Motability are unlikely to bring back HP and there are many reasons for this.
Firstly, Motability’s Financial Conduct Authority (FCA) licence is a restricted licence limiting them to leasing vehicles to certain customers only. To offer Hire Purchase (which is regulated by the FCA) they would need to obtain a full banking licence as they are effectively loaning money to the hirer. There are many hoops and hurdles nowadays to obtaining such a licence, and many obligations they would have to carry out. .
One is that affordability checks on the HP hirer (including CRA checks) must be carried out – else Motability could be fined by the FCA for permitting unaffordable loans.
Another problem for Motability is under HP rules, the vehicle can be returned once a percentage of the HP payments are made. The vehicle could at that stage be worth less than the outstanding finance, potentially leaving mb on the hook.
Another issue is if the vehicle is written off during the loan period. Bearing in mind insurance would be the responsibility of the hirer – what if they have failed to pay for/renew the insurance. Motability would be left holding the short end of the stick.
Similarly, if the hirer simply instructs the DWP to stop paying Motability (as is their right). Do Motability then want to be seen repossessing vehicles from disabled people? If finance is still outstanding at this point again they would no doubt be looking at legal action to reclaim as well (else it is unfair on those who do pay).
Then, what rate of interest would they charge? No matter what it is, customers will say it is too high and Motability are exploiting disabled people!
Is there any wonder mb binned HP a number of years ago and that was before the current FCA regulations came into being.