PCO Car Finance: The Complete Guide for Private Hire and PCO Drivers

However, one of the biggest hurdles for new and existing drivers is vehicle acquisition. This is where PCO car finance comes into play – a specialised financing solution designed specifically for private hire drivers.

This guide covers everything you need to know about financing your PCO vehicle, from basic requirements to application tips and common pitfalls to avoid.

What is PCO Car Finance?

PCO car finance refers to specialised vehicle financing options available to drivers with a Private Hire Vehicle (PHV) license, also known as a PCO license.

The term “PCO” stands for Public Carriage Office, which was the organisation that previously regulated London’s taxi and private hire industry before Transport for London (TfL) took over.

Also read: Differences between PCO and PHV (Private Hire Vehicle)

Unlike standard car finance, PCO car finance is tailored to meet the specific needs of private hire drivers.

These finance packages take into account the unique circumstances of drivers who use their vehicles to generate income through platforms like Uber, Bolt, and other ride-hailing services.

Finding the right PCO car finance option can significantly impact your profitability as a private hire driver. These specialised finance solutions often include features that standard car loans don’t offer, such as:

Higher mileage allowances to accommodate the extensive driving required
More flexible repayment terms that align with driver earnings patterns
Vehicles that meet all TfL requirements for private hire work
Inclusive insurance and maintenance packages

What are the Types of PCO Car Finance Options?

Private hire car finance is specifically designed for drivers working with platforms like Uber and Bolt. When exploring your options, you’ll typically encounter several different financing structures:

Hire Purchase (HP) With PCO car hire purchase agreements, you’ll own the vehicle after making all the scheduled payments. This option works by:

Paying an initial deposit (typically 10-20% of the vehicle value)
Making fixed monthly payments over an agreed term (usually 3-5 years)
Gaining ownership of the vehicle once the final payment is made

Hire purchase is popular among drivers planning to keep their vehicles long-term and who want to build an asset.

Curious to see which cars are available for PCO hire? Have a look at our PCO Cars for hire

Personal Contract Purchase (PCP) PCP offers lower monthly payments but includes a larger final “balloon payment” if you wish to own the car:

Initial deposit followed by lower monthly payments
Option to pay the final balloon payment to own the car
Alternative options to return the vehicle or trade it in for a new one
Mileage restrictions that may be challenging for high-mileage PCO drivers

Lease Options Leasing can be suitable for drivers who prefer to upgrade their vehicles regularly:

Fixed monthly payments with no ownership option
Typically includes maintenance packages
The vehicle is returned at the end of the agreement
May include mileage restrictions that need careful consideration

Rent-to-Buy Schemes These hybrid options have become increasingly popular in the PCO market:

Higher weekly payments that contribute toward eventual ownership
More flexibility to change vehicles or exit the agreement
Often includes maintenance and sometimes insurance
Can be more accessible for drivers with limited credit history

Curious to see which cars are available for PCO rent to buy? Have a look at our PCO rent-to-buy Cars

Requirements for PCO Car Finance

he basic PCO car finance requirements typically include proof of your PCO license, driving history, and income verification. Before applying for finance, ensure you have:

1. Valid PCO License

You’ll need to obtain your PCO license before finalising most PCO car finance agreements. The PCO license application process should be started well before you begin looking for vehicle finance. This license confirms you’re authorised to work as a private hire driver.

2. Driver Requirements

Lenders typically look for:

Valid UK driving license (usually held for at least 12 months)
Age requirements (typically 21-70 years old)
Address history (usually need to be a UK resident for at least 3 years)
Right to work in the UK

3. Financial Requirements

Be prepared to provide:

Proof of income (typically 3-6 months of bank statements or earnings statements)
Tax returns or accounts if you’re self-employed
Details of existing financial commitments
Credit history (though options exist for those with poor credit)

4. Vehicle Requirements

Not all vehicles qualify for PCO work. The vehicle must:

Meet TfL age requirements (typically less than 10 years old)
Pass the TfL inspection
Have appropriate insurance for private hire work
Meet environmental standards (increasingly important with ULEZ expansion)
Have at least 4 doors and seat at least 4 passengers

RELATED: The Impact of your driving history on finance - A Complete Guide

Which cars are eligible for PCO?

Cars eligible for a PCO (Private Carriage Officer) licence in London must be zero-emission capable (ZEC) and meet Euro 6 emissions standards, meaning they are typically electric or plug-in hybrid vehicles. Common eligible cars include the Kia Niro EV, Nissan Leaf, MG ZS EV, Toyota Prius Plug-in, and Tesla Model 3.

In addition to emissions, the vehicle must be 10 years old or newer, licensed to carry up to four passengers, be in good condition, and have valid registration.

Key Eligibility Requirements:

Emissions Standards: For newly licensed vehicles, the requirement is Zero Emission Capable (ZEC) and Euro 6 compliant.
Vehicle Age: Generally, vehicles must be 10 years old or newer.
Vehicle Type: The car must be a 4-door vehicle or a minivan, licensed to carry up to four passengers.
Condition: The vehicle's condition must be good, with no cosmetic damage, and it must pass a PCO vehicle inspection.
Registration: The vehicle's licence plates must be registered and valid.
No Branding: PCO-eligible vehicles should not have commercial taxi branding or markings.

Read more: Uber Cars Eligibility Requirements in the UK

Examples of PCO-Eligible Cars

Many newer electric and plug-in hybrid models are popular choices:

Kia Niro 2 EV
Nissan Leaf
MG 5
Tesla Model 3
Toyota Prius Plug-in
Mercedes E-Class

What are the Benefits of PCO Car Finance?

Specialised PCO car finance offers several advantages over standard car loans or buying outright:

1. Lower Initial Costs

Starting a career as a private hire driver becomes more accessible with:

Lower deposits compared to traditional car purchases
The ability to start earning immediately without a large capital outlay
Options to include insurance and maintenance in monthly payments

2. Business-Focused Terms

Many drivers don’t realise that PCO car finance terms can be negotiated based on their driving history. These specialised packages often include:

Higher mileage allowances that accommodate private hire work
Flexible payment terms that align with earning patterns
Understanding of the business use of the vehicle

3. Vehicle Suitability

PCO finance providers ensure vehicles meet all necessary requirements:

Compliance with TfL regulations
Appropriate vehicle types that passengers prefer
Fuel-efficient models that reduce running costs
Electric vehicle options with additional incentives

4. Tax Benefits

Financing a PCO vehicle can offer tax advantages:

Potential to claim finance interest as a business expense
Vehicle depreciation allowances
Maintenance and running costs as business expenses
Specialised advice on maximising tax efficiency

Uber Car Finance: Special Considerations for Drivers

Uber car finance partnerships can sometimes offer better rates than generic PCO finance options. As one of the largest ride-hailing platforms, Uber has specific requirements and sometimes offers special arrangements for drivers:

Platform-Specific Requirements

Vehicle age restrictions may be stricter than general PCO requirements
Passenger rating considerations may influence vehicle choice
Uber Comfort, Exec, and other tiers have specific vehicle requirements

Partner Programs

Uber sometimes partners with specific finance companies to offer driver deals
Vehicle rental programs designed specifically for Uber drivers
Potential incentives for electric vehicle adoption
Before committing to Uber car finance, compare the total cost with independent PCO finance providers

What is the difference between Taxi Finance and PCO Car Finance?

Traditional taxi finance often has stricter vehicle requirements than modern PCO car finance options. If you’re considering both traditional taxi work and private hire, understand the key differences:

Traditional Black Cab Finance

Significantly higher vehicle costs for purpose-built taxis
Longer finance terms to accommodate higher purchase prices
Specialised lenders familiar with the taxi industry
Potentially higher earning potential to offset higher costs

Crossover Considerations

Many drivers transitioning from black cabs to private hire find that taxi finance experience helps with PCO applications. When comparing options:

Consider the flexibility of vehicle use across different work types
Evaluate the total cost of ownership, including fuel, maintenance, and depreciation
Assess market demand for different service types in your operating area

PCO Car Finance for Bad Credit: Solutions and Alternatives

There are specialised lenders who offer PCO car finance for bad credit situations, though rates may be higher. If you have credit challenges:

Specialised Bad Credit Lenders

Some finance companies focus specifically on drivers with credit issues
Higher interest rates, but more accessible approval criteria
Potential to refinance after establishing payment history

Building Your Application Strength

Larger deposits can offset credit concerns
Proof of stable earnings from private hire work
References from existing platform relationships
Co-signer options in some cases

Alternative Approaches

Rent-to-buy schemes often have less stringent credit requirements
Vehicle rental with option to purchase
Peer-to-peer lending options
Guarantor loans when available

Is Finance for Electric PCO Cars More Convenient?

Electric PCO car finance often comes with government incentives that can reduce your overall costs. The shift toward electric vehicles offers significant advantages for PCO drivers:

Financial Incentives

Government grants and incentives for electric vehicle purchase
Reduced or zero congestion charge in London
Lower road tax and running costs
Better residual values in many cases

Operational Benefits

Lower daily running costs with electric charging vs. fuel
Reduced maintenance requirements
Passenger preference for eco-friendly vehicles
Future-proofing against upcoming emission regulations

Financing Considerations

Specialised electric vehicle finance packages
Higher initial purchase price but lower lifetime costs
Charging infrastructure requirements
Battery warranty and longevity considerations

How to Apply for PCO Car Finance?

The application process for PCO car finance typically follows these steps:

1. Preparation

Ensure your PCO license is valid and up to date
Gather proof of income and address history
Check your credit report for any issues
Research vehicle options that meet requirements

2. Comparison Shopping

When comparing PCO car finance providers, always check if they include maintenance packages in their offers. Look at:

Interest rates and the total cost of finance
Flexibility of terms and early repayment options
Included extras like maintenance, insurance, or breakdown cover
Reputation and reviews from other drivers

3. Application Process

Complete the finance application (usually available online)
Provide required documentation
Undergo credit and affordability checks
Review and negotiate terms if possible

4. Vehicle Selection and Inspection

Choose a vehicle that meets all requirements
Arrange an inspection and test drive
Verify TfL compliance
Check vehicle history and condition

5. Finalisation

Review and sign finance agreements
Arrange insurance coverage
Complete vehicle registration and licensing
Schedule vehicle delivery or collection

What are the Common Challenges and How Can You Overcome Them?

1. Deposit Requirements

Challenge: Many finance options require substantial deposits
Solution: Some providers offer low or no-deposit options, though these may come with higher interest rates
Alternative: Consider deposit contribution offers or savings specifically for this purpose

2. High Mileage Concerns

Challenge: Private hire work involves high mileage, which can affect finance terms
Solution: Look for unlimited mileage packages or realistic high-mileage allowances
Consideration: Factor in the cost of excess mileage charges when comparing deals

3. Vehicle Depreciation

Challenge: High mileage accelerates depreciation
Solution: Consider vehicles with strong residual values
Strategy: Electric vehicles often maintain value better despite mileage

4. Balancing Costs and Earnings

Challenge: Ensuring finance payments remain affordable during earning fluctuations
Solution: Build a financial buffer for slower periods
Approach: Consider flexible payment options that align with earning patterns

Conclusion

PCO car finance provides specialised solutions for private hire drivers that address the unique challenges and opportunities in this industry. By understanding the various options available, requirements, and potential pitfalls, you can make informed decisions that support your success as a driver.

Remember that the right finance option depends on your individual circumstances, including your credit history, driving patterns, and long-term goals. Take time to compare different providers, read the fine print, and calculate the total cost of ownership before making your decision.