Thousands of disabled motorists will see rules change on the Motability scheme from Wednesday, July 1. New mileage caps, tyre and travel rules, fresh vehicle prices and tax-related charges will apply to orders placed from that date.
When the new Motability rules take effect and who is impacted
Motability will publish its quarterly price list on July 1. The updated vehicle prices and scheme rules become active the same day.
- Changes apply to new orders placed on or after July 1.
- Existing lease holders keep their current terms until they renew.
- The organisation says it introduced adjustments after recent tax changes raised operating costs.
How tax measures change costs: VAT and insurance levy details
Recent budget measures altered how Motability leases are taxed. The operator has adjusted pricing to reflect that shift.
- VAT will be charged on advance payments for higher-priced vehicles.
- The part of a lease funded directly by a qualifying disability benefit will remain exempt from VAT.
- Insurance Premium Tax (12%) will be added to most new Motability insurance policies.
- Wheelchair accessible vehicles will remain exempt from both of these tax changes.
What practical rule changes to expect: mileage, tyres, travel and prices
The scheme will introduce tighter mileage allowances and new requirements around tyres and travel costs.
- Formal mileage limits are being updated for new leases.
- New guidance will cover tyre eligibility and maintenance responsibilities.
- Travel-related charges may be amended as part of the pricing updates.
- Vehicle list prices will appear in the published quarterly schedule.
Motability’s stance and customer protections
Motability’s leadership says protecting the all-inclusive nature of leases guided decisions.
- The firm emphasises leases will continue to include insurance, servicing and maintenance.
- Breakdown cover and customer support remain part of the package.
- Insurance for up to three named drivers will still be provided.
- Management said simply passing the full tax increase to customers was not an option.
What customers should do next
- Check the new price list when it is published on July 1.
- If you are planning to order a vehicle, confirm the total advance payment and any VAT or insurance charges first.
- Existing customers should review renewal terms before their next lease starts.
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