Big cuts are being made to how far people are allowed to go before incuring 25p per mile rates
A new update has been given by the Department for Work and Pensions after Motability announced plans to slash the approved mileage for leases – with big new fees per mile from July 1. The service which leases cars to people with disabilites recently announced it was slashing the number of miles people can do without paying extra.
From July 1 2026, new contracts will permit drivers to cover 10,000 miles before incurring a 25p charge on any additional miles travelled beyond that threshold. The previous arrangement allowed for 20,000 miles with an excess fee of 5p per mile – prompting worries about the effect on disabled users and escalating scheme costs.
It has also emerged that the number of new free tyres has been reduced, sparking safety fears. The updates were introduced to keep the scheme sustainable following tax changes announced by Chancellor Rachel Reeves.
In a new written Parliamentary question, Liberal Democrat Edward Morello asked Secretary of State for Work and Pensions Pat McFadden: “What assessment his Department has made of the potential impact of reductions to Motability mileage allowances on disabled people living in rural constituencies in the South West.”
In answer Sir Stephen Timms Minister of State for Social Security and Disability said: “Responsibility for the terms and administration of the Scheme sits with Motability Foundation and its Board of Governors. The Department for Work and Pensions meets quarterly with Motability Foundation, to discuss the Schemes operation.
“The changes to the leasing package were announced on 26 March and include reducing the mileage allowance from 20,000 per year to 10,000 per year. Changes only apply to new leases and there are no changes to the mileage allowance of existing leases. Motability Foundation have advised that approximately 75% of customers on the Scheme already use fewer miles than the proposed new mileage allowance. Motability understand that this will affect customers differently and are keeping these changes under review.”
Motability has pledged that information about an exceptions process to the mileage rules will be announced before July 1, but so far have not released any details. In a question about tyres, Tory Stuart Andrew asked Mr McFadden: “Whether his Department has had discussions with Motability Operations Ltd on the potential safety implications of changes to tyre replacement limits under the Motability Scheme.”
Sir Stephen said: “The changes to the leasing package were announced on 26 March and includes a reduction in the number of replacement tyres. This affects new orders made after 1 July 2026. The change is designed to cover what most people need and if a customer reaches their tyre limit, Motability Operations will explain their options clearly, helping them to stay mobile.
“Motability understand this will affect customers differently, and are keeping these changes under review. For lease agreements starting on or after July 1, Motability has introduced new fair usage limits for tyre replacements.3-Year Lease: Up to 6 tyres total, with a maximum of 4 allowed for accidental damage.5-Year Lease (WAV): Up to 10 tyres total, with a maximum of 6 allowed for accidental damage.”
In a recent interview, Andrew Miller, the CEO of Motability Operations, spoke about the change. He was asked what he would you say to customers who are concerned about mileage. He replied: “Look, it’s clear as day to me from the feedback that mileage is a huge concern for some customers. We’re making these changes because we have a sudden cost imposed on us very quickly by the government. And what we have to do is adjust the scheme to make sure that the scheme stay sustainable for the majority of our customers. 75% of customers will not be affected by this change, but an element will be. But we’re Under no illusion, this is really challenging.”
Motability has said it made these changes to absorb rising costs and new government taxes, claiming if they did nothing, average lease costs would have increased by £1,100. Limiting standard mileage lowers insurance, repair, and maintenance costs, allowing the scheme to keep essential services included.
A big change was recently halted. The disabled car leasing service dramatically halted its Drive Smart black box initiative – and admitted the experience for users has not been as it should be. The controversial scheme saw all new first-time leases and those with named drivers under 30 forced to fit the device.
It said: “The Drive Smart update does not relate to the mileage changes announced in March. Drive Smart was introduced to manage rising Scheme insurance costs.
“The changes made to the mileage allowance from July 1 was due to the new tax costs announced in the Autumn Budget (which apply from July 1). These costs would add £1,100 to leases on average if no other action is taken, and we know this would be unaffordable for many customers. The majority of customers (73%) currently travel 10,000 miles a year or less and would be unaffected.“
