Recipients of Personal Independence Payment, Disability Living Allowance, and select benefits will be missing out on up to £750 from this month.
The Motability scheme has scrapped its £750 New Vehicle Payment for new car acquisitions as well as the £100 New Product Payment for those needing a wheelchair or scooter. These one-off payments indicated to cover upfront costs for leased vehicles ended just last week. Thus, they’re no longer accessible for any new orders taken at dealerships since January 4, meaning individuals will need to handle all fees independently.
While not always required, advance payments can exceed £1,500. For instance, there’s no upfront cost for the Vauxhall Corsa 1.2 Turbo 130 Ultimate 5dr Auto, but opting for the Peugeot e-3008 157kW GT 73kWh 5dr Auto demands at least £1,499 as an advance payment.
The scheme aims to provide “greater social and economic independence” for those eligible for higher rate mobility components of PIP and DLA.
This includes Scottish equivalents Adult Disability Payment (ADP) and Child Disability Payment (CDP), in addition to Armed Forces Independence Payment and War Pensioners’ Mobility Supplement beneficiaries. It lets them exchange a portion or all of their weekly £75.75 mobility allowance for a leased vehicle, detailed Birmingham Live, reports Chronicle Live.
Motability has recognised that the surge in motoring expenses, including insurance and changes within the car market, have led to steeper initial payments for certain vehicles. However, they emphasise that their scheme remains a highly economical choice, being substantially less expensive than other leasing alternatives.
Andrew Miller, CEO of Motability Operations which administers the programme, remarked: “Drivers are seeing increased costs across the UK due to rising inflation and the price of energy, and these external factors affect what we can offer to our customers. We’re working with car manufacturers and our partners to provide good value to our customers and the Motability Scheme is 45 per cent cheaper on average compared to alternative options.”
“We’re committed to ensuring the sustainability of the scheme during this unprecedented period of change so that we can continue to keep our customers connected now and in the long term.”
Moreover, Motability has clarified that although upfront payments for premium models have gone up, the rise is not as sharp as seen with other car lease services. They also highlighted that some advance payments have decreased, and the scheme proudly offers over 60 vehicles that come without any upfront cost, showcasing a variety of accessible choices for consumers.
Motability, a scheme utilised by 815,000 individuals, provides an all-inclusive package encompassing a brand-new car, comprehensive insurance, breakdown assistance, servicing, maintenance, and tyre/windscreen repairs. The scheme also takes care of car tax, as those on higher-rate benefits are already eligible for disability road tax exemption, meaning the vehicle is automatically taxed throughout the lease.
However, if you wish to transfer your exemption to another vehicle, you can choose to pay tax on your Motability car. To be eligible for vehicle excise duty exemption, the car must be registered in your name or that of your nominated driver.
It’s crucial to remember that nominated drivers cannot use the vehicle for personal needs. As only one vehicle tax exemption is permitted at a time, if you have another untaxed car, your Motability car will need to be taxed.
If you’re a recipient of the standard rate Personal Independence Payment mobility component, you won’t be eligible for full car tax exemption. However, you can avail a 50% discount.
To apply for this reduction, you need to send your details to DVLA, Swansea, SA99 1BF. This should include a letter from the DWP detailing your benefit payment rate, the dates you receive it and your name and address.
You’ll also need to provide the Vehicle Registration Certificate (V5c log book), a vehicle tax application form (V10), a cheque or payable order (made out to DVLA, Swansea) for 50 per cent of the full car tax rate, and an original MOT certificate (if your car requires one). If you’re a parent or guardian of a child receiving the higher-rate mobility component of DLA or Child Disability Payment, or if you’ve been appointed for a child or adult on higher-rate mobility support, you may be eligible to lease a vehicle on their behalf.
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