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Do members think that there would be any interest in restarting the system that the Government and Motability had in the 80s. Where the DLA/PIP/ADP person bought a car from a Maker/Dealer with a Motability agreed discount and the customer paid the Advanced Payment, higher than we would pay and your disability payment which is a standard amount went to pay the remaining amount towards the remaining cost of the car after the AP, but you own the car at the end. I assume similar to most leasing deals, but instead of paying a final large payment to buy the car, you paid the AP up front.
The differences is,
You pay your monthly benefit through Motability (who pay the dealer/Manufacturer over say five years. After all Motability are five banks, so they should know how to handle it.
Cost of the car – your five year benefit and Mutability costs = your AP
Obviously the dearer the car the higher your AP would be.
Cars come with years of warranty, so you would be paying for servicing.
You pay for breakdown cover and tyers.
You pay for Insurance which could be expensive but full cover unlike Motability.
The pluses, you get to own the car
You get the bigger choice of cars.
Your payments are automatically taken from your benefit, as is the case now.
Effectively it is not a car you are getting from Motability, it is a loan that is being paid back from your almost guaranteed Government paid benefit, unless you die or thrown off benefit, but that would always be the case back in the 80s.
You may find faults with the system and I don’t doubt there are, but it ran in the 80s, as I used the system at the time in 1984. It maybe wasn’t as profitable for Motability. To be honest, I don’t know why it stopped.
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Do members think that there would be any interest in restarting the system that the Government and Motability had in the 80s. Where the DLA/PIP/ADP person bought a car from a Maker/Dealer with a Motability agreed discount and the customer paid the Advanced Payment, higher than we would pay and your disability payment which is a standard amount went to pay the remaining amount towards the remaining cost of the car after the AP, but you own the car at the end. I assume similar to most leasing deals, but instead of paying a final large payment to buy the car, you paid the AP up front. The differences is, You pay your monthly benefit through Motability (who pay the dealer/Manufacturer over say five years. After all Motability are five banks, so they should know how to handle it. Cost of the car – your five year benefit and Mutability costs = your AP Obviously the dearer the car the higher your AP would be. Cars come with years of warranty, so you would be paying for servicing. You pay for breakdown cover and tyers. You pay for Insurance which could be expensive but full cover unlike Motability. The pluses, you get to own the car You get the bigger choice of cars. Your payments are automatically taken from your benefit, as is the case now. Effectively it is not a car you are getting from Motability, it is a loan that is being paid back from your almost guaranteed Government paid benefit, unless you die or thrown off benefit, but that would always be the case back in the 80s. You may find faults with the system and I don’t doubt there are, but it ran in the 80s, as I used the system at the time in 1984. It maybe wasn’t as profitable for Motability. To be honest, I don’t know why it stopped.
Motability Hire Purchase (as it was so titled at the time) stopped because basically the Financial Conduct Authority (FCA) changed lending rules post the 2007 Financial Crisis. Also, it was causing losses for Motability.
In a nutshell as offering Hire Purchase (HP) would put Motability as a lender, they would have needed to obtain a full FCA lending licence (they currently operate on a very restricted licence as they don’t directly lend due to the guarantee of receipt of funds from Veterans_UK, DWP and Scottish Social Security and they also retain full ownership of the asset). The hurdles to and cost required to obtain such a full lending licence were deemed unviable for the small number of customers using Motability Hire Purchase vs leasing.
They would also be required to carry out credit reference and affordability checks on all HP customers before making any such loan (the same as any commercial bank/lessor). It was deemed that many customers would not pass these financial hurdles.
When it did operate, Motability were also stung by customers not insuring their vehicles correctly or only insuring third party only as it was cheaper than fully comprehensive. Thus following write off situations, Motability were often left ‘carrying the can’. The optics of Motability pursuing disabled people through the courts to recover their losses not being deemed palatable or even viable due to the low income of many customers.
Similarly, due to the HP rule that a vehicle can be returned to the lender with nothing further to pay after a certain proportion of payments had been made, many were returned in less than optimal condition, meaning Motability made a loss on their disposal. Many returned vehicles had also not been serviced or had been unofficially modified. Again, pursuing disabled customers through the courts was not deemed palatable or viable at the time.
There was also the issue that offering such finance put Motability in direct competition with its owning banks who themselves offer car finance.
There was also a few other regulatory burdens in the mix as well.
Whilst I was in hospital this past couple of days having my leg stump reprofiled, I read the Motability Annual Report from back then (found in the bowels of an old portable hard drive). It was quite fascinating to read how much detail went into the rationale for changing to a ‘lease only’ scheme. Suffice to say, there is probably more chance of the Pope becoming a ‘Proddie’ than a HP type offer returning to Motability.
The Motability Hire Purchase scheme allowed you to buy a new or used car up to 5 years old and under 60000 miles I used this on a Daihatsu YRV automatic that was 2005 reg and you could have up to 5 years to have loan over. Now this would be good time for this scheme to come back.
My late dad used this to buy a white Ford Escort in the 1980s
I have ASD and thus have difficulty with social and understanding information, written and verbal. I process information in logical blocks, before I reply. Sometimes I'm right and sometimes I'm wrong.
I also have a corneal visual condition, which makes me visually impaired without daytime, or daytime bulbs, among other disabilities/conditions.From what I remember their interest rates were never very competitive, you could invariably get better finance deals.
Big Dave
As someone who actually had first hand experience of buying a car and paying the minority remainder of the cos over 3 years, by using my Mobility Allowance I have to disagree with some of what you say and also some of the misinformation of what is on the internet. Although I do agree a lot would be due to Motability and the dealers who leased Motability cars and got them back at the end of the lease, at that time to sell o , not making as much profit back then. The FCA could be sorted out as back in 1975 who would have thought Mobility Allowance and Motability would happen, in 76 and 78.
Back in 1970 who would have expected Attendance Allowance for looking after your disabled child or old granny sitting in the corner. As we know the Government can come up with whatever they want. You seen that during Covid, who would ever have believed that the Government would have paid people 80% of their wages for sitting at home doing nothing..
Although it was called HP it was different terms to commercial HP, and more in line with a credit agreement. You did not need a credit rating, as the payment was guaranteed by DWP or Funds for the veterans as it is in leasing from Motability.
If you had a wright off it did not affect Motability as you paid the insurance for the car you bought and that was your problem if you smashed up the car and Motability still got your monthly payments, so long as you did not die and people at that time were nearly all, if not all getting Mobility Allowance for Life.
You were paying by far the larger majority sum at the start unlike AP for leasing and only paying your monthly benefit to Motability than you would in leasing the car.
If as you say Motability didn’t want to take the person to court then how would they get the car back. and more likely the payments were still being paid to Motability for the advance loan anyway.
You could make alterations to the car, which I did with MG spoilers, or alloy wheels, or a sun roof, which was popular at the time. Buying did not have the same restrictions as leasing the car.
The condition of the car does not come into it and lease cars were sent back in bad condition.
Motability was meant to have been set up to be independent and should not have a conflict of interest with their banks.
.Bandit, I don’t think that the interest rate was uncompetitive and as with leasing Motability was the only one that could get the payments from source and Guaranteed.
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