How is Motability so cheap?

larkim

Less so at the "entry level" vehicles, and I've no intention of getting a high end one, but it does surprise me how cheap some of their deals are.

For example, BMW 218 SE Coupe on a PCH for 36 months with 20,000 miles allowance is about £460 per month in the open market.

Motability does the same car, including maintenance, tyres, insurance etc, for PIP full allowance plus £999 up front.

So that's £16,560 PCH uninsured vs £10,360ish insured and maintained.

Even if there is some commercial wiggle room to bring the PCH cost down, that seems very, very good value for the PIP if that car suited your needs.

On the flip side, the cheapest Motability option is a Dacia Sandero 1.0 ScE Access. PCH £198 per month for 20,000 miles / 36 months.

On Motability, that would be £7,280 insured compared to £7,128 uninsured etc. So much closer to the open market price.

Is it simply the "heft" of Motability to negotiate good rates etc?

snowycatgirl

Because it's heavily subsidised being a charity.

bigbulldog

Motability do not pay vat and they get a massive great discount as well on all there vehicles.:)

sevenhills

larkim wrote: »

On the flip side, the cheapest Motability option is a Dacia Sandero 1.0 ScE Access. PCH £198 per month for 20,000 miles / 36 months.

On Motability, that would be £7,280 insured compared to £7,128 uninsured etc. So much closer to the open market price.

Its an interesting observation, luxury cars are much cheaper than commercial rates when compared to bog-standard cars.
You would think their aim would be to subsidise the cars that need alteration and adaptions for wheelchairs.
It being a charity and paying no tax would affect both examples equaly.

easy

One of the reasons the higher-end models are better priced is because the residual value (price the car can be sold for at the end of the lease) is better.

2nd hand car buyer will pay far more for a vehicle with all the bells and whistles (heated seats, full climate control, leather upholstery) than they will for the basic model. Hence the lease cost over the 3 years needs to meet a higher percentage of the full value of the car for a basic model, than the lease cost of an upmarket model

antrobus

bigbulldog wrote: »

Motability do not pay vat and they get a massive great discount as well on all there vehicles.:)

Basically, yes.

Vehicles that are adapted for the disabled are zero rated for VAT. So Motability Operations don't charge VAT. And they lease billions worth of vehicles do they have considerable buying power.

antrobus

snowycatgirl wrote: »

Because it's heavily subsidised being a charity.

Motability Operations, which provides the vehicles is not a charity. It pays corporation tax just like any other business. It is owned by Motability which is a charity.