Hundreds of thousands of disabled drivers across the UK are confronting the prospect of a dramatic 75 per cent increase in their car insurance costs following a major change to a key government scheme announced in the Budget.
Budget Announcement Alters Motability Scheme
During her November Budget statement, Labour Chancellor Rachel Reeves unveiled reforms to the Department for Work and Pensions (DWP) Motability scheme. The programme helps disabled people lease adapted vehicles.
Reeves stated the scheme was created "to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz." She confirmed reforms would "reduce generous taxpayer subsidies" and that Motability Operations would remove luxury vehicles from its offerings.
The Chancellor argued this would return the scheme to its original purpose of providing cost-effective leases to disabled people. The changes could affect the eligibility of an estimated 800,000 current users.
Critical Warning Over No Claims Bonuses
Insurance experts are now issuing an urgent warning to those who may exit the scheme. Gerry Bucke, General Manager of specialist broker Adrian Flux, highlighted a potentially costly oversight for departing drivers.
"Drivers who exit the scheme and end their lease may not know that they will not automatically get a no claims bonus," Bucke explained. "They will need to request a claims history letter from the insurer, RSA Motability (RSAM)."
This document is essential to prove a claim-free driving record to new insurers. Bucke stressed that for drivers with several years of safe driving, securing this proof could retain savings of up to 75 per cent on their next car insurance policy.
"It's definitely worth getting that piece of paperwork," he urged, "it could be worth a lot of money."
Scheme's Value and Future Direction
The Motability scheme is widely recognised for providing vital mobility and independence. Andrew Miller, CEO of Motability Operations, noted customers frequently describe it as a "lifeline to freedom and independence."
Regarding the future, Miller added, "Working with Government and the automotive sector, we want to do even more to support the economy and our ambitious commitment should put British car manufacturing into top gear."
The immediate focus for many, however, is navigating the eligibility changes. Drivers potentially affected by the DWP rule change are being strongly advised to proactively contact RSAM to secure their claims history. This simple step could prevent them from losing significant insurance discounts built up over years of safe driving.
