Motability is a scheme that allows disabled people to swap their qualifying mobility allowance to lease a new car, scooter, or powered wheelchair
Big changes to the Motability scheme are coming from July 2026 – and the Mirror is inviting you to have your say.
Motability is a scheme that allows disabled people to swap their qualifying mobility allowance to lease a new car, scooter, or powered wheelchair.
But under changes announced in the autumn Budget last November, Chancellor Rachel Reeves said that the scheme would no longer include “luxury cars” such as BMW and Mercedes-Benz vehicles.
The Chancellor also announced the Government would introduce VAT to advance payments for the scheme, and apply insurance premium tax.
These measures will impact new leases from July 2026, with Motability saying it will cost its business £300million of additional taxes.
Last month, the company said it is changing mileage allowances, charges for additional mileage and introducing charges if vehicles are taken abroad.
New contracts for those leasing vehicles will permit just 10,000 miles annually before incurring a 25p charge on every additional mile driven from July 2026.
Motability customers currently have a 20,000-mile allowance with excess charges of just 5p per mile.
As of April 2026, Motability has also introduced compulsory “Drive Smart” black boxes for vehicles where drivers under 30 or who are new to the scheme.
To be eligible for Motability, you must receive the Higher Rate Mobility Component of Disability Living Allowance (DLA), Enhanced Rate Mobility Component of Personal Independence Payment (PIP), Armed Forces Independence Payment (AFIP), or War Pensioners’ Mobility Supplement (WPMS).
When announcing the changes in the Budget, Ms Reeves said: “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 £1billion by financial year 2030/31.
“These reforms will not affect eligibility for the Motability Scheme or disability benefits.”
The spokesperson continued: “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.”
