Motability has provided an update on its upcoming rule changes, addressing concerns about the installation of tracking devices in vehicles. From July 1, 2026, new leases will reduce the annual mileage allowance from 20,000 to 10,000 miles, with a 25p-per-mile surcharge for exceeding the limit. The scheme cited 'Government tax changes' as the reason for the adjustment, noting that without action, lease costs would rise by approximately £1,100 on average.
Telematics and Exemptions
Vehicles will be fitted with telematics technology, commonly known as a black box, to monitor driving behaviour including speed and braking. Drivers accumulating more than four red ratings within 12 months risk being removed from the scheme. However, Motability has confirmed exemptions following a customer enquiry on Instagram. A customer asked whether existing customers over 30 would need a tracking device on their next lease. Motability responded: 'As you're over 30 and not a New-to-Scheme customer, you won't need it, unless you have an excessive claims history.'
Mileage Allowance Details
According to the Motability website, leases will have an average yearly mileage allowance of 10,000 miles, totalling 30,000 miles over a three-year lease. Wheelchair Accessible Vehicles (WAVs) will have a total allowance of 50,000 miles over five years. Excess mileage will be charged at 25p per mile including standard rate VAT, or 21p per mile for leases benefiting from VAT concessions. The charge covers additional distance and insurance for those extra miles.
Impact on Current Leaseholders
Current leaseholders will not see changes to their mileage allowance. The new rules apply only to orders placed on or after July 1, 2026. Motability emphasises that three-quarters of customers already drive under 10,000 miles annually, so most will be unaffected. The scheme plans to introduce an exceptions process for limited circumstances before the deadline.
Chief asset risk officer Clare Ickringill stated: 'Government tax changes have pushed up the cost of running the Motability scheme. If we did nothing, it would make leases on average around £1,100 more expensive. We didn't want to cut the core package we know you rely on, including insurance, servicing, maintenance and breakdown cover. So we looked for a way to evolve the scheme that impacts as few people as possible.' She added that lower mileage helps plan costs accurately, as cars driven fewer miles retain more value and are less likely to have accidents or require repairs.
