Motability users are facing some significant changes in July
The Motability Scheme will undergo some major changes in July potentially affecting how users can drive their vehicles. However, four other rules will remain untouched during the revamp.
The rule updates have been triggered by a VAT and Insurance Premium Tax change that will apply to new leases from July 1, 2026. To combat the increased costs this will put on the scheme, the organisation said it has to make significant changes to “keep the scheme sustainable”. This will affect mileage costs, tyre replacements and EU breakdown cover.
The Motability Scheme has confirmed the rules that won’t be affected by the July shakeup, adding: “We stay committed to offering an all-inclusive package that gives you confidence and peace of mind.”
Things that will remain part of the Motability Scheme:
- Insurance for up to three drivers
- Servicing and maintenance
- Breakdown cover
- Dedicated support from our team
People who currently have a lease with the Motability Scheme also won’t be affected by the rule changes. The updates will only apply to new applications made on or after July 1, 2026.
Motability users who get their allowance from Social Security Scotland may also be affected differently than users in England or Wales.
People leasing cars after July 1 will face new rules around how much they can drive and what protection they have in case of breakdowns.
Mileage
Currently, Motability users can clock up 20,000 miles before an excess charge of 5p per mile kicks in. The new rules will reduce this to an average yearly mileage allowance of 10,000 before being charged 25p per mile including standard rate VAT.
For users with a three-year lease, this means they will have 30,000 miles before the charge kicks in and Wheelchair Accessible Vehicles will have a total allowance of 50,000 miles over their five year lease.
Users will need to pay for any additional miles they drove over their allowance at the end of their lease.
Overseas travel and breakdown
People who travel overseas with their Motability vehicle will now need a VE103 certificate before heading abroad to confirm you have permission to take the vehicle outside of the UK.
The certificate will cost £22 for new orders placed on or after July 1 and lasts for 12 months, covering all trips within this period. Motability also noted that fewer than 1% of customers used breakdown cover abroad in 2025.
Tyre replacement
People who order on or after July 1 will have a reduced number of tyres that can be replaced through the Scheme. The official guidance explains: “Tyre replacement is still included as part of your lease, as long as it’s within fair use.”
Under the new rules, someone with a three-year lease will be able to replace up to six tyres, and up to four of these can be for damage. Those with a five-year lease will be able to replace up to 10 tyres, six of which can be for damage.
This change is meant to reflect users’ needs as the average Motability customer replaces only two tyres per lease over the span of a three-year lease. The reduced mileage allowances could also potentially reduce need for extra tyre replacements.
Andrew Miller, CEO of Motability Operations, said: “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.”
