Mileage Limits on PCP and PCH — How Excess Mileage Charges Really Work in 2026

Every PCP and PCH quote you've ever seen has a number tucked next to the monthly figure. Annual mileage. 👀

It looks small. It isn't. Get it wrong and you'll either hand back a bill at the end, or you'll pay for thousands of miles you never drove.

Here's the plain-English version of how mileage limits and excess mileage charges actually work in 2026 — and how to size them properly before you sign.

Why mileage even matters on a finance deal

Both PCP (Personal Contract Purchase) and PCH (Personal Contract Hire) are built around one number: the car's predicted future value at the end of the agreement.

Lower mileage = stronger residual = cheaper monthly payment.

That's the whole game. Lenders set your monthly figure by assuming you'll stick to the mileage on the contract. Go over, and the residual value they assumed isn't accurate any more — so they charge you the difference.

This is not a penalty fee in the FCA sense. It's a contractual calculation written into the agreement you signed.

How the limit is set

When you build a quote online or in the showroom, you'll pick from options like:

• 6,000 miles per year
• 8,000 miles per year
• 10,000 miles per year (the most common UK choice)
• 12,000 / 15,000 / 20,000+ for higher-mileage drivers

Pick a 3-year deal at 10,000 miles, and your total contract mileage is 30,000 miles across the term. The lender doesn't check every month — they check at the end (PCH) or when you hand back / refinance (PCP).

💡 Tip: The annual figure on the quote is just the contract divided by years. What matters is the total number across the deal.

What excess mileage actually costs

Excess mileage is quoted in pence per mile and it's printed right on your finance agreement.

Typical 2026 ranges in the UK:

• Small petrol hatchbacks — 5p to 9p per mile
• Mainstream SUVs and saloons — 8p to 14p per mile
• Premium and EVs — 12p to 25p+ per mile
• Luxury / performance — 30p to 60p+ per mile is not unusual

A 5,000-mile overage at 12p is £600. The same overage on a premium EV at 25p is £1,250.

It adds up faster than most buyers expect — especially because VAT is usually included in the pence-per-mile figure on consumer deals, and you don't get any refund for going under.

PCP vs PCH — the rules differ

The biggest mistake people make is assuming both products treat mileage the same. They don't.

On PCP ✅ You have three end-of-term choices: return the car, pay the balloon, or part-exchange. Excess mileage charges only apply if you hand the car back. If you keep it (pay the balloon) or refinance into a new deal, the excess miles disappear — they were only relevant to the lender's residual.

On PCH 🚗 You're contractually returning the car. So excess mileage always applies. There's no option to "keep it and skip the charge." The lender owns the car; they need a clean handover at the mileage you agreed.

This is one of the cleanest reasons to think hard about which product fits your driving life before you sign.

How to size your mileage properly

A surprising number of drivers underestimate their annual mileage by 2,000-3,000 miles because they think about commuting and forget weekends, holidays and ad-hoc trips.

Two-minute check:

1. Look at your last MOT (or service record). Note the mileage and date. 2. Look at today's mileage and date. 3. Work out (today – then) ÷ months × 12. That's your real annual mileage.

Round up, not down. And add a buffer of 1,000-2,000 miles if your circumstances are changing — a new job, a baby on the way, an older relative you'll be driving to.

Adjusting mileage during the deal

Most lenders will let you vary the mileage mid-contract if you ask early. Going up usually means a small increase to the monthly payment and a recalculated balloon. Going down is harder — many lenders don't refund miles you don't use.

If you can see by month 12 of a 36-month deal that you're tracking 2,000 miles over per year, ring your lender now. A mid-contract variation is almost always cheaper than the end-of-term excess charge.

What about EVs? 🔋

Electric vehicles tend to have higher pence-per-mile charges because their residual values are more volatile and battery degradation is mileage-sensitive. Some EV-specific deals also include a separate battery state-of-health clause at return.

If you're buying an EV on PCH, factor that in. A 15,000-mile deal at 20p per mile is fine if you stick to it; the same deal at 20,000 miles driven is a £1,000 bill waiting for you.

The Reading / Berkshire angle 📍

If you live in Reading or commute into London from Berkshire, your daily mileage can swing wildly. A typical Reading-to-London hybrid worker doing 3 days a week in town is racking up roughly 9,000–11,000 miles a year from commuting alone — before family driving.

Sizing the contract correctly the first time saves a four-figure end-of-deal bill.

How We Finance Your Asset can help

At We Finance Your Asset, we walk every customer through the mileage sizing conversation before quoting a deal — because the cheapest monthly payment is meaningless if you're staring at a £1,500 excess bill in 36 months. 👉

We'll model two or three mileage tiers so you can see exactly what each one costs over the contract, and which product (PCP, PCH or HP) gives you the most flexibility for the life you actually lead.

📞 Get in touch via wefinanceyourasset.co.uk and we'll quote it properly the first time.