Why do we pay any AP??

  • Creator
    Topic
  • #124908 Reply
    Carl

    This is a bit of a rant but why do we pay APs on any vehicles on mobility???    My understanding of the AP, is that it goes directly to the dealers supplying the mobility vehicles.

    But having recently made an order for a mobility car, I can see that the invoice is made out to mobility for the FUll PRICE of the vehicle!!  If I was to buy this vehicle directly from the dealership as a private individual, there are always discounts to sweeten the deal.  So essentially I would never be paying the full ticket price.

    So if the dearer ships are getting full value for their vehicle, why are we lumbard with paying APs as the dealerships are getting maximum value from the sale.

    Additionally, as disabled velicles are exempt from Vat, mobility are able to claim back the Vat which in my case is over £5,000.

     

    So I really don’t understand what the justification is for an AP in any vehicle??

     

     

Viewing 9 replies - 1 through 9 (of 9 total)
  • Author
    Replies
  • #124917 Reply
    BigDave
    Participant

    This is a bit of a rant but why do we pay APs on any vehicles on mobility??? My understanding of the AP, is that it goes directly to the dealers supplying the mobility vehicles. But having recently made an order for a mobility car, I can see that the invoice is made out to mobility for the FUll PRICE of the vehicle!! If I was to buy this vehicle directly from the dealership as a private individual, there are always discounts to sweeten the deal. So essentially I would never be paying the full ticket price. So if the dearer ships are getting full value for their vehicle, why are we lumbard with paying APs as the dealerships are getting maximum value from the sale. Additionally, as disabled velicles are exempt from Vat, mobility are able to claim back the Vat which in my case is over £5,000. So I really don’t understand what the justification is for an AP in any vehicle??

     

    Because you have to take all the costs of running the vehicle for the life of the three year contract into account (the vehicle, insurance, servicing, depreciation, fixed costs etc and then make an allowance for projected resale value).

    Then deduct the weekly payments – £69.50 x 52 (weeks in year) x 3 (years of contract) equals £10,842 (plus any annual increments).

    If one chooses vehicle which costs more than this, the difference becomes the advance payment.

    One can always choose a vehicle with no advance payment, or even no advance payment and less weekly cost than the allowance.

    #124924 Reply
    vinalspin
    Participant

    Then deduct the weekly payments – £69.50 x 52 (weeks in year) x 3 (years of contract) equals £10,842 (plus any annual increments).

    PIP rate for 2020 is £62.25 x 52 weeks = £3,237 x 3 years = £9,711 (obviously there will be 2 small yearly rises in allowance rate but not a lot really.

    #124925 Reply
    BigDave
    Participant

    Then deduct the weekly payments – £69.50 x 52 (weeks in year) x 3 (years of contract) equals £10,842 (plus any annual increments). PIP rate for 2020 is £62.25 x 52 weeks = £3,237 x 3 years = £9,711 (obviously there will be 2 small yearly rises in allowance rate but not a lot really.

    Then deduct the weekly payments – £69.50 x 52 (weeks in year) x 3 (years of contract) equals £10,842 (plus any annual increments). PIP rate for 2020 is £62.25 x 52 weeks = £3,237 x 3 years = £9,711 (obviously there will be 2 small yearly rises in allowance rate but not a lot really.

    I just used the WPMS weekly amount in the example as it is the one I am most familiar with being a war pensioner.

    As you have demonstrated, the exact same principle applies using the DLA/PIP/AFIP weekly amount – just the AP will be larger as the weekly allowance is lower.

    #124928 Reply
    vinalspin
    Participant

    Figured that but I didn’t know the WPMS rates, once you deduct the difference on AP it’s equal.

    #124967 Reply
    Carl

    Thanks for the input.  Dave surely the AP goes directly to the vehicle dealership, so this bares no relationship to the servicing, insurance etc, as that cost is attributed to the mobility scheme.   The AP goes directly in the pockets of the dealership not the mobility scheme, as dealerships are achieving the maximum purchase price for the vehicle,  I am assuming there is no shortfall in the finance to them to justify any AP?

    Am I missing something??

    #124984 Reply
    rox
    Participant

    The dealer is a broker for Mb they take the ap and give it to Mb, the price is agreed quarterly with the manufacturer not the dealer. Some offer deals but it is because they buy x amount of cars every month for a discount from the Makers. who loan them the money for the car for 30 days and then after that charge them intrest. so that why they offer deals rather than pay intrest.

    #125005 Reply
    BigDave
    Participant

    Thanks for the input. Dave surely the AP goes directly to the vehicle dealership, so this bares no relationship to the servicing, insurance etc, as that cost is attributed to the mobility scheme. The AP goes directly in the pockets of the dealership not the mobility scheme, as dealerships are achieving the maximum purchase price for the vehicle, I am assuming there is no shortfall in the finance to them to justify any AP? Am I missing something??

    As Rox explains above, although the dealership collects the AP, it acting as the agent of Motability and it is passed onto Motability as the AP forms part of the overall finance agreement with Motability. Motability then pay the dealer a fixed amount for their services, plus a small amount for doing various administrative and back-office functions within certain timescales.

    Some dealerships may (at their diescretion and expense) reduce the AP you pay by offering incentives/cashback deals etc. However they still pay Motability the full AP.

    Dealers can offer these inducements to ensure they acheive overall bonuses from manufacturers for selling ‘xxx number of cars’ or pushing cars that the manufacturers want rid of (end of line etc). Or if the dealer has been left with a frustrated order and wants to clear it off it’s forecourt asap.

    Whichever way they dress it around though, they still pay the AP to Motability.

    #125015 Reply
    Dante

    Motability  operations are sitting on assets and reserves of billions & remuneration for senior executive plus bonus, holiday, private health care, free company car every 6 months etc…. is extortionate that they receive! There needs to be more change implemented – I feel strategically and operationally.

    I have written to senior staff and the Motability board on several occasions ref having a ‘Motability customers focus group’ , a ‘mystery shop type service run by disabled customers’ & in addition Motability customer representation at board level !!!!

    The finances of Motability Operations, it’s remuneration culture and the fact it’s bank rolled by 4 big banks has been  raised by the NAO and several national press I et recent years – partly the reason for the recent retirement of the last CEO after 15 years at the helm.

    I’ve been a Motability customer many years and it’s been a godsend & aided my ability to get around and aid my quality of life – on the whole frontline staff within Motability operations have been very good and even the few times I’ve had to escalate complaints – the case managers etc.. have been pretty thorough.
    I do have an issue with the assets and reserves Motability operations are sitting on & feel more should be allocated to the notability charity and grants etc….

    Also whilst the overall life time costs of a Motability car are expensive with the buying  power, bulk buy and negotiated discounts arranged by Motability operations & the car dealers and key partners (insurance / servicing / breakdown and so on) they drive a hard commercial line but have a cheaper unit cost than any other ‘car leasing operation’ as it’s the biggest in the U.K.

     

    #125229 Reply
    Carl

    Thanks for all your updates on this topic.

    I genuinely thought that the AP was to compensate the dealership for any short fall for selling the vehicle to a mobility customer.  But having seen an invoice to mobility –  the dealers are getting the full ticket price. So I was a bit confused by it all to be honest.

    An advanced payment would make no sense

     

Viewing 9 replies - 1 through 9 (of 9 total)
Reply To: Why do we pay any AP??
Your information: