If your new car is delayed, Motability will automatically extend your lease for as long as is needed. If you choose not to order a new car after 3 years you can choose to extend by either 1 or 2 years. However, there is nothing whatsoever to be gained by extending for 1 year, as you cannot (under normal circumstances) extend a second time. If you extend for 2 years then you are able to order another car at any time within that 2 years, even the week after your 2 year extension has been agreed, so it’s daft not to extend for 2 years
Keep in mind that Motability still charge the full enhanced mobility element of PIP (or equivalent) for all of the extended lease. You get no discount for running a 4 or 5 year old car. So what is very nearly £10,000 of sacrificed benefits over 3 years becomes well over £16,000 with a 5 year lease. That’s a very good deal for Motability but less so for the customer. However, you don’t have to find a new AP which is a help for some. Additionally, with the current appalling choice and ever increasing AP’s, lease extensions my be the only way of remaining in the scheme for those who do not have the option of leaving Motability and going private, as many are starting to do.