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Motability Operations, the firm responsible for leasing vehicles to recipients of disability benefits, is stepping up efforts to tackle misuse of the programme amid mounting scrutiny over taxpayer spending.
As Britain’s largest car buyer, the company accounts for one in five new vehicle sales under a scheme allowing individuals to use government-funded mobility allowances to lease a car or van.
The scheme has come under fire in recent days based on bogus claims that it offers “free” top of the range cars to people with minor conditions.
Last year, Motability Operations generated revenues of approximately £7 billion but has no direct control over who qualifies for the programme.
However, an internal team investigates claims of misuse, recording 35,899 cases in the past year alone. Of these, 5,300 customers were removed from the service—an average of 15 per day.
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Motability is now reviewing the number of permitted drivers per vehicle—currently set at three to allow for carers—following evidence suggesting some users may be exploiting this flexibility.
Chief executive Andrew Miller revealed one individual was removed from the scheme after tracking data showed their vehicle was regularly used for school runs between their son’s home and their grandchildren’s school. The same car was also making frequent late-night trips between 11pm and 6am.
He told the Financial Times: “We have to consider using tracking more extensively to address valid concerns about improper use of the scheme. Are we being too generous with our insurance criteria? That’s something we are currently reassessing.”
The company’s operations have been thrust into the public eye due to government plans to reform the UK’s welfare system, aiming to cut £5 billion annually. A surge in disability and incapacity benefit claims saw Motability’s user base grow by 14.7% last year.
Miller highlighted that over 40% of Motability customers—whose average age is in their 50s—live in households earning less than £20,000 per year.
Currently, around 2.4 million people in the UK receive a mobility allowance, which they can use for public transport, additional living expenses, or to lease a vehicle through Motability. The government determines eligibility based on an individual’s ability to plan and undertake journeys independently.
he company accounts for one in five new vehicle sales (Image: Getty)
One advantage of the Motability scheme is its centralised approach to vehicle procurement, ensuring disabled customers receive appropriate support and protection from potential exploitation by smaller dealers.
Responding to criticism that the programme facilitates the purchase of high-end vehicles, Miller noted that premium brands such as Mercedes-Benz and Audi account for just 7% of the company’s fleet of over 700,000 vehicles.
“It’s an unfair accusation, as the vast majority of our customers drive mainstream cars,” he said to the FT, adding that models like the Vauxhall vans and Nissan Qashqai remain the most popular choices.
The company has faced past scrutiny over executive bonuses and significant cash reserves. However, the latest wave of criticism questions whether the scheme has expanded beyond its original intent, reflecting broader concerns about the UK’s welfare system.
“Such rapid expansion in a scheme designed to support the most vulnerable highlights the need for serious but fair reform of both welfare and the state as a whole,” said Chris Curtis MP, co-chair of the Labour Growth Group.
Shadow Work and Pensions Secretary Helen Whately described Motability as a “textbook example of a well-meaning initiative that has spiralled out of control.”
Experts attribute the increase in disability benefit claims to cuts in other welfare provisions, which have created financial incentives for claimants to seek higher-tier payments. Additionally, the rising prevalence of mental health conditions since the Covid-19 pandemic has played a role in boosting applications.
Miller pointed out that soaring vehicle and insurance costs have also driven more people to the scheme. Motability not only leases vehicles but also covers insurance, tax, servicing, and breakdown assistance—shielding customers from market volatility but exposing the company to rising expenses.
Motability’s funding model relies on borrowing to acquire vehicles, which are resold in the used car market after three years. This makes the company one of the UK’s largest bond issuers. Although it operates under the oversight of the Motability Foundation, a registered charity, much of its revenue comes from the resale of used vehicles.
Despite the controversy, industry insiders argue that Motability plays a vital role in promoting electric vehicle adoption, particularly among lower-income households that may struggle with upfront costs or lack home charging facilities. The company has introduced tailored EV charging options for its customers as part of the transition to greener motoring.
“We’re committed to ensuring our customers can stay mobile during this shift to electric vehicles,” Miller said. “We just want to get it right and ensure the scheme is used as intended.”
