Motability have revealed that the New Vehicle Payment will increase from £250 to £750 in 2023. The new £750 payment is likely to be paid to customers from the end of February.
Motability introduced the £250 New Vehicle Payment in February 2022. It is paid to customers who are either new to the scheme or renewing at the end of their existing vehicle lease, with the money transferred after the handover of the new vehicle. In December 2022 Motability announced that the New Vehicle Payment would continue into 2023.
The news that the New Vehicle Payment (NVP) would increase to £750 was officially announced by Motability in mid-January 2023.
In an article published on 12 January, Motability stated: 'In February 2022 we introduced a £250 NVP for car and Wheelchair Accessible Vehicle (WAV) customers. We’re increasing this payment to £750 from the end of February 2023. If you already received a NVP of £250, you’ll get an extra £500 and we’ll start to pay this from the beginning of March 2023. This will make your total payment £750.'
You can read more about the NVP increase on the Motability website here.
The reasons for the NVP increase were highlighted in the Motability Operations 2022 Annual Report:
'We are increasing the NVP from £250 to £750 for all renewing customers and any new to Scheme customers who place an application during 2023 (payment will be made to both renewing and new customers at the point they take delivery of their new vehicle). Customers who have previously received a £250 NVP will receive a £500 top-up payment. These payments, which represent a significant investment in supporting affordability for customers, will be rolled out from February 2023.'
The NVP increase follows an exceptional year for Motability Operations, and they acknowledge that profits in 2022 were 'much higher than expected.'
A spokesperson for Motability Operations recently told The Scotsman newspaper: "...we agree entirely with the principle of returning money to Motability customers and are doing exactly that – from spring 2023, every new and renewing customer taking out a lease will receive a payment of £750, with customers who received the New Vehicle Payment of £250 in 2022 having that topped up by £500.
"This amounts to an investment of £525 million over 3-5 years. We are also investing a further £645 million in pricing support to keep lease prices on average 45 per cent cheaper than alternatives."
According to the Motability Scheme website, the NVP was originally introduced in 2022 partly to help customers with 'rising energy and fuel prices and other everyday living costs'. The increase to £750 is possible because of higher than expected profits in 2022 (£922.9 million reported profit after tax) thanks to a number of factors, including 'the continued increase in used-car values.'
The 10.1% Personal Independence Payment (PIP) and Disability Living Allowance (DLA) increase from April 2023 is likely to be another key factor.
Other significant investments announced by Motability Operations (in addition to the £525 million required to fund the NVP scheme) include:
You can read the Motability Operations 2022 Annual Report here.
Find out more about the NVP increase on the Motability website here.