, or does it apply to the total vehicle price including options? With the cars that we are considering, we’d want to add quite a few grands worth of options, so it would make a big difference. The guidance makes no mention of this whatsoever.
2) The guidance states that a nominated person can buy the car (my wife no longer has a driving licence as she can no longer drive due to her disability) and it says that lots of questions will be asked, such as who is paying for the car, who will it be registered to etc, but it doesn’t say what their stance is on this. In our case, I would buy the car and it would be in my name. Does anyone who has gone down this route know if that would be deemed acceptable?
Many thanks
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One thing that I forgot to mention was that the big advantage of having the disabled person as the registered keeper is that the car then also qualifies for free road tax which, these days – especially with expensive cars – can be considerable. Also, once the car has been purchased VAT free, you get VAT of all servicing and maintenance costs as well.
It all sounds great, but the stumbling point is the crazy prices of new cars these days. The car that I’d like is a BMW X5. I considered one 5 years ago and they were £65k then (inc VAT). Fast forward 5 years and they are now £82k, so add a few options and even with the VAT knocked off they are still £70k. Dealer discounts aren’t great (5% has been suggested) so I still end up at around £65k. I wouldn’t need finance, but would lose interest on savings, so the true cost is even more. Much as I’d love one, I’m just not sure that I can convince myself to sink that sort of money into a car, when the most I’ve ever spent on a car was £30k (which was a £40k car that I negotiated a 25% discount on). Maybe a better solution is to keep the Motability car as a (boring) daily and get an older ‘fun’ car, but I’m not sure what to get. Ideas on a postcard 😂
Depends on what you consider fun, and how much you, in the end, want to spend.
For my money, E46 M3 and E60 M5. Two of the most flamboyent engines of the last 30 years. And who doesn’t like a V10.
Failing those, i’d probably get something rare-ish, maybe hunt down an unmolested e30, Mk7.5 GTI, or something proper “exotic” like a 205 GTI.
Of course, as a big JDM fan, i’d be scouring through JDM lists too, lol. Maybe one gets lucky and a decently priced first generation GT-R (GPC10 Hakosuka) turns up, that would probably be the dream, for me.
Failing that: ol’ reliable. Miata. Cheap, still one of the best gearboxes to play with, not stupid fast (stock) but plenty. Always a good choice.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.Expensive if something goes pop.
edit:
Seeing the shape though, Z3/Z4 would be fun too. Or a BRZ/GT86. So many options, without knowing what you consider fun.. hard to make a guess. For reference, here’s what a close friend considers fun.
That’s his wifes car (it does have a nice interior).
He drives a Mitsubishi Evo 10 FQ360 as his weekend toy.
So.. suggestions without knowing where the focus lies/how you define fun, is a bit.. naff. 😀
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.Hi Glos guy,
Different scenario to you, as with Kennedy’s, a slow burn, late onset, hereditary MND, longevity is not on my menu. I looked into going VAT free, but it could saddle my wife with all sorts of hassle similar to the scheme, especially should I pass at an inconvenient time such as Christmas holidays. I wanted to mitigate some of the long list of onerous issues that bereavement brings. A Kodiaq is arriving at the docks any day to register in her name, the first time since 1973 that I will not own one, aside from the last eight years of MB. There is obviously a cost vs leasing, reduced by the car’s residual value, the next AP, £4000 p.a mobility pip allowance and peace of mind. She can drive wherever and whenever she likes without concerns of being for my benefit, especially in terms of insurance cover.
good luck to you in finding a fun car. My car nut brother has just swapped his second car Lotus Emira for a 911 Carrera GTS. Boys and their toys. Judgement has never been a strong suit!
In terms of what appeals if I go down the older car route. Aside from an Astra GTE 2.0i back in the 80s when I was in my very early 20s, I’ve never really been a ‘hot hatch’ sort of guy. Once I got to my 30s and beyond, the appeal was larger executive cars with decent poke. As examples, past cars included Rover 827 Vitesse 24v, Ford Granada Scorpio 2.9, Ford Scorpio 24v Cosworth, BMW 525i (3.0 litre), 530d, 750i Sport (4.4 litre 8 cylinder). Writing that list, it’s no wonder I feel that the Tucson is boring 😂
Over the years, dream cars (which I never owned) included the Jaguar XJR (back in the 80s and early 90s, when Jags looked like Jags) and, once I discovered how good BMWs were, the M5. Both of these could be options, but my concern would be maintenance costs. I should imagine that it would be easy to spend a small fortune if something major goes wrong!
Oh yeah. Particularly the E60 M5, if the V10 goes kiddywampus, you better have the lube for the wallet ready.
Same for the XJR though, except with those, you can almost guarantee that something will go wrong (either electrically or with the engine).
If you’re looking for more of a “sports-executive” kind of car, an Audi S5/S6 could be interesting. There are a few interesting Lexus’ about, too.
If you’re straight going to the 80s/90s (good era), i don’t think you’d be getting around some variant of german car – even then, they’re by now close to 40 (or over ) years old, got to remember that. They WILL require wrenching, spending and regular maintenance (as in, measured in thousands, not tens of thousands of miles).
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.Going back 40 years is perhaps a tad to far, though you don’t have an MOT to worry about if something falls off 🤣
Perhaps a modern classic or future classic, as they are now called thanks to the last Labour government. Even so you can’t keep the moths in your wallet,with such a car, but it would be somewhat easier to maintain. Even so, a level of commitment and dedication is required compared to a newer car.
My hopes remain coming across one of the last Rover 75’s 4.6 V8 in an equivulent exceptional condition to the V6 version, I recently gave to my daughter. The V8 Mustang shortblock, is fairly old school and simple to maintain.
Well I’ve just run an insurance quote for a BMW X5 50e M Sport. As it’s almost 500 bhp and group 50 insurance, and (embarrassingly) I had to declare an insurance claim from 4 years ago, so only had 3 years NCD, I was pleasantly surprised to see the cheapest quote came out at only £520 and there were plenty of other quotes for less than £650. Oh dear. I was sort of hoping that it would be thousands, in order to put me off the idea 😂
Not my understanding of “fun car” lol – never understood the appeal of stupendously powerful boats.
Unless i guess we’re talking Cayenne, but while they’re still capable in the driving department (comparatively), they’re ugly as sin.
That said, i don’t need to drive it – if that’s your thing, go for it. Certainly bucket list kind of car. For my money, at that price range, i’d very certainly be more looking towards a 911 GTS (either 991 or a higher mile 992), potentially even Targa.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.To be clear, the X5 is my ideal daily car. If we weren’t eligible to join Motability, there isn’t a single car on the scheme that I would buy privately, therefore any car that we get via that route will always be a compromise.
The X5 ticks all but one box for me. Having driven hundreds of cars from most mainstream brands, my preferred brand of choice is BMW. Their balance of driver engagement, performance, economy, handling, refinement and quality suit what I look for in a car perfectly. The X5 delivers all of this, but in a large luxury car that also has the benefit of the high seating position that suits both my back and my wife’s disability (as we need a person hoist and it’s easier for me to manoeuvre her in and out in a higher car).
The one box that it doesn’t tick, and it’s a big one, is price. Even with VAT deducted, it’s still more than I would ideally want to pay. I would really want to hand back the Motability car and use the £4k a year sacrificed benefits (plus AP) towards it. That’s why I mentioned a second option, which would be to retain the Motability car as the daily driver and buy a second hand ‘fun’ car as a second car, just for me. However, my definition of fun isn’t a small cramped sports car that is difficult to get in and out of. Whilst their handling will undoubtedly be much better, I prefer luxury with good performance.
Having watched a number of YouTube reviews of the new X5 50e, I was surprised at the universally glowing reviews and the smiles on the faces of the reviewers as they exploited the near 500 bhp and their positive remarks on the sound of the 3.0 BMW six-cylinder engine. That’s more than enough fun for me these days, but I’d want more than the paltry 5% discount first mentioned (plus 15% VAT exemption) to tempt me!
To be clear, the X5 is my ideal daily car.
Maybe a better solution is to keep the Motability car as a (boring) daily and get an older ‘fun’ car
Besides the point. 🙂
Further, could always look at the 30d. Same car, still “quicker” than a decent amount of daily drivers.
I wouldn’t daily a 911 GTS, but if we’re talking getting a “fun car”, then a barge isn’t even in the same room as my list for one lol.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.I have resurrected this thread as there have been some important updates and, most importantly, I need to make a correction to information posted earlier in the thread, when I said that the disabled person has to be the registered keeper. They don’t, but I’ll expand shortly.
I have commenced discussions with my local BMW dealer about a possible VAT exempt new vehicle purchased. I mentioned that the car would have to be registered in my wife’s name (I am the sole driver, but my wife is the disabled person) and their reply was that they didn’t think that this was correct and the car could be registered in my name but still qualify for VAT exemption as I am the nominated driver. I thought that I’d best call HMRC Charities Helpline again (the HMRC department that deals with VAT exemption for disabled vehicles) and I spoke to them this morning.
HMRC have now confirmed to me that I can buy the car and be the registered keeper (as the dealer had said) and all I have to do is complete the simple 2 page exemption form stating that my wife meets the VAT exemption criteria (she does) and that the car will be used mostly for her benefit (as stated earlier in the thread, it’s not exclusively as some people think). I already have it in writing from HMRC that I can also use the car for my sole purposes, and not always for my wife’s benefit.
Having clarified that aspect, I thought that I’d better call DVLA to check if registering the car in my name would cause a problem with the VED (Road tax) exemption, which my wife is entitled to (as is everyone who is entitled to a Motability car). Thankfully, that’s not a problem either. As with HMRC, they are happy that we can still claim the VED exemption, as it is the car that will be used by my wife when needed and I am her nominated driver. They also confirmed that the VED exemption also applies to the ‘over £40k luxury car surcharge’ of £425 for years 2 to 6 and (most significantly) the first year rate which, in the case of one car we are considering, is £5,490 😱
Finally, although HMRC had previously warned me that some BMW and Mercedes dealers were refusing to do VAT exemptions, my contact at BMW couldn’t have been more helpful and said that it’s no issue for them. They also confirmed that the VAT exemption applies to the base price plus all optional extras, future servicing and maintenance and they will even reduce the delivery and on the road charges to match what they charge Motability. Test drives are booked!
I thought that I’d share this important update, as I know that with the ever increasing APs, the removal of premium brands from the scheme, and the further adverse changes due in July, I am not the only person looking to leave Motability. It’s important to stress though that whilst the VED exemption will apply to anyone who is currently a Motability customer, in order to take advantage of the VAT exemptions on a new car purchase, the disabled person must be a full time wheelchair user who also needs the car that they travel in to be ‘permanently and substantially adapted’. In the case of my wife, we need a person hoist, which is bolted into the car, hence why she qualifies on both criteria.
That sounds awesome and rather comprehensive. I’m guessing where the first year VED is over 5 grand that the VAT saving is rather significant. Saving on servicing and everything else will be an added bonus and, more importantly, you’ve found one of the good salespeople, which can be a Godsend when dealing with unusual purchases like this one.
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
That sounds awesome and rather comprehensive. I’m guessing where the first year VED is over 5 grand that the VAT saving is rather significant. Saving on servicing and everything else will be an added bonus and, more importantly, you’ve found one of the good salespeople, which can be a Godsend when dealing with unusual purchases like this one.
Exactly. In truth, I hadn’t got my head around the first year VED rates (they have been introduced since we last bought a new car privately) and I had no idea how much they were. I also hadn’t appreciated that the ‘on the road’ prices that manufacturers quote included these sums so, if you are exempt from them, it can make a substantial difference. Obviously the more expensive the car the bigger the VAT saving, but also the discounts that you can negotiate (on top of the VAT exemptions) vary a lot depending on the model. When you finally factor in the VED exemption, the top of the range model, which for a retail customer liable for VAT and VED would cost around £20k more than the model I was looking at (so wasn’t even remotely on my radar) could potentially only cost me £5k more. That’s peaked my interest, so test drives have been arranged for both!
I’m glad, you have officially sorted firs year VED, rather than just took my word for it😂
Nominated driver, when you think makes alot of sense when you think of it (not everyon can or is able to drive) and is how disabled VED was applied to our private vehicle.
Glos Guy,
That aligns with my experience, with regards being the registered keeper of a vehicle adapted for someone else. In our case we bought a motorhome to enable our daughter to travel, since she is unable to fly after her brain injury. We paid for it from our own gratuitous care and expenses settlement after she won the 10 year battle with the Medical Defence Union.
The adaptations are quite substantial including a lift for access (the floor is nearly 4 foot off the ground!), even though she is not a wheelchair user.
In total we saved £60K so not to be sniffed at!
We’re just trying to procure a VW Transporter Shuttle on the Scheme to replace the unloved Mazda CX60.
I’m glad, you have officially sorted firs year VED, rather than just took my word for it
Nominated driver, when you think makes alot of sense when you think of it (not everyon can or is able to drive) and is how disabled VED was applied to our private vehicle.Please don’t think that I was doubting you @kezo as the dealer told me the same as you, but with something so critical, and HMRC guidance always being so ambiguous and open to interpretation, I wanted to get 100% clarity from the horses mouth, especially as the person there that I spoke to last time told me something different (as I posted here at the time). I didn’t want to get to registration day and find that I couldn’t buy the car as £25k worth of VAT and VED was suddenly added to the bill 😱😂
When I queried why I was told last time that my wife would have to be the registered keeper, he said that they usually advise this as it’s simpler and less dealers query it, but it is the dealers responsibility to VAT and VED exempt the vehicle at the point of registration (you can’t claim it back if you pay it), so if the dealer is satisfied that the nominated driver (and owner) is buying the car having legitimately met the criteria, then HMRC are satisfied that the nominated driver can also be the registered keeper. DVLA take the same approach when it comes to VED (at least their guidelines make that clear – unlike HMRC).
Glos Guy, That aligns with my experience, with regards being the registered keeper of a vehicle adapted for someone else. In our case we bought a motorhome to enable our daughter to travel, since she is unable to fly after her brain injury. We paid for it from our own gratuitous care and expenses settlement after she won the 10 year battle with the Medical Defence Union. The adaptations are quite substantial including a lift for access (the floor is nearly 4 foot off the ground!), even though she is not a wheelchair user. In total we saved £60K so not to be sniffed at! We’re just trying to procure a VW Transporter Shuttle on the Scheme to replace the unloved Mazda CX60.
That’s good to hear. Thank you for the further clarification of your first hand experience. I will say this quietly, in the hope that Rachel from Accounts (or her cronies) don’t frequent this forum, but I’m surprised that they haven’t put a cap on the maximum retail price for VAT exemption (or a CO2 cap on VED exemption). If I like the car and am tempted to treat myself to the top of the range model then, including the hefty discount that I should be able to negotiate, I would be saving almost £40k in total, thanks to the VAT and VED exemptions. I thought that was impressive, but your £60k saving makes me look like I’m not trying! 😂
Further important update which will be of interest to those who are eligible for VAT exemption on a new car purchase and may be considering leaving Motability.
When I first started exploring this option last year, the very helpful person at HMRC said that some BMW and Mercedes dealers were refusing to deal with VAT exemption sales, pointing people towards Motability instead. Since then, as we know, all the premium manufacturers have been ditched by Motability, due to Rachel from Accounts bowing to all the negative publicity about “work shy scroungers getting ‘free’ luxury car” (if only), so I thought this attitude might have changed. Besides, the car I am getting has not been, nor ever will be, available through Motability!
I live mid-way between two BMW dealerships that are in different motor groups. I had been agonising over which engine to get (PHEV, diesel or petrol) so have had four different cars on test drives between the two dealerships.
One of the two dealerships has now informed me that “they don’t participate in VAT exempt vehicle sales”. I have written to the CEO of that group asking why, and stating that I am concerned that this might be discriminatory, especially as I have written confirmation from HMRC that my wife meets the criteria, the car (with adaptation) meets the criteria and I (as the nominated driver) can buy the car in my name and use it for occasional personal use, not for the direct benefit of my wife (as we only need one car) – which is the same criteria used by Motability (I didn’t mention this last point to the CEO as it’s not relevant to the complaint).
Thankfully, the other BMW dealership (who I told about this experience) has no issue whatsoever about selling us a car VAT free (as well as VED free and a big negotiated discount on top 👍) and having now made my final decision I have ordered the car today 😅
Anyone else considering going down this route, who is also eligible, may wish to check at the very outset that the dealership is prepared to process a VAT exempt sale, before they get too embroiled in test drives, negotiations etc.
FI had been agonising over which engine to get (PHEV, diesel or petrol) so have had four different cars on test drives between the two dealerships and having now made my final decision I have ordered the car today
What did you order?
@glos-guy What did you order?
Morning @BigDave It was an agonising decision but, in the end, I decided that you’re only young once (and I’ve missed that!), you’re also a long time dead and for once I’m going to let my heart rule, rather than my head, so I’ve ordered the X5 M60i
In fairness, there was a degree of financial sense in it as well, as there are bigger discounts to be had on the M60i plus, of course, bigger VAT and VED savings, so it’s actually only costing me £3.5k more than the 40d (versus an rrp difference of £14.5k) and I should get the vast majority of that difference back come resale. Annual insurance is surprisingly only £88 more than the 40d (£658 v £570), but the biggest negative cost difference is naturally fuel. You obviously don’t buy a 4.4 litre twin-turbo V8 for its fuel economy 😂, but it will only cost me around £100 a month more to run than the diesel, which is a premium I can more than live with given the big differences between the two cars. As a friend said to me, we are at a stage in life where ‘smiles per mile’ is more important than miles per gallon!
Your advice along the way has been much appreciated and has helped shape what I am adding to the car. The M60i comes as standard with some of the options that I would have been adding to the 40d (e.g. Harman/kardon & Sun Protection Glass) but I’m adding Air Suspension, Technology Package, Comfort Seats, Acoustic Glass and 22” alloys. I wouldn’t have wanted wheels that big, but Mrs Glos Guy insists that black wheels look best with the red brake calipers and the exterior colour that she has chosen, and I have to admit she is right 🙄. I’m taking out a relatively inexpensive tyre and alloy wheel insurance though! I’ve managed to negotiate the 5 year servicing package down to £1,100 (oddly, the M60i servicing package is £1,640 inc VAT even though it needs more servicing than the 40d, the same pack for which costs £200 more?). The service pack is transferable to a new owner, so will further help resale value if I decide to change after say 3 years (when we can next get another new car with VAT exemption).
The one thing that I’m still mulling over is that I can extend the warranty from 3 to 5 years for £1,399 but it’s not transferable to a new owner (unless it’s a family member, which it wouldn’t be). It’s a very good price as, oddly, there are only 3 price brackets for these extended warranties and all 4×4 vehicles are the same price – so I can get the M60i covered for 5 years for the same price as a 1.5 litre X1! You have to buy it within 14 days of buying the new car though, and if you leave it until the end of the 3 year manufacturers warranty the BMW extended warranty is about £1,860 per year! Given what you told me about your Air Suspension on your X6, if I keep the car beyond 3 years it will be a bargain but, if I don’t, I will have lost the money 🤔
Incidentally, following what you told me about your air suspension, I went to a nearby BMW specialist and asked how often they get cars in with air suspension issues and what they charge. They said that the majority of failures occur after around 10 years and the damage is often caused by stones or debris being thrown up and puncturing the bags, hence why there are more failures on the near side. I’m guessing that you living on a farm doesn’t help in that respect! They also said that sometimes they have to change another component which also gets damaged when the air suspension fails (can’t remember what it was) and, if so, it becomes a £1,200 to £1,500 job, which was a lot less than I expected (although no doubt at a BMW dealer it’s probably about £5k)!
Congrats on your chosen model
Some advice regards air suspension. The area manager of St Johns use to live next door and of course we got quite close to them and as my although I mainly diverted into electrics, my actual trade is in electro-mechanical engineering. Back on topic it came about one day that their mechanic had retired and the new one would always contract air suspension jobs outs, so my neighbour at the time asked me if I could do anything, so I did for what ended up the next 9 years, untill my then neighbour moved to the amulance service as an LAO.
The air suspensin consists of 4 bags (one on each corner), compressor, 4 solenoid valves (one for each corner), control unit, regulator, filter/s for moisture & water.
A puncture of the bag, is the main issue. Road dirt (grit / gravel can cause the bag not to seal in the seat, overtime and can cause the bag to burst – This is less common in the early days.
The compresser, (tyre inflater) has a shity piston and rings in a dry bore (no oil). These can be prone to wearing out due to heat and continued use of inflating the tyre. Solenoilds and control units can fail at any time, but these should be covered under warranty.
The bags should be inspected as part of the service, getting a hose to swill the bags if you are abe too every few months will keep grime off.
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