Sounds like a good idea but as pointed out by someone else there are too many risks. Some people would default on payments and Motability would also need to charge those wanting to pay monthly more than the AP divided by 36, or the loss of interest and cash flow impact for Motability Operations would result in further increased AP’s for everyone else.
The option for a 5 year lease already exists. It would be foolish to make that mandatory. Keep in mind that if you run a Motability car for 5 years you are surrendering £16,250 in sacrificed PIP on top of the AP which, for many cars, would be an outlay of around £20k. The financial benefits of running a car through Motability versus the private route have already narrowed, but more and more people would find better value outside the scheme if it were to be mandatory, especially for those driving the cheaper cars on the scheme.