The Motability Scheme is set to undergo significant changes in July 2026, but the organisation has confirmed that four core rules will remain untouched. These updates are driven by a VAT and Insurance Premium Tax change affecting new leases from July 1, 2026. To keep the scheme sustainable, Motability is altering mileage costs, tyre replacements, and EU breakdown cover. However, the following elements will stay the same: insurance for up to three drivers, servicing and maintenance, breakdown cover, and dedicated support from the team.
What Is Not Changing
Motability emphasised its commitment to offering an all-inclusive package, stating: "We stay committed to offering an all-inclusive package that gives you confidence and peace of mind." The unchanged rules include:
- Insurance for up to three drivers
- Servicing and maintenance
- Breakdown cover
- Dedicated support from our team
Existing leaseholders will not be affected by the changes; the new rules apply only to applications made on or after July 1, 2026. Motability users receiving allowances from Social Security Scotland may face different impacts compared to those in England or Wales.
New Mileage Rules
Currently, Motability users can drive up to 20,000 miles before incurring an excess charge of 5p per mile. Under the new rules, the average yearly mileage allowance will be reduced to 10,000 miles, with a charge of 25p per mile (including standard rate VAT) for any excess. For three-year leases, this means a total allowance of 30,000 miles; for Wheelchair Accessible Vehicles with five-year leases, the total allowance is 50,000 miles. Users must pay for additional miles at the end of their lease.
Overseas Travel and Breakdown
Customers travelling abroad with their Motability vehicle will now need a VE103 certificate, costing £22 for orders placed on or after July 1, valid for 12 months. Motability noted that fewer than 1% of customers used breakdown cover abroad in 2025.
Tyre Replacement Changes
Tyre replacement remains included under fair use, but with reduced limits. For three-year leases, up to six tyres can be replaced (four for damage); for five-year leases, up to ten tyres (six for damage). This reflects average usage, as most customers replace only two tyres per lease.
Andrew Miller, CEO of Motability Operations, commented: "The scheme is not just about fixing the here and now, it’s about fixing and maintaining us for many, many years to come. We totally understand and recognise these are quite impactful changes for some of you."
