Defined

What Is Excess Mileage?

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Excess mileage is a per-mile charge you pay if you drive a PCP or lease car past its agreed annual mileage limit. Typical charges run from about 6p to 30p per extra mile.

When you take out a PCP or a lease, you agree an annual mileage limit. Drive further and the car is worth less than the lender expected, so they recover the difference through an excess mileage charge when you hand it back.

How excess mileage works

Your agreed mileage feeds into the car's GMFV — drive more and the car depreciates faster, so you pay a fixed pence-per-mile charge on every mile over the limit. It applies only if you hand the car back.

The rate is set in your agreement, often somewhere between 6p and 30p a mile depending on the car. If you keep the car by paying the balloon, there's nothing to pay. Choosing the right mileage at the start matters — too low and you'll be stung, too high and your monthly is needlessly large.

A worked example

Go 5,000 miles over your limit at 10p a mile and you'd owe £500 when you hand the car back (5,000 × £0.10).

Worked example

Excess mileage only bites if you return the car. See how mileage shapes a PCP — and the balloon — on the PCP calculator.

Frequently asked

What is excess mileage on car finance?

Excess mileage is a per-mile charge you pay if you exceed the agreed annual mileage on a PCP or lease and then hand the car back. The rate is fixed in your agreement, typically from about 6p to 30p per extra mile.

How do I avoid excess mileage charges?

Choose a realistic annual mileage at the start, and if you're going over, you can sometimes adjust the limit mid-agreement. On a PCP, you can also avoid the charge entirely by keeping the car and paying the balloon instead of handing it back.

Does HP have a mileage limit?

No. HP has no mileage limit and no excess mileage charge, because you're financing the full price and will own the car. Mileage limits apply to PCP and leasing, where the car's end value depends on how far it's driven.

Work out your next step

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How excess mileage works