Motability Scheme offers “good value” against used EV challenges
Despite rising costs and challenges around the value of used EVs, the latest pricing for leasing packages on the Motability Scheme shows “good value for money”.
Motability Operations, which sells used vehicles at the end of a customer’s lease to fund new cars for scheme customers, has reported that the value of used cars has declined, which means less money is expected to go back into the scheme.
The UK’s transition to electric, shaped by the zero emission vehicle mandate, means there are fewer petrol and diesel cars available and more electric cars are available, it said.
In addition, the scheme has grown by 800,000 customers, which has required increased investment and borrowing. The scheme offers people receiving a qualifying disability allowance the choice of a good value and accessible vehicle leasing package. As well as a new car, customers also benefit from insurance, breakdown assistance, servicing, maintenance, tyres and windscreen repairs as part of the package.
Increasing motoring costs and changes to the car market mean that Advance Payments for the more expensive vehicles on the scheme have increased. Despite this, the scheme “remains good value”, Motability said, and is on average 45% cheaper than other alternative leasing packages, it claims.
Motability also reported there is low consumer demand for EVs, and concerns about affordability and accessibility, as well as the location of charge points. The sector is also affected by the continued repercussions of supply chain disruption created by the Covid-19 pandemic, when car parts were unavailable, and orders were delayed.
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 the Advance Payments 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.
The cost savings comparison, based on the most common type of Scheme customer against other lease packages is:
- Predicted most popular: Nissan Qashqai Automatic – save up to 27% (£5,254)
- Small petrol car: Skoda Kamiq – save up to 12% (£1,804)
- Small hybrid car: MG MG3 – save up to 19% (£3,087)
- Small electric car: Dacia Spring – save up to 28% (£3,653)
- Large electric car: Renault Scenic – save up to 41% (£9,173)
- Large petrol car: Nissan Qashqai – save up to 28% (£5,116)
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.
Andrew Miller, chief executive of Motability Operations, said:
“Drivers are seeing increasing costs across the UK due to rising inflation and energy costs, and the need for car manufacturers to meet sales targets as the UK transitions to electric. We do not exist in a silo and these market factors and costs affect what we can offer our customers.
“We’re working with car manufacturers and our partners with the aim of providing our customers with stand-out value and the Scheme is 45% cheaper on average compared to alternative options.
“During this period of rising costs and an unprecedented period of change for the car industry, we’re committed to ensuring the sustainability of the Scheme so that we can continue to keep our customers connected now and in the long term.”
Motorability Operations is a partner of the Transport + Energy Forum on 21 November. Taking the theme ‘Moving from action to delivery: fulfilling the transition to a decarbonised future’, this year’s Forum continues to track the evolution of decarbonisation, with sessions focused on The Conversation, The Delivery and The Future. Book your ticket here.
Image from Motability
