Quick question if anyone can help as we know VAT relief for top-up payments made to lease more expensive vehicles will be removed for new leases from July 2026, and Insurance Premium Tax will apply at the standard rate to insurance contracts on the scheme. Q is if a standard car lease end date is Sep 2026 and they can sign up for a new lease 3 months before lease ends Say June 1st 2026 will that avoid the new AP/Insurance changes Thanks in advance
I suppose technically the lease commences when you enter your PIN (i.e. upon collection of the vehicle).
Until that point you only have ‘an order’ and a ‘locked in’ Advance Payment Price, locked in at the time of order, but you are free to walk away at this stage.
I fear that the date of 1st July was chosen as it is the start of a quarter 3. Current customers with a lease end date on or after 1st July will have to order on or after 1st of April (start of Q2), which is when I suspect the VAT/IPT will be incorporated into the Advance Payments, as the vehicles will be delivered (and thus the new contract starts) on or after 1st July (ie on or after current contract end).
An interesting point would be for a brand new Motability customer ordering after 1st April, but taking a ‘short notice’ or stock car with delivery prior to 1st July. Likewise with quick Early Terminations with delivery of the new car before 1st July if a stock vehicle. Motability may have to publish separate price guidance for these types of scenarios.
No doubt Motability will issue guidance in due course.