The Motability scheme is introducing major changes from July 2026, reducing the annual mileage allowance from 20,000 to 10,000 miles for new leases. Drivers who exceed this limit will face a charge of 25p per mile, up from the previous 5p per mile. The move is designed to offset rising costs and keep the scheme sustainable, potentially saving users up to £1,100.
Why the Change?
Chief asset risk officer Clare Ickringill explained on the Motability Instagram page that government tax changes have increased the cost of running the scheme. Without adjustments, leases would become around £1,100 more expensive on average. By reducing the mileage limit, Motability aims to protect the core package—including insurance, servicing, maintenance, and breakdown cover—while impacting as few customers as possible.
Ickringill stated: "If we know how many miles a car will drive, we can plan costs more accurately. A car driven fewer miles retains more value at the end of its lease and is less likely to have an accident, lowering insurance costs. Lower mileage also reduces breakdowns and repairs. Most leasing companies use mileage limits so drivers pay for what they use."
What's Changing?
From 1 July 2026, new leases will include 10,000 miles per year instead of 20,000. Three-quarters of current customers already drive under 10,000 miles, so they will not be affected. Additional mileage costs cover not only extra distance but also the associated insurance, with everything included in the per-mile charge.
Other Updates
This is one of several scheme updates announced in 2025. Premium brands like BMW and Mercedes have been removed. Additionally, all cars with new drivers or anyone under 30 named on the lease must be fitted with telematics technology. Drivers must install black boxes and an app that tracks speed and braking patterns, producing weekly ratings of green, amber, or red. A red week triggers feedback; if dangerous driving persists for two consecutive weeks or four over 12 months, the driver may be removed from the scheme.
Motability reports its average motorist covers 7,500 miles each year.
