motability changes

knightstyle · 28 March at 9:05AM

Just had a heads up about changes to the Motabolity contract…

"In last year’s Autumn Budget, the UK Government announced tax changes that mean it will cost significantly more to run the Scheme. If we did nothing, the average cost of a new lease would increase by around £1,100.

From 1 July 2026, there will be four changes that will apply to new orders. These are, reducing the annual mileage allowance, increasing the excess mileage fee, changing tyre replacement limits and introducing a charge if you choose to take your car abroad

I also want to be clear about what is not changing. 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."

Albermarle · 28 March at 11:56AM

It is quite a dramatic change from 20K miles a year to 10K, although Motability say the average user drives 7.5K miles. So from that you can estimate that about 25/30% of drivers will be affected. I would guess most of the more severely disabled, wheelchair users etc are not affected.

Plus the excess mile charge increases from 5p to 25p .

Although Motability are blaming increased costs and taxes, I suspect there is some politics behind it.

There has been quite a lot of negative media around Motability clients 'swanning around' in big Beemers, on foreign holiday trips etc.

By banning luxury cars, cutting the mileage allowance and charging for foreign trips, they will be able to portray themselves more in tune with the national mood, and be able to defend themselves much easier. ( as will the politicians responsible)

Gandalf644 · 28 March at 12:47PM

Well, with the forthcoming changes, particularly the cutting of mileage allowance to 10K and the 25p per mile excess mileage, my current vehicle will be my last on the Motability scheme.

What they seem to have overlooked is that some people use their cars to commute to/from work and college/voluntary work and then add medical and hospital appointments into the mix. Personally I clock up circa 7k miles per annum in doing so. This would leave me with only 3k miles for ‘social, domestic and pleasure’ mileage which amounts down to 57 miles per week. My local town is 17 miles away so a once a week trip there would account for over 50% of my 'freedom' milage.

To charge 25p per mile excess mileage charge is just ridiculous compared to the industry norm.

So, come early next year, it will be a matter of buying a new vehicle outright again. It gives me the freedom to choose whatever vehicle I want and freedom to travel however many miles I want.

So much for Motability tagging their ads with ‘Everyday Freedom’!

born_again · 28 March at 1:55PM

Well given the Motability Operations reported a £144.6m pre-tax loss in early 2025, following a £565m loss in 2024.

Something has to give, or motability will simply have to close down, the big 4 banks could offload their ownership their of the scheme. Who would buy it?

UK is the only European country with anything like this.

https://www.disabilitynewsservice.com/motability-operations-stays-silent-over-how-much-high-street-banks-benefit-from-disabled-peoples-car-scheme/

Motability Operations, which is owned by Barclays, Lloyds, NatWest and HSBC, reported nearly £7 billion in revenue last year, but it has never been clear how much the four banks make from their long-standing ownership of the company.

Yet return a loss over the same year of £565million.

There is also much complaining (on facebook Motability pages) about the current under 30 black box, being running out to all users at some point.

So a lot of users are saying they are going else where. Which will be a shock to their wallet if they can get a lease in anywhere of the same price, as just they mobility allowance with anywhere near with included, Ins, tyres, breakdown & servicing.

So they are down to PCP, which has the same issues. Same with buying your own car.

In terms of the excess mileage charge. All cars go direct to auction now. So that has a big effect on how they come to that price point. Especially when a number of users return cars before the end of the 3 years, leading to a big loss at auction over the estimated price they expect to get after 3 years.

One recently at auction was less than 3 months old.

I was looking at joining the scheme, but costed it out. As we have a decent EV. It was simply not worth losing the £4,000 just for the sake of getting a new EV. When it costs under £1,000 a year to run.

teaselMay · 28 March at 2:14PM

Even a decade ago Motability wasn't such a good deal, I gave my last one up and took out a loan backed by my PIP award and bought, converted and ran a van as a camper for less over the three years than I was paying for a motability car that I couldn't insure appropriately because they couldn't deal with me being deaf. I even paid for a third driver on the Motability insurance and then couldn't insure that driver because they wanted me, my appointee and the driver on the phone simultaneously despite knowing I couldn't hear anything they said.

My memory may be mistaken but I thought the mileage limit used to be much lower, I only exceeded it once in 18 years, don't think I've ever driven 20k in a year.

Albermarle · 28 March at 2:55PM

https://forums.moneysavingexpert.com/discussion/comment/81940789#Comment_81940789

What they seem to have overlooked is that some people use their cars to commute to/from work and college/voluntary work and then add medical and hospital appointments into the mix.

I am sure nothing has been overlooked. Of course Motability will be aware that the changes will impact some people negatively, but it seems like it was not financially ( and maybe politically) possible just to carry on the same way.

To charge 25p per mile excess mileage charge is just ridiculous compared to the industry norm.

A quick google shows that excess mileage charges can vary widely, between 5p and 50p .