Major Motability changes coming within days as new mileage limits, fees and prices impact thousands

Thousands of disabled drivers will see major changes to the Motability scheme come into effect within days, with new mileage limits, tyre rules, travel charges and updated vehicle prices.

Motability has confirmed its new quarterly price list will be published on Wednesday, July 1, with updated prices for vehicles available from the same day the new scheme rules come into force.

The changes will apply to new orders placed on or after July 1, while existing customers will remain on their current lease terms until they renew.

Motability Operations detailed how the changes follow new tax measures announced in the Autumn Budget last year, which increased the cost of running the scheme.

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From Wednesday, the annual mileage allowance for new customers will fall to 10,000 miles a year, equivalent to 30,000 miles over a standard three-year lease.

Customers with a five-year Wheelchair Accessible Vehicle lease will receive a 50,000-mile allowance.

Drivers who exceed the limit will pay 25p per mile, including VAT, although Motability stated customers with exceptional circumstances may be eligible for additional support.

New fair use limits will also apply to tyre replacements. Three-year leases will include up to six replacement tyres, including a maximum of four damaged tyres, while five-year WAV leases will include up to 10 replacement tyres, with up to six for damage.

Meanwhile, customers travelling to Europe will also need to obtain a VE103 certificate through the RAC before leaving the UK and pay a new £22 administration fee.

Motability said fewer than one per cent of customers used breakdown cover abroad during 2025.

Andrew Miller, chief executive of Motability Operations, acknowledged the changes would be difficult for some customers.

He said: "Before I do, I want to acknowledge that some of these changes will be difficult and may affect you.

"I understand that any increase in costs or changes to what you receive can be worrying and frustrating, particularly when you rely on the scheme every day for your independence.

"Your lease will continue to include insurance, servicing, maintenance and breakdown cover.

"Protecting this all-inclusive package, and the independence it provides, has guided every decision we've made."

Under the new rules, VAT will only apply to advance payments made for more expensive Motability vehicles, while the part of the lease paid for through a customer's qualifying disability benefit will remain free from VAT.

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Insurance Premium Tax, which currently stands at the standard rate of 12 per cent, will also apply to most new Motability vehicle insurance policies, although wheelchair accessible vehicles will remain exempt from both changes.

The Government said the reforms are intended to "promote fairness and value for money for taxpayers" by bringing the tax treatment of most Motability leases into line with commercial leasing.

However, Motability warned the tax changes would have increased the average cost of a new lease by around £1,100 if no action had been taken.

Mr Miller said: "It was clear to me that simply passing all these costs on to customers was not an option."

He added that the company's priorities had been to "protect what matters most in your lease, reduce the impact of the tax changes and maintain the good value of the scheme".

But the group did note that customers who already have a Motability lease will not be affected immediately.

Motability said it remains committed to offering an all-inclusive package including insurance for up to three drivers, servicing, maintenance, breakdown cover and customer support while keeping the scheme sustainable for the long term.

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