The Motability Scheme continues to offer good value for customers with its latest leasing packages, despite higher motoring costs affecting drivers across the UK.
Increased motoring costs, including insurance, and changes in the car market mean that Advance Payments for some vehicles have increased. However, the Scheme continues to offer good value, offering leasing packages that remain on average 45% more affordable than alternative leasing options.
Andrew Miller, chief executive of Motability Operations, which runs the Motability Scheme, said:
“Drivers are seeing increased costs across the UK due to rising inflation and the price of energy, and these external factors affect what we can offer to our customers. We’re working with car manufacturers and our partners to provide good value to our customers and the Motability Scheme is 45% cheaper on average compared to alternative options.
“We’re committed to ensuring the sustainability of the Scheme during this unprecedented period of change so that we can continue to keep our customers connected now and in the long term.”
Scheme value
The Scheme’s all-inclusive package provides customers with:
- A brand new car, including EV options;
- Comprehensive insurance;
- Breakdown assistance; and,
- Servicing, maintenance, tyres and windscreen repairs.
Once the Scheme’s lease is agreed, costs remain fixed for the entire three-year lease period, helping to shield customers from fluctuating market conditions. For vehicles priced at the entirety of the enhanced mobility allowance, it is presumed that their allowance will increase in line with inflation and customers will not pay more if this doesn’t happen.
This cost savings comparison shows the difference between the cost of the vehicle with the Motability Scheme leasing package, and alternative leasing options in the market:[1]
- Skoda Enyaq Estate 125kW 50 55kWh 5dr Auto Electric – up to 53% cheaper, save up to £14,451
- Nissan Ariya 178kW Engage 87kWh 22kWCh 5dr Auto Hatchback Electric – up to 47% cheaper, save up to £11,764
- 1.2 Peugeot 2008 PureTech 130 Allure 5dr EAT8 SUV Petrol – up to 49% cheaper, save up to £11,827
Motability Operations works with manufacturers and other suppliers to negotiate and manage costs so that it can provide a wide choice of makes and models at good value for its customers.
Scheme customers have previously been shielded by rising motoring costs using money from higher-than-expected used car sales after the pandemic. Over £500 million has been given to customers over the last three years and no further funding is available. The one-time New Vehicle Payment is available to new customers until tomorrow (Friday 3 January) and to existing customers when they next renew, if they haven’t already had the payment.
There is still lots of choice available on the Motability Scheme, and different models to suit individual needs. Vehicles on the latest price list include:
- Predicted most popular vehicle: Nissan Qashqai, Advance Payments from £499
- Small petrol car: Vauxhall Corsa 1.2 Turbo 130 Ultimate 5dr Auto with no Advance Payment
- Vehicle with large boot space to store mobility equipment: Dacia Jogger 1.0 TCe Expression 5dr Advance Payments from £495
- Longer range EV: Peugeot e-3008 157kW GT 73kWh 5dr Auto – with a real-world range of up to 237 miles, Advance Payments from £1499
- Vehicle to suit small families: Renault Megane e-Tech EV60 160kW Iconic Comfort Range 60kWh 5dr Auto, Advance Payments from £495
External factors continue to influence pricing
Motoring costs have risen in recent years against a backdrop of continued inflation and supply chain pressures. The automotive sector is undergoing significant change as manufacturers invest in producing more electric vehicles, while also managing supply chain issues and the impact of inflation.
Car insurance costs have also significantly increased, and drivers faced an average 25% rise in insurance costs between 2022 and 2023. Motability Operations knows that their customers are also more likely to make a claim compared to the UK average, which also adds cost to the Scheme. In September, Motability Operations wrote to the UK government to support their insurance taskforce which aims to bring down the cost of insurance.
Motability Operations sells used vehicles at the end of a customer’s lease to fund new cars for Scheme customers and 2024 saw a drop in used car prices. This downturn is particularly impacting electric vehicles, which are reducing in value at a rapid rate due to slowing consumer demand and a resulting plunge in residual values. This trend creates significant challenges for the automotive industry, including leasing programmes like the Motability Scheme.
In addition, the Motability Scheme’s all-inclusive leasing package is now supporting 815,000 people across the UK. This increase has required more investment and borrowing to connect more people to the freedom and independence that the package provides. The interest rates for borrowing additional funds have increased alongside other rates, such as those for mortgages, which also affects the cost of the Scheme.
This means that some Advance Payments, needed for the more expensive vehicles on the Scheme, have increased, but the payments have not increased by as much as similar leasing packages outside of the Scheme. Some Advance Payments have decreased and there are over 60 vehicle derivatives with no Advance Payment.
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