Motability Scheme beats used EV challenges with ‘good value’
The latest pricing for leasing packages on the Motability Scheme continues to offer good value for money despite rising costs and challenges around the value of used EVs. Motability Operations, which sells used vehicles at the end of a customer’s lease to fund new cars for scheme customers, has reported a decline in the value of used cars. This means less money is expected to go back into the scheme, posing financial challenges.
The transition to electric vehicles in the UK, driven by the zero emission vehicle mandate, has led to a decrease in petrol and diesel cars and an increase in the availability of electric cars. This shift has impacted the Motability Scheme, which has seen growth with 800,000 customers added. The growing customer base has required increased investment and borrowing to cater to the demand for accessible vehicle leasing packages.
The Motability Scheme offers individuals receiving a qualifying disability allowance the option of leasing a vehicle at a reasonable price. In addition to a new car, customers benefit from insurance, breakdown assistance, servicing, maintenance, tyres, and windscreen repairs included in the package. Despite the increasing costs in the motoring sector and changes in the car market, the scheme remains competitive in price, with Advance Payments on average 45% cheaper than alternative leasing packages.
However, Motability has noted low consumer demand for electric vehicles, citing concerns around affordability, accessibility, and the availability of charging points. The sector has also been impacted by supply chain disruptions stemming from the Covid-19 pandemic, leading to delays in car parts and orders. The interest rates for borrowing additional funds have also increased, affecting the overall cost of the Scheme.
Despite these challenges, Motability Operations works closely with manufacturers and suppliers to negotiate and manage costs effectively, enabling a wide choice of vehicle makes and models at competitive prices for customers. Andrew Miller, the chief executive of Motability Operations, emphasised the commitment to providing customers with exceptional value amidst rising costs and industry changes.
Miller stated, “Drivers are facing increasing costs due to rising inflation and energy prices, coupled with the push for car manufacturers to meet sales targets in the transition to electric vehicles. We are adapting to market factors and costs, working with partners to offer our customers outstanding value. The Scheme remains 45% cheaper on average compared to other leasing options, demonstrating our dedication to sustainability and customer connectivity.”
Despite the challenges faced by the Motability Scheme, the commitment to providing affordable and accessible vehicle leasing packages remains steadfast. By navigating market changes and working collaboratively with industry partners, Motability Operations strives to uphold its mission of keeping customers connected and mobile in the long term.
Image from Motability
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