Car finance options for high mileage cars

Getting the right deal for heavy use

If you rack up miles on the motorway or weave through city streets day after day, the car finance you choose will decide more than your monthly payment. It will shape your total cost of ownership, the freedom to drive as you wish, and the potential for surprises at the end of a term. In the UK, Personal Contract Purchase is popular for its low monthly payments, yet it comes with mileage limits. Go beyond those limits and you typically pay 7-10p per mile. Drive 1,000 miles over and you could owe £70-£100. For some, that is manageable. For high mileage drivers, it adds up quickly.

Hire Purchase looks different. You pay off the car over a set term and own it at the end. There are usually no mileage limits. Payments are often higher than PCP, but you avoid excess mileage charges and balloon payments. That predictability matters when your commute is long or your job takes you across the country.

Dealer finance blends choice and convenience. Many dealers package PCP and HP with flexible deposits, terms and sometimes servicing or warranty add-ons. The attraction is simplicity. The caution is cost - interest rates and extras vary, so comparison is essential.

Some drivers bypass car-specific finance altogether with a personal loan. You buy the car outright, remove mileage restrictions and become the owner from day one. Typical APRs for personal car loans sit around 6.9% to 8.8% depending on amount and term. You will need solid credit and a clear view of affordability.

Understanding APR is not just about percentages - it is about knowing what you will pay in real pounds and pence over time.

Electric and hybrid models are also in the mix. Lower running costs can offset higher purchase prices, and some brands offer deposit contributions on PCP. Just remember - mileage caps still apply on PCP even when the fuel is cheaper. The right choice balances your driving pattern, desire for ownership, and tolerance for end-of-term commitments.

Is this guide for you

If you drive more than the typical UK limits often seen in PCP - roughly 6,000 to 15,000 miles per year - this is for you. It is also useful if you split time between long commutes, school runs and weekend trips that push you near or beyond contracted caps. You may be weighing a used diesel workhorse against a newer hybrid or EV, or considering whether a dealer package beats arranging finance independently. You want clarity on costs, control over how much you drive, and a path that avoids penalties. This guide helps you decide between PCP, HP, dealer finance and personal loans, and explains when each can work for high mileage use.

Your finance routes at a glance

1. PCP - lower monthly payments, mileage-limited, optional final balloon payment.

2. HP - higher monthly payments, no mileage limits, ownership at term end.

3. Dealer finance - tailored PCP or HP with optional warranties and servicing.

4. Personal loan - own the car outright, no mileage caps, rates vary.

5. Salary sacrifice or leasing - convenient for EVs, often mileage-limited.

Rule of thumb: if you drive far, prioritise products without mileage penalties.

What it could cost you

Who can apply and what lenders look for

Most UK drivers with a stable income and a valid UK driving licence can explore finance. Lenders will check your credit profile, current commitments, income stability and the vehicle you are buying. For PCP, they will ask you to set an annual mileage. The closer this is to your real driving, the fewer surprises later. Expect to see typical caps between 6,000 and 15,000 miles a year. If you regularly exceed this, negotiate a higher limit upfront or consider HP to avoid per-mile penalties. With HP, affordability is central because the monthly payment is often higher but there is no end balloon. For personal loans, stronger credit usually translates into a sharper APR within the 6.9% to 8.8% range.

Kandoo is a UK-based retail finance broker. We work with a panel of lenders so you can compare options for high mileage use, whether that is HP on a used car, a flexible dealer-linked offer, or an unsecured personal loan to own outright. The goal is simple - match your real-world mileage and budget to a finance structure that will not penalise how you drive.

From quote to keys - a simple path

1. Estimate annual mileage and choose ownership preference.

2. Check your credit score and set a realistic budget.

3. Compare PCP, HP and personal loan APRs side by side.

4. If PCP, request a higher mileage limit upfront.

5. Review deposit, term length and optional add-ons carefully.

6. Read all fees - mileage, balloon, option-to-purchase, early settlement.

7. Sign digitally and confirm insurance, warranty and servicing.

8. Collect the car and track your mileage monthly.

Quick upsides and trade-offs

Read this before you sign

Start with the miles you really drive. If your commute and weekend use push you past 12,000 miles a year, a low-limit PCP is unlikely to be cost-effective once excess charges land at 7-10p per mile. If PCP still appeals for budget reasons, ask for a higher mileage limit at the outset and check the impact on monthly payments. If you prefer certainty, HP removes mileage worry altogether, trading lower risk for higher monthly cost. For dealer packages, value the add-ons properly - a warranty or servicing plan can help with older or high mileage cars, but do not overpay for convenience. Personal loans suit buyers who want ownership and flexibility, provided the APR and monthly payment fit comfortably. In all cases, compare the total cost, not just the monthly figure, and be clear about fees for early settlement, damage or excess miles at return.

Other routes to consider

1. Increase the PCP mileage allowance upfront to match real usage.

2. Choose a longer HP term to lower monthly payments without mileage caps.

3. Look at used car finance with flexible terms tailored for higher mileage.

4. Consider an EV with lower running costs to offset finance costs.

5. Explore salary sacrifice schemes if available through your employer.

Straight answers to common questions

Q: Are PCP mileage limits negotiable? A: Often yes. Request a higher allowance at agreement start. It will raise monthly payments but can be cheaper than paying excess mileage at the end.

Q: How much are excess mileage charges on PCP? A: Typically 7-10p per mile. Go 1,000 miles over and you may pay £70-£100, which can mount up for long-distance drivers.

Q: Is HP better for high mileage drivers? A: Frequently. There are generally no mileage limits on HP, so you avoid per-mile penalties and finish as the owner.

Q: What APR should I expect on a personal loan? A: Many UK personal car loans sit roughly between 6.9% and 8.8% APR, depending on credit score, loan size and term.

Q: Do dealer finance packages offer good value? A: They can. Convenience and bundled servicing or warranties help, particularly on older or high mileage cars. Always compare APR and total cost with independent options.

Q: Do deposit contributions make PCP cheaper overall? A: They lower the upfront cost, sometimes by thousands, but PCP still has mileage caps and a potential balloon. Factor excess mileage and end-of-term choices into the total.

Ready to compare with Kandoo

If you drive far, clarity beats guesswork. Kandoo can help you compare PCP, HP, dealer finance and personal loans against your real mileage, budget and preferred term. Get a tailored view of costs before you commit and choose a finance route that supports how you actually drive.

Important information

This guide is for general information only and is not financial advice. Finance is subject to status, terms and conditions and affordability checks. APRs and offers may change. Always read your agreement carefully before signing.