Motability has moved to distance itself from the alleged scam where cars are bought with modifications for disabled drivers without paying VAT and then sold on for a profit.

The modifications, such as steering wheel knobs, are alleged to have been removed – allowing the car to be sold on at a higher price than it was bought new because of the lack of VAT.

Motability only offers two ways of funding vehicles – hire purchase or contract hire and not outright purchase.

A Motability spokesman said: “The alleged scam depends on being able to buy a car and sell it on quickly at a profit, which is not possible within the Motability scheme.”