🛑 Motability Scheme Removes Luxury Cars, Pledges Focus on UK Manufacturing
🛑 Motability Scheme Removes Luxury Cars, Pledges Focus on UK Manufacturing
The Motability Scheme, which provides leased cars to disabled drivers in the UK, has announced a major policy shift, effective immediately, that will see the removal of premium and luxury-brand vehicles from its offerings. The change comes just ahead of the government’s Autumn Budget, following months of political scrutiny and criticism over the availability of high-end cars through a taxpayer-backed benefit scheme.
Motability Operations, the charity that runs the scheme, stated the move is intended to “focus on vehicles that meet disabled people’s needs and represent value and purpose,” while simultaneously pledging a massive investment boost into the UK car manufacturing sector.
I. Which Cars Are Being Removed?
The policy change is effective immediately and targets brands traditionally viewed as luxury or premium options within the scheme.
Removed Brands: Luxury brands such as BMW and Mercedes-Benz will be immediately removed as options for new leases.
Other Exclusions: The scheme will also stop listing vehicles from brands including Audi, Lexus, and Alfa Romeo.
Volume Affected: While the headlines focus on the premium brands, these vehicles only accounted for around 40,000, or approximately 5%, of the 800,000 total cars leased through the Motability Scheme. The vast majority of recipients drive standard vehicles.
The removal of these models addresses one of the key areas of public criticism: the notion that the scheme was subsidizing a "premium motoring experience" for a small minority of claimants.
II. The Strategic Shift: Backing British Manufacturing
The second, and arguably more significant, part of the announcement is a commitment by Motability to channel billions of pounds into the domestic British car industry.
The UK Manufacturing Commitment
Motability Operations has set an ambitious target to significantly increase the proportion of British-built vehicles leased through the scheme:
2030 Target: Aiming for 25% of cars on the scheme to be built in Britain, up from the current 7%.
2035 Target: Seeking to secure 50% of the vehicles it offers from British factories by 2035.
This commitment could provide a massive boost to UK manufacturing, potentially creating demand for around 150,000 British-built vehicles annually by 2035, up from approximately 22,000 last year.
Early Beneficiaries: Nissan, which manufactures cars in Sunderland, is expected to be one of the earliest beneficiaries, with the number of its UK-built vehicles bought by Motability expected to double. Toyota (Burnaston) and Mini (Oxford) could also see significant boosts.
Chancellor Rachel Reeves, whose budget this week has fueled intense speculation about cuts to the scheme, welcomed the move, stating it would "support thousands of well-paid, skilled jobs" and align with the government's industrial strategy.
III. Political Context and Budget Speculation
The Motability scheme allows eligible disabled people—primarily those receiving the enhanced mobility component of Personal Independence Payment (PIP)—to exchange part or all of their benefit for a three-year lease on a new car, which includes insurance, road tax, servicing, and breakdown cover.
Pre-Budget Scrutiny
The announcement comes amid intense political pressure on the cost of the disability benefits system and speculation over potential changes in the upcoming budget. While the removal of luxury cars is a move by Motability Operations itself, it directly addresses a highly publicized criticism the government had been facing.
Other speculated changes that remain unconfirmed for the budget include:
Tax Exemptions: The Chancellor is reportedly considering removing the scheme's current exemption from VAT (Value Added Tax) and Insurance Premium Tax. Disability groups have warned that removing the VAT exemption alone could add thousands of pounds to the upfront cost of even the cheapest vehicles, making the scheme unaffordable for many users.
Eligibility: While there have been calls to restrict eligibility, the Minister for Social Security has confirmed that the eligibility criteria for PIP will not change until a major review is concluded in late 2026.
Disability advocacy groups maintain that the scheme is not a luxury but a "lifeline" that ensures independence, employment, and access to essential healthcare, and have urged the Chancellor to avoid any measures that would increase costs for disabled people.
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