The Motability scheme, which enables disabled individuals to exchange their qualifying mobility allowance for a lease on a new car, scooter, or powered wheelchair, is set for major alterations starting July 2026. The Mirror is now inviting readers to voice their opinions on these controversial changes.
What is Changing?
Announced in the autumn Budget last November by Chancellor Rachel Reeves, the reforms will exclude so-called “luxury cars” such as BMW and Mercedes-Benz vehicles from the scheme. Additionally, VAT will be introduced on advance payments, and insurance premium tax will be applied. These measures are expected to affect new leases from July 2026, with Motability estimating an additional tax burden of £300 million on its business.
Last month, Motability also announced adjustments to mileage allowances and charges for additional mileage, as well as new fees for taking vehicles abroad. Under the new contracts, customers will be permitted only 10,000 miles annually before incurring a 25p charge for every extra mile driven from July 2026. Currently, customers enjoy a 20,000-mile allowance with excess charges of just 5p per mile.
Black Boxes for Younger Drivers
From April 2026, Motability has introduced compulsory “Drive Smart” black boxes for vehicles driven by individuals under 30 or those new to the scheme.
Eligibility and Government Justification
To qualify for Motability, individuals must receive the Higher Rate Mobility Component of Disability Living Allowance (DLA), the Enhanced Rate Mobility Component of Personal Independence Payment (PIP), the Armed Forces Independence Payment (AFIP), or the War Pensioners’ Mobility Supplement (WPMS).
When unveiling the changes, Chancellor Reeves stated: “The Motability scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz, and so I am making reforms that will reduce generous taxpayer subsidies. Motability have confirmed that they will remove luxury vehicles from their scheme, getting the scheme back to its original purpose of offering cost-effective leases to disabled people.”
A Department for Work and Pensions (DWP) spokesperson previously told the Mirror: “The Government and Motability have worked in partnership to develop a suite of reforms which strikes the right balance between delivering a key service for disabled people and fairness to the taxpayer, saving over £1 billion by financial year 2030/31. These reforms will not affect eligibility for the Motability Scheme or disability benefits.”
The spokesperson added: “In determining these changes, Motability have taken careful steps to ensure the Scheme remains good value and accessible for disabled people. This includes engaging with Scheme customers about prospective changes, the feedback from which has informed the changes.”
Have Your Say
Should the Government abandon these changes to the Motability scheme? The Mirror wants to hear your views. Share your opinion in the comments below or via our poll.
