Recent updates to Motability Scheme pricing, VAT and service terms will come into effect and bring several important changes that you should be aware of.
Get in touch with us today if you have any questions by filling in the enquiry form below!
From 1 July 2026, a number of important changes will come into effect across the Motability Scheme. #TeamArbury are here to guide you through what’s changing, what it means in practice and how it may impact you.
Recent updates to Motability Scheme pricing, VAT and service terms will come into effect and bring several important changes that you should be aware of.
Get in touch with us today if you have any questions by filling in the enquiry form below!
Advance payments
One key update relates to VAT on advance payments, which will move from a zero rate to the standard rate. However, thanks to the Motability Scheme’s price freeze policy, the advance price is locked at the point of application. This means customers will not see any increase in their agreed advance payment as a result of VAT changes.
VAT will also be applied at the standard rate to some in-life costs that were previously zero rate. These include excess mileage, early termination fees, asset recovery charges and fair usage charges.
Mileage
Changes are also being made to mileage allowances. The annual allowance will reduce from 20,000 miles per year (60,000 miles over a three-year lease) to 10,000 miles per year (30,000 miles over a three-year lease).
Excess mileage charges will increase significantly. For agreements in place before 1 July 2026, the charge is 5p per mile (zero rate VAT) or 6p per mile (inclusive of VAT). From 1 July onwards, this will rise to 25p per mile (inclusive of VAT).
Tyre replacements
Tyre replacement allowances will also be adjusted. Previously, customers were entitled to up to eight tyre replacements over a three-year lease. From 1 July, this will reduce to six tyre replacements over the same period.
EU breakdown cover
Finally, EU breakdown cover, which was previously included at no extra cost, will no longer be free. From 1 July, it will still be available but will incur an administration fee.
Arbury are here to help
We encourage you to review these changes carefully to understand how they may affect your Motability Scheme plans and arrangements going forward.
Discover your next Motability Scheme model at Arbury! Click the link below to explore our latest offers and find the perfect vehicle for you.
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As always, our friendly, expert team are on hand to answer any questions you may have. Fill in the enquiry form at the top of the article to get in touch