In response to a report from the Adam Smith Institute (ASI), reported in The Times, which misunderstands how the Motability Scheme works, a spokesperson for the Motability Scheme said:
The Adam Smith Institute proposals are based on bad maths and a misunderstanding of how car leasing works, leading to higher costs for disabled and non-disabled drivers, reduced access to jobs and they do nothing to cut costs for government.
Disabled people face huge transport barriers, and the Motability Scheme is a lifeline – helping people get to work, education and live independently.
ASI doesn't understand used vehicles
The report claims £3.4 billion could be saved every year, but this calculation presumes that nine year old cars would have no insurance or repair costs and misunderstands that cars are sold in a three year cycle (so is at least three times higher and doesn’t take many other factors into account).
We regularly review options to lease second hand vehicles and have found that leasing a three year old vehicle would cost over twice as much as a new - for example, a car with a £1,400 advance payment would cost £3,250 at three years old. Negotiations with car makers and partners mean the Scheme benefits from predictable pricing and running costs, including residual value benefits that the fragmented used market cannot reliably match at the scale required to meet the needs of disabled people on the Scheme. New vehicles carry also lower maintenance risk and full manufacturer warranty, protecting customers from unexpected costs.
Competition between manufacturers lowers costs for disabled people, and there are over 860 vehicles available on the Scheme. Vehicles made by premium brands (which are the cheapest models they make) account for 6.8% of applications, and this has reduced over time.
Purchasing used cars at scale like this would also distort the used car market, raising prices for UK motorists who have already experienced a 50% increase in insurance costs over the last three years.
ASI doesn't understand the needs of disabled drivers
Disabled people face significant challenges accessing reliable, affordable transport. The Motability Scheme is often their only practical solution. 81% of Motability’s customers in England live in rural or suburban areas, emphasising the need for transport independence, and research shows that disabled people take 40% fewer trips than non-disabled people.
We use the tax concessions to cut prices for disabled people who are otherwise likely to be priced out and pass this on pound for pound. The typical UK household income (£36,700) is around double the median income of a typical Motability Scheme customer household (£18,400).
Tax concessions mean savings for Scheme customers and without them Scheme leases would increase by around a third. That would mean thousands of disabled people losing access to work, school, and independence as the Scheme would become too expensive.
Around 12% of the fleet are adapted vehicles and about 43% of disabled people on the Scheme need help from another driver (rather than choosing an adapted vehicle, which can be more expensive).
In addition, over the last nine years Wheelchair Accessible Vehicles (WAVs) have been subsidised by £627m, and in 2024 alone Motability Operations and the Motability Foundation provided £128.2m (up from £47.1m in 2016), including an average price subsidy of almost £8,000 per WAV and average charitable grants of £10,000 to the 56% most in need.
ASI doesn't think about securing jobs for hard working people in the UK's automotive sector
The Motability Scheme benefits everyone in the UK, and is a lifeline that delivers economic value to the UK. For every £1 of disabled people's allowances that goes into the Motability Scheme, there is £1.50 of economic benefit.
This includes supporting 34,000 jobs in communities across the UK, including in car manufacturing, repairs and maintenance. 40% of these jobs are in the most deprived parts of the country.
This is in addition to supporting disabled people into work or to run a business.
Value for the taxpayer
The Scheme delivers value for disabled people, the UK economy and taxpayers without requiring additional taxpayer funding. Disability allowances can't cover the up front cost of vehicles, and the Scheme buys cars using private investment not money from taxpayers.
Oversight of the Motability Scheme
The Motability Scheme is independently overseen by the Motability Foundation, which works closely with government to ensure value for money and accountability.
The ways in which the Motability Foundation exercises its oversight of the Scheme and measure performance, and the mechanisms by which the two distinct organisations (Motability Foundation and Motability Operations) operate are enforced by contract, which has recently been reviewed and re-signed by both parties.
The Foundation meets regularly with the DWP to update them on the Scheme, and the DWP attend quarterly Foundation Board meetings.
