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The Motability Scheme is Changing
- Equal Lives
- May 14
- 4 min read
In last year’s autumn statement, the government announced changes to the Motability scheme to save £1 bn a year. Motability is a programme that allows eligible people, those receiving a mobility allowance through welfare benefits that’s expected to last at least 12 months, to lease a vehicle, mobility scooter or powered wheelchair.
The scheme, which was originally launched in 1978, was designed to offer good-quality, fully insured, serviced vehicles to those who are typically prevented from obtaining such vehicles due to prohibitive cost.
The scheme now supports 860,000 users in the UK, with around 300,000 vehicles being leased. Yet, despite the scheme’s expansion, 40% of Disabled people report facing prohibitive costs for the vehicle, fuel, and adaptations.
Changes being made
Removal of key tax breaks, such as VAT exemption and insurance premium tax exemptions. Only vehicles with substantial adaptations for wheelchair- and stretcher-users will be exempt from the new taxes.
The range of vehicles is being reduced, with ‘luxury’ brands like BMW, Mercedes and Audi removed with immediate effect, and with the aim of half of the vehicles available through the scheme by 2035 being British-made.
A mileage limit of 10,000 miles a year, with vehicles ordered after 1 July 2026, incurring added costs of 25p per mile, including standard rate VAT, and 21p per mile if your lease benefits from VAT concessions.
Tyre replacement limits. During a three-year lease, you can now replace up to six tyres. Up to four of these can be for damage. During a five-year lease, you can now replace up to ten tyres. Up to six of these can be for damage
From April 2026, all first-time customers and drivers under the age of thirty will have a ‘Drive Smart’ monitoring system fitted in their leased vehicle. Motability has stated that they will possibly roll this out to all leases at a later time.
Impact
These changes are likely to affect Disabled people of all kinds. 28% of disabled adults live in households which don’t have access to a car, compared with 15% of non-disabled adults.
In rural areas of Norfolk in particular, which are underserved by reliable, accessible public transport, it’s clear that additional barriers to the Motability scheme will remove essential access to healthcare, support networks, independence, work and education.
The up-front deposits of thousands of pounds for certain vehicles are already prohibitive for many Disabled people; thus, the removal of VAT exemption will likely force many Motability users into private vehicle ownership, defeating the purpose of the scheme. Others will be forced to give up their Motability vehicles and will be unable to afford private ownership, making their worlds much smaller.
80.4% of Motability users say the scheme improves their access to healthcare. 21.2% of Motability Scheme users report improved job opportunities because of the scheme, with users reporting an average increase of 14 working hours per week.
Despite the messaging from policymakers being that they want more Disabled people in work, schemes like Access to Work are currently being stripped back, and cuts to local authority budgets are preventing bus Pass use beyond 9:30 am -11 pm. The changes to Motability represent even more barriers to employment and demonstrate a disjointed and short-sighted approach that prevents Disabled people from working.
Misinformation Around Motability
There is a lot of talk from politicians and journalists about Motability misuse, yet evidence for these claims is never shared. There is a pervasive narrative that the scheme readily offers ‘millions’ of people ‘free cars’ - luxury cars at that - for conditions like anxiety, ADHD, tennis elbow and acne.
Firstly, these vehicles are not free. Use of the scheme requires customers to swap the mobility part of their PIP or other mobility-related benefit for the lease, and many also pay an advance payment of sometimes thousands of pounds. This money is not refunded when their lease ends. The minority of customers who opt for, say, a BMW instead of a Vauxhall are paying the difference themselves; taxpayers do not incur this cost.
42% of Motability users who responded to a customer survey have a household income of less than £20,000, so for many, this additional upfront cost is out of reach.
Secondly, the extreme focus on specific conditions, such as tennis elbow, is used to minimise the needs of those who use the scheme.
While there is very little information publicly available on the breakdown of how many people with different types of disability are supported by the scheme, we do know that the eligibility criteria are based on functional mobility impact, not diagnosis. To use the Motability Scheme, you must be receiving the highest rate of the mobility component.
Conditions like ADHD, anxiety, acne, or tennis elbow are very unlikely to be recorded as the main disabling condition unless they are well evidenced as unusually severe and impacting mobility.
What are your thoughts? What does your Motability vehicle allow you to do? Are you concerned by these changes?
Email your thoughts to info@equallives.org.uk
Equal Lives Campaign Team
