Thousands of disabled drivers will face significant changes to the Motability scheme from July 1, 2026, including lower mileage limits, new tyre replacement rules, a charge for European travel certificates, and updated vehicle pricing. The changes apply to new customers and anyone placing a new vehicle order from that date, while existing customers remain on current terms until renewal.
Mileage Allowance Reduced to 10,000 Miles Per Year
New customers on a standard three-year lease will now be limited to 10,000 miles per year, totaling 30,000 miles over the lease. Those leasing a Wheelchair Accessible Vehicle (WAV) over five years will receive a 50,000-mile allowance. Drivers exceeding the limit will be charged 25p per mile, including VAT, though Motability says exceptional circumstances may allow additional support.
Tyre Replacement and European Travel Changes
The scheme introduces fair use limits for replacement tyres: three-year lease customers can claim up to six tyres (max four for damage), while five-year WAV lease customers can claim up to ten tyres (max six for damage). From July 1, drivers taking their Motability vehicle to Europe must obtain a VE103 certificate through the RAC, with a new £22 administration fee.
Tax Changes Drive Cost Increases
The changes follow tax measures from last year's Autumn Budget, which increased scheme running costs. VAT now applies to advance payments on more expensive vehicles, and Insurance Premium Tax applies to most new policies. However, the portion paid through disability benefits remains VAT-free, and WAVs are exempt from both taxes. Motability says the reforms align tax treatment with commercial leasing to promote fairness.
According to Motability Operations, the tax changes would have increased the average lease cost by around £1,100 if no action had been taken. Chief executive Andrew Miller acknowledged the difficulty for customers: "Before I do, I want to acknowledge that some of these changes will be difficult and may affect you. I understand that any increase in costs or changes to what you receive can be worrying and frustrating, particularly when you rely on the scheme every day for your independence."
Miller said the company prioritized protecting core benefits: "It was clear to me that simply passing all these costs on to customers was not an option. Our priorities have been to protect what matters most in your lease, reduce the impact of the tax changes and maintain the good value of the scheme."
Despite the changes, Motability confirms customers will still receive the all-inclusive package: insurance for up to three named drivers, servicing, maintenance, breakdown cover, and customer support.
