Budget 2025: Motability reform - what’s changing and what it means

Chancellor Rachel Reeves has announced changes to the Motability scheme in her 2025 Budget, aiming to reduce what she called ‘generous’ taxpayer subsidies.

The scheme has faced criticism over the growing number of recipients with non-visible disabilities, as well as the availability of luxury vehicle options that customers can upgrade to by paying extra.

Key changes to the scheme

• Premium vehicles removed: disabled people will no longer be able to lease ‘premium’ vehicles, including Mercedes, Audi, BMW and Alfa Romeo.
• Changes take effect immediately: Motability confirmed the new rules will come into immediate effect.
• Shift toward British-built cars: Motability plans for half of all leased vehicles to be British-built by 2035, which Reeves says will support “thousands of well-paid, skilled jobs” and help grow the economy.

Why the number of Motability cars has risen

There are now 860,000 people with a Motability vehicle, an increase in recent years. The main reason is that more people now qualify for the higher-rate mobility component of the personal independence payment (PIP).

This benefit helps cover the higher travel and transport costs disabled people face and can be used to lease a Motability vehicle.

Around 50,000 Motability users currently choose higher-end cars, paying the extra cost themselves. These are the vehicles that will now be restricted.

What is the Motability scheme?

The Motability scheme helps people with disabilities lease a new car, wheelchair-accessible vehicle, scooter or powered wheelchair.

Since it was launched in 1978, it has supported millions of disabled people and their families with accessible and affordable mobility solutions.

Who can join the scheme?

You may qualify if you receive one of the following allowances:

• enhanced rate mobility part of personal independence payment (PIP)
• higher rate mobility part of disability living allowance (DLA)
• higher rate mobility part of Scottish adult DLA
• enhanced rate mobility part of adult disability payment (Scotland)
• higher rate mobility part of child disability payment (Scotland)
• war pensioners’ mobility supplement (WPMS)
• armed forces independence payment (AFIP)

Carers and parents can also apply on behalf of the disabled person, including for children aged 3+ or non-drivers.

Find out more about what was in the 2025 Autumn Budget and what it means for you.