So you get the higher rate of the mobility component of PIP and want a car you have 2 choices
1) Choose a car from the Motability Scheme, they will take all of this component (usually) of PIP. You pay nothing other than fuel.
2) Decide to use the money to purchase a new vehicle yourself and if it has substantial adaptations to allow a disabled person to drive or travel in the vehicle is VAT exempt. Additionally, all servicing parts etc (but not fuel) is VAT exempt too while you own the vehicle. This also applies to used vehicles but only if VAT is charged on the sale.
So they could have gone down route 2.