Experts have called on drivers to take matters into their own hands to retain a saving of up to 75 per cent on their car insurance, amid fears that almost one million drivers could lose their eligibility.

More than 800,000 drivers could be impacted by an update to the Motability scheme announced by Chancellor Rachel Reeves in the Budget last month.

The Motability scheme has been operational for more than 30 years, and helps people claiming Personal Independence Payments (PIPs) to exchange their monthly allowance for a new vehicle.

These vehicles will often be modified to suit the needs of the driver, including steering aids, remote control devices, electric hoists and swivel seats.

Speaking during the Budget at the end of November, the Chancellor said: “The Motability scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz.

“So I am making reforms that will reduce generous taxpayer subsidies and Motability have confirmed that they will remove luxury vehicles from their scheme.”

The Chancellor noted that the move would get the scheme “back to its original purpose of offering cost-effective leases to disabled people”.

Rachel Reeves added that the Government would limit tax breaks available to Motability and other qualifying schemes in a bid to save over £1billion over the next five years.

Experts are now warning that thousands of motorists who make use of Motability could lose their entitlement and have to fork out more for private motor insurance.

Drivers must ensure that they know what to do to get a no claims bonus (NCB) if they need to take out a new insurance policy.

Gerry Bucke, general manager of Adrian Flux, said: “Drivers who exit the scheme and end their lease may not know that they will not automatically get a no claims bonus.

“They will need to request a claims history letter from the insurer, RSA Motability (RSAM), to make sure they are eligible to get the appropriate discounts on their next policy.

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“For some with several years of claim-free driving, those savings can be as high as 75 per cent, so it’s an opportunity motorists won’t want to miss.”

However, the expert warned that many insurance providers do not accept the letter in lieu of a no claims bonus, although some do.

He informed motorists that it was “definitely worth getting that piece of paperwork”, adding that it “could be worth a lot of money”.

Orders for new vehicles removed from the Motability scheme have been restricted since the start of December, while VAT relief for top-up payments made to lease more expensive vehicles will be removed from July 2026.

As part of the sweeping changes made to the Motability scheme in the Budget, the inclusion of overseas breakdown cover will be discontinued, while lease mileage limits will be reduced.

Insurance Premium Tax will also be applied at the standard rate of 12 per cent for insurance related to vehicles leased through the Motability scheme.

Andrew Miller, CEO of Motability Operations, said customers frequently express how the scheme provides them a “lifeline to freedom and independence.

“Working with Government and the automotive sector, we want to do even more to support the economy and our ambitious commitment should put British car manufacturing into top gear,” Mr Miller said.