Existing DLA recipients who do not receive the enhanced mobility component rate under PIP will lose eligibility to the Motabilty scheme and thus will have to return their vehicle or, in some cases, they may be able to buy the vehicle. Those losing their vehicle may, of course, acquire a vehicle via an alternative source.

Similarly, in terms of new cars joining the Motability lease car scheme there will be no sudden reduction in volume, according to the experts that could trigger an explosion in tactical marketing by either motor manufacturers or franchise dealers.

The Society of Motor Manufacturers and Traders (SMMT) anticipates new car sales to rise in the coming years as the economy recovers from recession. As a result, Parkin believes any shortfall in Motability demand will be naturally absorbed by the UK market by better than initially anticipated demand.

“A percentage of people who do not qualify for a Motability vehicle in the future will use alternative funding to obtain a new car and, as the timescale for the change in rules allows motor manufacturers to plan volumes over the coming years I don’t see any dramatic impact on new car sales,” he said.

Nothard added: “Motor manufacturers and dealers have a long period of time to manage their way through any change to the size of the Motability fleet.

“Additionally, whatever happens to the size of the Motability fleet in reality anyone who loses their allowance is likely to fund a vehicle through a different avenue.”

How the Motability fleet has expanded in recent years:

2011/12 – 610,000
2010/11 – 600,000
2009/10 – 550,000
2008/09 – 500,000
2007/08 – 490,000
2006/07 – 460,000

Government view on DLA

The Government says that the Disability Living Allowance (DLA) must be reformed because it is unsustainable in the long term.

The Department of Works and Pensions (DWP) says there are now 3.2 million people receiving DLA with forecast expenditure on the benefit for 2011/12 being £12.6 billion. In nine years the number of people claiming DLA has risen from just under 2.5m - an increase of around a third.

Personal Independence Payment (PIP) will be introduced from April 8, 2013 and will replace DLA for eligible working age people aged 16 to 64 with reassessments completed by 2018. By May 2018 the whole DLA caseload, including children, 16-64 year olds and the over 65s, would be around 3.6m without reform, but three million with the introduction of PIP, according to DWP.

DWP says it will award PIP based upon an assessment of an individual’s ability to carry out a range of everyday activities. How much an individual receives will depend on their health condition or disability.

The allowance paid will be composed of two sums - a daily living component and a mobility component. There are no current plans to replace DLA for children under 16 and people aged 65 and over who are already receiving DLA.

It is anticipated that the overall impact of reform will result in savings equivalent to 20% of forecast working age DLA expenditure - an estimated saving to the taxpayer of £2.24 billion.