We know recent changes to the Motability Scheme after the Autumn Budget have raised questions for many customers.
We sat down with our CEO, Andrew Miller, to answer the ones we’re hearing most. Below the video, you’ll also find answers to a wider set of questions from customers, covering a broader range of topics.
- VAT, tax changes and costs
- Reviewing the Scheme and changes before July
- Mileage, driving limits and lease terms
- Vehicle choice and removed brands
- Ordering or renewing your next car
VAT, tax changes and costs
What changes has the UK Government announced in the Budget that affect the Motability Scheme?
The Government has announced some tax changes that influence how we run the Motability Scheme. These include VAT on Advance Payments and Insurance Premium Tax. Both will be included on Scheme leases from July 2026.
These tax changes increase the overall cost of providing the Scheme. That’s why we’re reviewing how the Scheme works, so we can absorb these costs where possible.
It was also announced that brands such as BMW and Mercedes-Benz have been removed from the Scheme, as we refocus on practical, affordable mobility.
We’ll continue to share clear, up-to-date guidance as more details become available.
How will VAT changes affect Advance Payments? Will prices increase?
As we pass on savings from tax exemptions to customers pound for pound, VAT on Advance Payments will increase costs. Our plan is to make changes so we can absorb these costs where possible.
The VAT changes are coming in from July 2026, so there will be no immediate impact on our prices.
In the meantime, we will continue to review our prices every three months to make sure we’re offering you the best value we can. The next update will be on 1 January. Prices can go up or down each quarter. Find out why we set our prices every three months.
What is Insurance Premium Tax (IPT)?
It’s a Government tax applied to most UK insurance policies, including car insurance. From July 2026, this tax will need to be added to Scheme leases at the standard rate. In November 2025, the standard rate was 12%.
What does the EV 3p per mile tax mean for me?
There are no changes right now. The proposed pay-per-mile tax will not start until April 2028, and the Government have not confirmed any details yet.
Will road tax for Motability Scheme cars change after the Budget?
No. Vehicle Excise Duty (VED), often known as road tax, is not changing as a result of the Autumn Budget for Scheme customers.
How will these changes affect Wheelchair Accessible Vehicle (WAV)?
Wheelchair Accessible Vehicles (WAVs) and adaptations will continue to be exempt from VAT and Insurance Premium Tax (IPT).
Will scooters and powered wheelchairs be affected?
No immediate changes are planned. We’ll continue offering scooters and powered wheelchairs while reviewing pricing to ensure long-term sustainability.
Reviewing the Scheme and changes before July
What do you mean by ‘reviewing’ the Scheme?
For the next six months, we’ll be taking a look at what we include in the Scheme and how we manage costs. This review will help us keep the Scheme affordable and sustainable. Our priority is protecting our core package, including insurance, maintenance and breakdown cover, while keeping prices fair.
Before any changes are made, we’ll look closely at how they could affect customers and will work with the Motability Foundation.
For now, the Scheme is operating as normal which means you can place an order for your next vehicle three months before the end of your lease.
You can read more about why we’re taking this approach in a message from our CEO.
Will other changes happen before July?
We may make some practical updates where they help us reduce costs or work more efficiently. These will not affect the terms of your current lease or the core of the Scheme. For example, earlier this year we introduced Drive Smart for customers with drivers under 30 and our Fair Use policy has been updated.
Has the Budget changed eligibility for the Motability Scheme?
No. Eligibility has not changed.
Eligibility is decided by Government. There is a separate review into Personal Independence Payment. This is called the Timms Review. The review aims to report to the Secretary of State for Work and Pensions in autumn 2026.
Do I need to do anything now?
No. There’s nothing you need to do. We’ll keep you updated well in advance of any changes.
Mileage, driving limits and lease terms
What is the current mileage allowance?
For cars, it’s 20,000 miles per year on a standard three-year lease (60,000 miles in total).
For WAVs, your five-year lease package includes a mileage allowance of 100,000 miles or 60,000 miles for a three-year lease in a Nearly New WAV.
Are you considering reducing the mileage allowance?
Mileage is one of several areas we’re reviewing as part of our wider update. Before any changes are made, we’ll look closely at how they could affect customers and will work with the Motability Foundation.
Can I buy my car at the end of the lease?
Motability Scheme cars are leased on a contract‑hire basis, which means they must be returned at the end of your agreement.
At the end of a lease, the vehicle will be sold on the second-hand car market. This is built into the cost of your lease. And helps us keep the Scheme sustainable and affordable, so that we can continue to support your mobility needs long into the future.
Will my Motability Scheme leasing package, like insurance, maintenance and breakdown be affected by the Budget in the future?
Our focus is on keeping a strong core package, including essentials like insurance and breakdown cover, while keeping prices fair.
We’re looking at every area of the Scheme to limit the impact of costs on customers.
Vehicle choice and removed brands
Why have premium brands like Mercedes-Benz, BMW, Audi and Lexus been removed?
These cars tend to be higher cost vehicles that sit outside the Scheme’s focus on essential, practical mobility.
There has been no change to the WAVs available on the Motability Scheme. Essential vehicles like the Mercedes-Benz Sprinter are still available, these are commercial vehicles adapted for wheelchair access.
Will premium brands return to the Scheme?
No. We’re confident we can offer a strong range of good-value cars that meet your needs without premium brands.
Will there still be enough car choice for me on the Scheme?
Yes. We still have a wide choice of cars on the Scheme, including:
- more than 840 vehicles from around 30 manufacturers
- around 40 cars with no Advance Payment
- nearly 100 vehicles with an Advance Payment under £500
Statistics correct at time of publication in December 2025.
I need a 7-seat car, are these still available on the Scheme?
Yes. The number of 7-seat cars has not changed with the removal of premium brands. We still have 18 different models to choose from, from 10 different manufacturers. View all 7-seat cars on the Scheme.
Which vehicles are available on the Scheme?
You can see the full, up-to-date range using our Find a vehicle tool. We update our website as soon as vehicles are added or removed from the Scheme.
Which cars are British built?
Some of the manufacturers building cars in the UK are:
- Nissan models, built in Sunderland
- Stellantis models, built in Ellesmere Port
- MINI models, built in Oxford
- Toyota models, built in the Midlands
What does this mean for manufacturers outside the UK?
We’ll keep working closely with global manufacturers, so we continue to have a wide choice of vehicles to suit our customer’s needs.
Ordering or renewing your next car
I’m waiting for my car. Will the UK Budget changes affect my application?
No. Your application will go ahead as planned, and your order will continue as normal, even if the vehicle is no longer available on the Scheme.
Will my Advance Payment change for a car I’ve already ordered?
No. You’ll pay the Advance Payment that was shown when you placed your order.
I’ve ordered a premium brand car. Will it still arrive?
Yes. Any premium brand car ordered before it was removed from our price list will be delivered as usual. You can check the status of your order in your Motability Scheme online account or speak to your dealer.
I’m due to order my next car. What should I do?
The Motability Scheme continues to deliver on its mission: providing reliable, good-value mobility for the people who need it most. When it’s time for you to renew (usually three months before your lease ends), you can choose from the range of vehicles available at that time.
Can I extend my current lease if the same model is not available anymore?
Lease extensions are now only offered in exceptional circumstances, for example where a customer has complex adaptations that cannot be moved. Most customers will return their vehicle at the end of their lease and choose from the latest range.
My current car has been removed from the Scheme. Will my dealer still support me?
Yes. Your dealer will continue to support you for the rest of your lease.
What happens when I return my car if it’s no longer on the Scheme?
If you’re getting another Scheme car, return your current one to your dealer when you collect your new vehicle. If you’re leaving the Scheme, return it to your dealer on the last day of your lease.
Where can I check or manage my order?
You can check your order status in your Motability Scheme online account.
Will my current Motability Scheme lease or payments change?
No. The terms of your current lease and payments will not change. We expect changes to the Scheme for new leases from July 2026. We’ll keep you updated.
The market may be changing, but our commitment is not. We’ll keep doing what matters most: providing reliable, good-value mobility and supporting you every step of the way.
