Motability - what’s best financially?

[Motability]

Does anyone here have experience of the motability scheme? I am considering my options and would be interested in advice.

I’ve NC’d so that I can give details without worrying. DD has been awarded higher-rate mobility DLA for four years which means we are now eligible for the motability scheme. In four years time she might still quality but I won’t bank on it - she might be dropped to a lower rate.

We currently own a very nice car which suits us perfectly; it’s 4 years old, well maintained with no problems (bar a few scratches). We bought it two years ago and won’t be able to replace it for at least three year. I reckon that the full cost of owning it is around 3k a year. That is a ball park figure comprising £1000 average running costs (insurance, servicing, maintenance, tyres) and £2000 depreciation. The new DLA award is almost exactly £3k a year so covers this neatly.

Alternatively we could sell our car, banking the £15k we would get to pay for a future car and get the exact same car (but New) on the scheme.

Somehow I can’t quite work out if that’s the best thing to do - am I missing something? Is it basically the same financial situation either way?

Seems to me that you'd be better off selling your current car if you really believe that you'll raise £15k in doing so. As you say, the the £9k (3 year award) will be spent either way. What resale value would your car have in three years time?

While running a vehicle on the scheme doesn't have to require any additional costs from you, you may choose to pay a sum of money up-front to access a 'nice' car and one that fully meets both your family and daughter's needs. Have you looked at the range on the Motability webite yet?

The only thing I would ask you to consider is if your DD needs any adaptations to use the car?
As the pp says, you could sell yours and bank the money for use in three years time. Equally you could save the DLA money in order to purchase something. It may be that the DLA will be renewed but motability cars are leased in a three year cycle anyway.

Are you sure about the depreciation on your vehicle? Don't forget insurance and race is included in the motability scheme, as well as repairs and accident cover.

We have found the scheme very easy to use and suits us well.

I need to double check my guesstimates but from what I see it breaks down like this: in 3 years time if I keep my car and bank the DLA then I will have £9k saved plus the depreciated Car value of £9k* - total 18k towards next save.

If we go for the motability scheme then in 3 years time we will have saved 3 x £1k running costs plus today’s value of the car £15k* so total of £18k towards next car - exactly the same!!

In which case we might as well use the scheme in order to a) have a lovely new Car and b) avoid the usual risks associated with Car ownership such as the risk of an expensive component failing or other unexpected cost.

*i need to double check these numbers because they will make a big difference to the bottom line.

in 3 years time if I keep my car and bank the DLA then I will have £9k saved plus the depreciated Car value of £9k - total 18k towards next save

I may be confused but will you? You seem to have accounted for the £6k depreciation but not the £1k p.a. running costs; these running costs won't apply to the Motability vehicle.

It would be a shame to have to sell what is still a new car but the peace of mind that Motability provides is usually an important factor.

I think I’ve accounted for that correctly - the logic I used was that I already pay the £1000/year out of my existing income and this won’t change in that scenario - however I’ve accounted for it in the motability scenario because I won’t have to pay it and this will have £1000 of my existing income ‘spare’. Hope that makes sense.

Anyway, it looks like I was both over optimistic and overly pessimistic - my Car is only worth around £12.5k now but only depreciates by around £3.5k in 3 years. This skews things in favour of keeping our own car which feels right to me tbh. The bottom line looks like c. £18k saved if we keep our car vs c. £15.5k on the mobability scheme - plus if we want a similar car to the one we have it would require a deposit of around a £1500 so potentially only £14k towards next car.

It’s a fab scheme for people who can’t otherwise afford to buy a car to suit their needs but as we already have a car that is great for us it makes more sense to Bank the money.

When Ds became eligible I did all of the sums and for us it was not worth joining. There are restrictions on the use of a mobility car too which you need to consider.