Motability has said it will continue its “commitment to disabled people” following changes to the scheme announced in the Budget yesterday.
The scheme said it would be focused on “keeping the scheme as affordable as possible” and would continue to support access to employment, education and everyday life.
It will work closely with Motability Operations to ensure the scheme “remains a cornerstone of independence for disabled people – just as it has been for nearly fifty years”.
The news follows the decision by Chancellor of the Exchequer Rachel Reeves to remove premium brand vehicles from the scheme in the Autumn Budget, with the scheme now focusing on vehicles to meet disabled peoples’ needs and “represent value and purpose, while still harnessing competition between manufacturers to get good value,” Motability said.
Reeves confirmed that VAT will apply to Advance Payments, and Insurance Premium Tax will apply to scheme leases which will take effect from July 2026. The tax changes will mean the scheme will become “more expensive for disabled people”, but will remain sustainable with a choice of affordable vehicles, it added.
In addition, the scheme said it had been impact by “external influences” in recent years, including rising costs, fluctuating second hand car pricing and the large-scale introduction of EVs.
It said that it recognised any increase in the cost of a lease could have “a significant effect on disabled people’s independence and daily life”, and to minimise prices, it was considering a range of changes across the leasing package including mileage, overseas breakdown cover, increased use of telematics for insurance purposes and other services.
Motability said that details would only be confirmed when the impact to disabled people “has been fully assessed”. The tax changes will increase the cost of a lease on the scheme and it anticipated the average Advance Payment of a vehicle will increase by around £400 over the three-year package. It will continue to provide a range of around 40 to 50 vehicles available to lease with no upfront payment, it added.
Changes to the scheme’s package are expected to be introduced from July 2026 with Motability Operations, which runs the Scheme, beginning engagement with customers about the proposed changes in spring 2026.
Proposed changes to the leasing package will undergo disability impact assessment by the Motability Foundation, which oversees the Scheme, before any changes are approved, announced and implemented. As the Scheme evolves and impacts are assessed, the Foundation will “also need to consider how its grant programmes best support those most in need”, it added.
Finally, a new Special Investigations Unit is being set up to prevent misuse of the scheme, with around 80 people tackling the issue. Motability Operations also plans to strengthen data-sharing arrangements with government and police agencies to enable quicker, more effective action where misuse is identified.
It added that there would be no changes to current leases, Motability Foundation and Motability Operations would continue to subsidise and provide grant funding for the ongoing provision of Wheelchair Accessible Vehicles, while also funding adaptations to support over 82,000 customers with essential mobility solutions. Motability Foundation would also continue to provide grants to support people with the most profound needs to access the scheme.
Nigel Fletcher, Chief Executive of the Motability Foundation, said:
“We understand the challenges disabled people face in accessing reliable and accessible transport, and how important a Motability car is to Scheme customers. The changes to tax reliefs imposed on the Scheme in today’s budget statement mean the Scheme will need to evolve.
“We are working hard to minimise price increases for customers and are taking steps to assess the impact of potential changes to the leasing package. Our focus remains firmly on protecting the Scheme for those who need it most.”
Andrew Miller, Chief Executive of Motability Operations, said:
“An evolved Motability Scheme will continue to put the disabled people we serve at the heart of everything we do. Changes to evolve the Scheme will involve understanding what matters most to disabled people, working closely with Motability Foundation.”
Image courtesy of Motability
