With the number of scheme users growing steadily, Motability is navigating the dual challenge of safeguarding taxpayer value while ensuring support remains accessible to those in genuine need. The upcoming financial changes and enforcement initiatives have sparked debate among MPs and charities alike about the future direction of the scheme.
New Special Investigations Unit to Tackle Misuse
Motability has announced the formation of a Special Investigations Unit comprising approximately 80 investigators tasked with identifying and addressing vehicle misuse across the scheme. According to a spokesperson for Motability, while the rate of misuse has not significantly increased, the rise in customer numbers means more cases now require attention.
Misuse is defined as any breach of the scheme’s terms, which include not using the vehicle for the primary benefit of the disabled person, lending the vehicle, driving while disqualified, or using the vehicle for undeclared business purposes. “The vast majority of customers use their vehicles in the way they are intended,” the spokesperson noted, but emphasised that tighter monitoring is now necessary.
The move comes following broader government scrutiny following revelations of abuse in related benefits schemes, including the Blue Badge system. According to The Cabinet Office, tens of thousands of Blue Badges were reclaimed in 2023 after it was discovered they were still in circulation posthumously or being sold illegally.
Motability Operations has also confirmed that it will strengthen data-sharing arrangements with law enforcement and government departments. This is intended to facilitate faster, more effective action in cases where violations of the scheme are identified.
Tax Reforms to Impact Cost of Vehicle Leases from 2026
From July 2026, the UK Government will begin applying VAT to Advance Payments and Insurance Premium Tax (IPT) on Motability leases. These measures, outlined in the Autumn Budget, are expected to increase the average Advance Payment by around £400 across a standard three-year lease, according to Motability’s official statement.
Speaking in the House of Commons, Sir Stephen Timms, Minister of State for the Department for Work and Pensions, stated that the changes would “improve value for money for taxpayers while ensuring that the Motability scheme continues to provide outstanding support for disabled people.”
Labour MP Shaun Davies raised concerns during the same session, warning that the policy could limit access to suitable vehicles for individuals with disabilities. “I have heard from several constituents about how accessible cars can help them into work and healthcare,” he said, noting that some people had questioned the affordability of certain vehicles under the current framework.
Motability Operations clarified that existing leases will not be affected, and wheelchair-accessible vehicles will remain exempt from the new charges. It also pledged to maintain a range of 40 to 50 vehicles with no upfront payment, fully covered by mobility benefits.
According to Motability, any changes to leasing packages will undergo a full disability impact assessment by the Motability Foundation before being finalised. Discussions with customers are expected to begin in spring 2026, as part of a broader effort to ensure that support remains equitable and targeted.
