More than 50,000 disabled people have had specially adapted vehicles taken away since changes to disability benefits in 2013.
The Motability scheme entitles disabled people to lease a specially adapted new car, scooter or powered wheelchair using part of their benefit.
But the charity says that 51,000 people have had vehicles taken away since the benefits system was changed in 2013.
The government says there are more people on the scheme now than in 2010.
Changes to the assessment process came in five years ago when personal independence payments (PIPs) were launched to replace the disability living allowance (DLA).
Of the 51,000 taken off, more than 3,000 people have since rejoined the scheme after the original decision to refuse them PIP was overturned.
Recipients of PIPs are assessed using a points system to determine what level of help they receive.
To qualify for the higher level of the mobility component of PIPs, which is needed to lease a Motability vehicle, there are a number of criteria, including being unable to walk unaided for 20 metres. This is compared with the previous distance of 50 metres under the DLA.
The charity Muscular Dystrophy UK said 900 cars are now being taken away every week, as more people are rejected for PIP.
Campaigners, including the Conservative MP Peter Bone, are now demanding changes to the Motability programme, so that vehicles are not taken away before claimants have had a chance to appeal against a decision.
Mr Bone said: "You need it for mobility purposes and maybe you use it for work, but because you lose your PIP award you lose the car at the same time.
"You appeal against the PIP award and ultimately the tribunal awards you back the PIP, but you've already lost the car and maybe your job because of it."
Labour MP and former work and pensions minister Angela Eagle added: "What's happening in the worst cases is, from being mobile and being able to get out and about in a car, that's been removed and this may mean people have had their ability to live their life at taken away, and some of them are left housebound."
Mother's mobility 'tested with a tickle'
Sam Adams, 41, had her Motability vehicle taken away from her in June last year after being reassessed for PIPs.
Ms Adams, who has multiple sclerosis, says the assessor did not see her walk.
"How she came to that conclusion, when she's not seen me walk, she's not seen me walk up and down stairs - all she did was tickle my hand with a feather.
"What conclusions she was coming to from tickling my hand with a feather, I'll never know." she said.
In previous assessments the 41-year-old, who originally qualified for a vehicle in 2014, said she had been asked to walk up stairs and physically show how mobile she was.
She has now overturned this decision through the tribunal process and been awarded the higher rate of mobility, qualifying her for a Motability vehicle, which she expects to get by the end of April.
In the meantime, she has been using a car her brother bought to take her children to school, as well as running errands with her mother, who is in her 80s.
Ms Adams, from Chesterfield, said: "If my brother hadn't bought me one I'd have been stuffed, because I can't get anywhere without a car.
"Without a car I honestly could have got depression, not going out - it would drive me up the wall".
Figures from the Department for Work and Pensions (DWP) show that since PIPs were introduced, more than 160,000 people have had their original rejection overturned at mandatory reconsideration or at appeal.
Some 65% of decisions are now overturned at tribunal in the claimant's favour, according to the latest Ministry of Justice statistics.
Nic Bungay, director of campaigns, care and information at Muscular Dystrophy UK, said: "Each of the 51,000 vehicles being taken away is a story about a disabled person's independence being compromised.
"This is having a devastating effect on quality of life.
"The fact that two-thirds of people who contest their PIP award win their case shows that the system isn't working and is in urgent need of reform."
The DWP says a fraction of PIP decisions are overturned, while those taken off the Motability scheme are eligible for £2,000 of support.
A DWP spokeswoman said: "The reality is that, since PIP was introduced in 2013, more than two million decisions have been made; of these just 7% have been appealed and 3% have been overturned.
"But we constantly review our processes, to make sure they are working in the best way possible".
She said there are now 70,000 more people on the Motability scheme compared with 2010.