What is Market Failure?
Market failure happens when the free market cannot efficiently or fairly provide goods or services, leading to unmet needs or inequality.
In the context of transport for disabled people, this failure is evident in several key ways:
Lack of Accessible Vehicles
- The commercial vehicle market rarely provides affordable, adapted or accessible vehicles.
- Disabled people often require specialist features or modifications that are not routinely available or are prohibitively expensive.
- Result: Many disabled people are excluded from mainstream vehicle ownership or leasing.
Limited Access to Credit
- Many disabled people rely on fixed incomes or disability benefits, making access to mainstream credit or leasing options difficult. 42% of customers have a household income of £20,000 or less.
- Traditional lenders often exclude these individuals, regardless of their reliability as customers.
- Result: A financial barrier that prevents participation in the vehicle market.
Complexity and Lack of Support
- Finding, adapting, insuring, and maintaining a vehicle can be especially challenging for disabled people.
- There is a lack of accessible information and practical support in the commercial market.
- Result: Higher costs, more stress, and reduced access to mobility.
How the Motability Scheme Solves This
The Scheme was created specifically to address these barriers and provide a fair, affordable solution:
- Inclusive Leasing: Enables disabled people to lease a new car, wheelchair-accessible vehicle, scooter or powered wheelchair by exchanging their mobility allowance.
- All-in-One Package: Insurance, breakdown cover, servicing, tyres, and adaptations included.
- No Credit Checks: Customers are not subject to credit scoring.
- Reinvestment Model: Operates on a not-for-profit basis, with any surplus reinvested to support disabled people.
We use our size and scale to negotiate with car manufacturers and Scheme partners (such as insurance, breakdown) to offer a good value option to disabled people.
Successive governments have provided, and continue to provide, VAT exemptions for disabled people, whether they use the Scheme or not.
Together, this ensures there is an affordable mobility choice for disabled people.
Why It Matters
Mobility is about more than transport. It affects access to employment, education, healthcare and independence.
21.2% of Motability Scheme users report improved job opportunities due to their vehicle, enabling them to enter or sustain employment. In addition, 26.8% of users report improved access to training and education, equipping them with the skills needed to secure employment.
For the wider UK economy, for every £1 of disabled people's allowances, there is £1.50 in economic benefit, including supporting 34,000 jobs across the country.
By addressing market failure, the Motability Scheme helps ensure that disabled people are not left behind.
