Car finance options for taxi drivers

Getting the right finance for taxi work in the UK

Choosing finance for a taxi is not the same as buying a family car. Many standard car finance agreements exclude commercial use, which means driving passengers for hire could breach your contract and risk penalties or even repossession. The solution is specialist taxi finance designed for GB drivers, with terms that recognise higher mileage, more frequent wear and tear, and licensing requirements.

Specialist brokers and lenders understand how taxi businesses operate - from black cabs and saloons to MPVs and electric models. Expect them to ask for proof of income, your taxi or PHV licence, and a deposit that typically starts from 10 percent. If you drive for private hire or ride-hailing platforms, you may see PCO or PHV finance referenced. These are tailored products for licensed private hire drivers, often with flexible terms and compliant vehicle criteria.

If your credit history is less than perfect, options still exist. Many UK providers consider applications with missed payments, CCJs or debt management plans, provided affordability stacks up. You may face a higher rate or larger deposit, but access to a suitable vehicle can keep your earnings on track.

Electric and hybrid taxis are increasingly attractive, particularly in cities with clean air or ultra low emission zones. Some finance providers offer sharper terms on low-emission vehicles to reflect lower running costs and improving residual values. Fleet operators can also access multi-vehicle packages with tailored rates and mileage policies, including offers with no mileage caps that suit high-use drivers.

Understanding APR is not only about percentages - it is about the pounds you will pay over the term, and how the agreement fits your cash flow.

If you want flexibility at the end of the term, PCP can reduce monthly payments, though mileage limits and condition standards apply. Hire Purchase gives straightforward ownership once the final payment is made. Leasing can keep upfront costs low and simplify budgeting. The right route depends on how you work, your licence, your mileage, and your plans for the vehicle.

Bottom line: choose finance that explicitly permits taxi or PHV use, supports your mileage, and aligns with your earnings pattern.

Who benefits from this guide

This guide is for UK taxi and private hire drivers who need a vehicle financed for commercial use. Whether you are new to the trade, switching from street hail to ride-hailing, or expanding a small fleet, the sections below explain how specialist finance works and what lenders look for. It is also useful if you have thin or imperfect credit history, are considering an electric or hybrid model to navigate ULEZ efficiently, or want to refinance an existing taxi to cut monthly costs or unlock capital for an upgrade.

Your finance routes at a glance

1. Hire Purchase - fixed term, fixed payments, ownership at the end.

2. Personal Contract Purchase - lower monthly payments, option to buy or hand back.

3. Operating Lease - rent the vehicle, often with maintenance options.

4. Finance Lease - pay rentals, sell at term end to settle residual.

5. PCO or PHV-specific packages - tailored to private hire licensing and mileage.

6. Electric and hybrid taxi finance - preferential terms and support in ULEZ areas.

7. Bad credit taxi finance - considers CCJs, DMPs and thin files with affordability checks.

8. Refinancing or equity release - reduce payments or fund upgrades.

9. Fleet finance - multi-vehicle solutions for operators with flexible structures.

What it costs and why it matters

Can you qualify

Most taxi finance providers will want to see your taxi or PHV licence, proof of income and identity, and evidence that the vehicle is suitable for commercial work. If you operate in London or other regulated cities, ensure the car meets local licensing rules, including emissions and accessibility where required. Lenders typically ask for a deposit from 10 percent, although some deals offer lower upfront costs for specific models such as purpose-built taxis, or for applicants with strong credit.

Bad credit does not automatically exclude you. Many UK brokers and lenders assess affordability first, looking at regular fares, platform statements and bank activity. You may face a higher rate or a larger deposit, but if your cash flow is steady and the vehicle is integral to your income, approval is still possible. If you are moving from street hail to private hire, PCO or PHV finance packages align the agreement with your licence, mileage profile and platform requirements.

Kandoo works with a panel of UK finance partners to help match drivers with suitable taxi-friendly agreements. That includes options with no mileage caps, refinancing for better terms, and EV-focused products that support work in ULEZ areas. Always confirm the agreement explicitly permits commercial use to stay compliant.

Apply in simple steps

1. Confirm your licence and target vehicle requirements.

2. Choose the finance type that suits your cash flow.

3. Gather income proofs, ID and deposit funds.

4. Get a soft-check quote and review the APR.

5. Verify commercial use and mileage terms in writing.

6. Submit the application and underwriting documents.

7. Sign, collect the vehicle and start earning.

Weighing it up

Read this before you commit

Always check your agreement states commercial use is permitted. If it does not, carrying passengers for hire could breach terms. Understand your mileage policy and how excess charges are calculated. If choosing PCP or a lease, plan early for the final payment or return conditions to avoid last-minute refinancing under pressure. For EVs, factor charging access at home and on shift, along with battery warranty and residual value assumptions. Review insurance, including public liability and GAP cover, so a write-off does not leave you with a shortfall. Finally, compare total cost over the term, not just the monthly payment, and verify that the APR is fixed if you want predictable outgoings.

Alternatives if your plan changes

1. Buy a cheaper used taxi with shorter remaining term.

2. Short-term rental or rent-to-buy while building income history.

3. Secured loan against another asset to reduce APR.

4. Business loan for a larger fleet or deposits.

5. Extend current vehicle with a maintenance refresh before financing anew.

Common questions

Q: Do I need a taxi or PHV licence before applying? A: In most cases yes. Lenders want proof that you can operate the vehicle commercially and comply with local regulations.

Q: Can I get taxi finance with bad credit? A: Many UK brokers consider all credit circumstances. You may face a higher APR or need a larger deposit, but affordability and steady income can lead to approval.

Q: Are there options with no mileage limit? A: Yes. Some providers offer no mileage cap to suit high-usage drivers, reducing the risk of excess charges.

Q: Is PCP suitable for taxi drivers? A: It can be, thanks to lower monthly payments and end-of-term flexibility. Check that commercial use is allowed and understand mileage caps and condition standards.

Q: Do EVs get better finance terms? A: Often, yes. Providers may support EVs and hybrids with sharper terms, reflecting lower running costs and ULEZ benefits. Assess charging and range for your shifts.

Q: What deposit will I need? A: Deposits typically start from 10 percent, though stronger credit or specific vehicles may unlock lower upfront costs.

Q: Can I refinance my current taxi? A: Yes. Refinancing can lower monthly payments, release equity for upgrades or consolidate existing taxi loans.

Start your application

Ready to compare taxi-ready finance with confidence? Kandoo connects UK drivers to a panel of lenders who understand commercial use, high mileage and PHV licensing. Share a few details, review tailored quotes and choose a package that fits your earnings pattern and vehicle plans.

Important information

This guide is general information, not advice. Eligibility, rates and terms depend on your circumstances and credit status. Always read your agreement and seek independent tax or legal guidance where needed. Commercial use must be confirmed in writing.