Published 29 June 2026 · Last updated 2 July 2026
From 1 July 2026, the Motability Scheme is changing the way new leases are priced, and anyone thinking about applying should understand what is shifting before they commit. The changes follow tax measures announced in the Government’s Autumn Budget and apply only to new applications made on or after that date. If you already hold a lease, nothing changes for you during your current agreement.
The headline change is tax. From 1 July, VAT and Insurance Premium Tax will apply to most new leases. Advance Payments, which have until now been free of VAT, will have 20% VAT added. In practice this means the upfront cost on many vehicles and powered products will rise for customers who join the Scheme from July onwards.
There are also changes to mileage allowances on cars. The standard car allowance is being reduced from 60,000 miles over three years to 30,000 miles, and the wheelchair accessible vehicle allowance drops from 100,000 miles over five years to 50,000 miles. These limits matter most to higher mileage drivers, and the Motability Foundation has said the updates are intended to keep the Scheme financially sustainable over the long term.
It is worth being clear about who is affected. The Scheme has stressed that existing customers keep their current terms until their lease ends. The new pricing and mileage rules apply to fresh applications and renewals from 1 July 2026. If you are mid way through a lease, you do not need to do anything right now.
For people who use the Scheme to lease a powered wheelchair or mobility scooter rather than a car, the all inclusive package remains the same in structure. A Motability lease on a powered product still bundles insurance, breakdown cover, servicing, routine repairs, tyres and batteries into one payment. What changes is the tax treatment of the lease itself, so it is sensible to ask your dealer for a full quote that reflects the post July figures before signing. The Scheme’s own changes page sets out the timeline in detail.
If the new costs make the Scheme less attractive for your situation, it is worth comparing it against buying outright. Our guides on mobility scooters and wheelchair costs can help you weigh a Scheme lease against an outright purchase. Anyone considering a powered chair should also factor in storage, charging and home access. If stairs are part of the problem you are trying to solve, a stairlift may be a better long term answer, and you can get a sense of pricing on our stairlift costs page.
The practical takeaway is simple: get your quote confirmed in writing, check whether applying before or after 1 July is better for your circumstances, and do not assume that last year’s pricing still applies.
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Published 29 June 2026 · Last updated 2 July 2026
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