Changes to Motability
Changes to Motability
Last updated: 28th April 2026
Understanding the new Motability changes: Drive Smart and Mileage Limits
Recent changes to the Motability Scheme have raised significant concerns across the disabled community. Organisations including Muscular Dystrophy UK, Transport for All, Scope, and Disabled People Against Cuts have all spoken about the potential impact.
At SMA UK, we know how essential the Motability Scheme is for people living with SMA. It enables access to work, education, healthcare and social activities. So, it’s important to understand the changes and what they could mean in practice.
What changes are being introduced?
From 1 July 2026, Government tax increases announced at the 2025 Autumn Budget will add around £300 million a year to the cost of delivering the Motability Scheme, equivalent to around £1,100 per lease on average. These tax changes were:
- Removal of VAT relief on Additional Payments (including Advance Payments) for new leases, meaning there could be an increase of 20% for some vehicles.
- Introduction of Insurance Premium Tax (IPT) on leases, at the standard rate of 12%, which will be applied to the insurance of new leases.
In response to these tax increases, the Motability Scheme has changed parts of the lease package to offset much of the impact, while protecting its core package. This includes insurance, servicing, maintenance and breakdown cover.
These changes were announced to Scheme customers on 26 March 2026. Motability Operations, which runs the Motability Scheme, have explained that these changes were developed following close engagement with their customers. This engagement included independent research involving focus groups, in-depth interviews and a large-scale, representative online survey, with around 2,500 responses. The changes were also reviewed by the Motability Foundation, the charity responsible for overseeing the Motability Scheme.
There are two key updates to Scheme leases to be aware of:
- changes to mileage allowance
- wider changes to the scheme
What is changing?
Mileage Limits:
From 1 July 2026 new standard Motability car leases will include a 10,000 mile annual limit (30,000 miles over three years).
Wheelchair accessible vehicles (WAVs), which are typically leased over five years, will have a total allowance of 50,000 mile (down from 100,000 miles under the current scheme).
Motability Operations have explained that almost three quarters of customers currently drive less than 10,000 miles annually and the change is intended to reflect standard lease agreements.
Tyre replacement:
Tyre replacement continues to be included as part of a standard lease on the Scheme for customers in England, Wales and Northern Ireland, as long as it is within fair use.
The tyre replacement allowance will be up to six tyres a lease, with four for accidental damage, for a three year lease. This is up to 10 tyres including six for damage during a five-year lease (WAVs).
According to Motability Operations, on average, Scheme customers replace two tyres over a three-year lease and the new limits are designed to cover what most people need.
Other changes:
Customers who want to take their vehicle abroad must request a VE103 from the RAC and pay an admin fee of £22.
What is staying the same?
- No changes to eligibility for the Scheme or disability benefits as eligibility remains the responsibility of the Department for Work & Pensions.
- Leases will continue to include insurance, servicing, maintenance, and breakdown cover.
- If a customer has an existing lease or placed an order before 1 July 2026, their agreement remains unchanged.
- If a customer ordered before 1 July 2026 and their vehicle is delivered on or after 1 July 2026, the lease rentals and advance payments will remain as stated at the time that the order was placed.
- Scheme leases will also continue to include insurance for up to three drivers.
- The Scheme remains committed to offering a broad choice of affordable vehicles with no Advance Payment.
WAVs and Adapted Vehicles:
For a lease to continue to benefit from VAT concessions, the vehicle must be adapted to allow this customer to travel in it. This includes:
- Most Wheelchair Accessible Vehicles (WAVs) and cars with significant adaptations designed to help customers travel safely and independently
- Customer will need to complete a Customer Eligibility Declaration when they order a new vehicle to confirm if the criteria for VAT concession applies.
- There are no changes to the leases of powered wheelchairs and scooters. VAT will not be charged on any payments during the lease.
What happens next?
Drive Smart
Separate from the Scheme changes above, the rollout of Drive Smart was initially focused on those under 30. According to Motability Operations this is because younger drivers see the highest volume of insurance claims on the Scheme and is a move in line with measures across the wider market.
From 13 April 2026, Drive Smart was expanded to all new to scheme customers regardless of age. The explanation given for the wider rollout is that new to scheme customers often face a transition period as they adjust to a new vehicle.
Drive Smart is therefore intended to therefore serve as a support tool for customers during their initial lease, helping them to settle in, reduce their risk of accidents, and protect the long-term affordability of the Scheme.
How it works
A device will be fitted to your windscreen which is linked to a mobile app via Bluetooth and uses industry-standard telematics technology to provide feedback on driving behaviour.
This includes:
- Speed
- Smoothness (acceleration, braking, and cornering)
- Phone use whilst driving
- Overall usage
Drivers will receive a weekly score, with safe driving rewarded by points of up to £160 per year. These scores are based on data from the in-car device and linked app, such as speed, patterns of acceleration and braking, and whether a phone is being used while driving.
Two consecutive ‘red’ scores, or four within 12 months may lead to a driver being removed from the Scheme.
A red week is triggered by persistently dangerous driving such as extreme speeding. Where usage alone is the only reason for a red week, this will not impact a lease. Similarly, a single isolated incident, such as emergency braking, will not result in a red week on its own.
The Motability Scheme have said that this system is designed to encourage safer driving and that data will only be used for this purpose.