Fleet News

Ford, Peugeot and Rover agree to new MFL scheme

THE long-running stand-off between Motability Finance Limited and Ford, Peugeot and Rover has ended with the manufacturers agreeing to sign up to MFL's new scheme. Tense, behind-the-scenes negotiations saw the disputing parties eventually reach individually acceptable solutions which will enable the three manufacturers to continue supplying Motability customers when the current contract expires at the end of February.

Noel Muddiman, director of Motability, said: 'We are delighted that the negotiations between MFL and the manufacturers have been successful, and that they will be back on board from March 1.' The dispute had flared after MFL, the charity's contract hire arm, revealed plans to take the maintenance and residual value risk for all cars joining its 360,000-strong fleet from March 1, in order to run a more flexible, cost effective scheme. But Ford, Peugeot and Rover objected to the proposals, arguing that the initiative would give MFL too great an influence on the used car market, and potentially undermine residual values.

Their position at the negotiating table was strengthened by the fact that between them they supply almost half of the Motability fleet, which accounts for 6% of all new car sales in the UK. Their threats to stop participating in the scheme unless MFL abandoned its proposals were taken seriously, and they are even understood to have each explored the possibility of setting up a rival to MFL.

Ford, Rover and Peugeot have all reached agreements which will see their cars serviced and maintained in their franchised networks.

In addition, Ford has secured a position which will see its dealers continue to buy back all ex-Motability cars, Rover will repurchase centrally all the cars it supplies to the scheme and then remarket these through its dealerships. Peugeot will allow MFL to dispose of its cars, which will be offered first to the maintaining dealer and then to its franchise network.

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