The British car giant Motability Operations, which makes a living by leasing cars to disabled English drivers, has lost 5 billion Danish kroner in one year.
The leasing company Motability Operations, which in England administers a government scheme with cars for disabled drivers, has turned a roaring profit into a thunderous deficit of 5 billion Danish kroner.
This is what Autocar writes.
In 2023, there was a whopping £748 million in pre-tax surplus. This has now shrunk to a deficit of £564 million. Or the equivalent of a deficit of five billion Danish kroner.
The deficit is a reality, even though the scheme has grown during the same period with the addition of as many as 15 percent more drivers.
The company, owned by four major banks including Barclays and HSBC, blames the losses on increases in the costs of servicing, insurance and new cars, including electric cars.
From gigantic profits to a crazy deficit in one year
Insuring the cars in the scheme alone has become 46 percent more expensive since 2022. This has made each car 700 pounds, equivalent to 6,200 kroner, more expensive to keep running per year.
Furthermore, Motability Operations no longer receives the same amount of money for used cars as they used to.
However, the deficit has arisen even though the business's revenue has actually increased from 48 billion in 2023 to 61.2 billion last year.
– With the level of change in the market – driven by rising inflation, higher energy costs and the transition to electric cars – drivers across the UK are experiencing rising costs.
– This is a development we are not immune to either. Until now, we have been able to protect customers from rising prices by using the profits from the period immediately after corona.
– But that's over now, and customers will find that they have to pay more for their cars, says director Andrew Miller.
The government scheme, run by Motability Operations for the government, means people with physical disabilities can lease a car for £75, equivalent to 660 kroner per week. But that's a price they won't have to pay for much longer.
However, you don't have to drive all the way to England to find large deficits or huge loans with enormously high interest rates in the auto industry. Read more about it here .
