The Department for Work and Pensions has issued a new update after Motability announced plans to reduce the approved mileage for vehicle leases, with significant fees for additional miles starting July 1. The service, which leases cars to individuals with disabilities, recently revealed it is cutting the number of miles drivers can cover without incurring extra charges.
New Mileage Limits and Fees
From July 1, 2026, new contracts will permit drivers to travel up to 10,000 miles before facing a 25p charge per mile for any distance beyond that threshold. Previously, the allowance was 20,000 miles with an excess fee of just 5p per mile. This change has raised concerns about the impact on disabled users and the escalating costs of the scheme.
Reduced Tyre Replacements Spark Safety Fears
It has also emerged that the number of free tyres provided under the scheme has been reduced, prompting safety concerns. These updates were introduced to keep the scheme sustainable following tax changes announced by Chancellor Rachel Reeves.
Parliamentary Questions and DWP Response
In a written parliamentary question, Liberal Democrat MP Edward Morello asked Secretary of State for Work and Pensions Pat McFadden about the potential impact of mileage allowance reductions on disabled people in rural South West constituencies. Sir Stephen Timms, Minister of State for Social Security and Disability, responded that the Motability Foundation is responsible for the scheme's terms and administration. The DWP meets quarterly with the foundation to discuss operations.
Sir Stephen noted that the changes only apply to new leases, with no alterations to existing leases. The foundation has advised that approximately 75% of customers already use fewer miles than the new allowance. Motability understands the changes will affect customers differently and is keeping them under review.
Exceptions Process Pending
Motability has pledged to announce details of an exceptions process before July 1, but no information has been released yet. Regarding tyre reductions, Conservative MP Stuart Andrew questioned the potential safety implications. Sir Stephen explained that for new orders after July 1, 2026, a 3-year lease allows up to 6 tyres (max 4 for accidental damage), and a 5-year lease for Wheelchair Accessible Vehicles allows up to 10 tyres (max 6 for accidental damage).
CEO Addresses Customer Concerns
Andrew Miller, CEO of Motability Operations, acknowledged that mileage is a huge concern for some customers. He stated that the changes were necessary due to sudden costs imposed by the government, and the goal is to keep the scheme sustainable for the majority. While 75% of customers are unaffected, he admitted the situation is challenging for others.
Motability stated that without these changes, average lease costs would have increased by £1,100. Limiting standard mileage helps lower insurance, repair, and maintenance costs, allowing the scheme to maintain essential services. The controversial Drive Smart black box initiative, which faced criticism, was recently halted, with Motability admitting the user experience was not as it should be.
