Planned updates to the Motability Scheme are set to come into effect from July 2026, following recent government tax changes announced in the Autumn Budget. The adjustments aim to keep the scheme financially sustainable while limiting the impact on users who rely on it for daily mobility. These changes will apply across most of the UK, with separate arrangements still being considered for Scotland.
From the implementation date, new leases will include revised terms affecting mileage limits, additional charges, and vehicle use. The annual mileage allowance will be reduced to 10,000 miles, while the fee for exceeding this limit will increase to 25p per mile. Updates will also be made to tyre replacement allowances, alongside the introduction of an administrative charge for customers planning to travel with their vehicle in the EU.
Despite these updates, the core package offered through the scheme will remain unchanged. Insurance, servicing, maintenance and breakdown cover will continue to be included as standard, ensuring users still benefit from an all-inclusive arrangement designed to support independence and ease of use.
The changes are being introduced in response to rising operational costs, particularly new taxes such as VAT and Insurance Premium Tax on leases. Existing customers will not be affected immediately, as the revised terms will only apply to new agreements from July 2026 onwards.
