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Can you use a financed car for Uber?

Driving for Uber has become a popular way for many people to earn extra income or even make a full-time living. However, one of the key considerations for prospective Uber drivers is the vehicle they will use.
Can you use a financed car for Uber


A common question that arises is whether it is possible to use a financed car for Uber. This article explores the various aspects of using a financed car for Uber, including the types of financing available, the benefits and drawbacks, and the legal and practical considerations.

Types of car financing

There are several ways to finance an Uber, each with its own set of terms and conditions. The most common types of car financing include:

Hire Purchase (HP)

This is a straightforward form of car finance where you pay an initial deposit followed by fixed monthly payments. 

Once all payments are made, you own the car outright. HP agreements typically do not have mileage restrictions, making them suitable for Uber drivers who may cover significant distances.

Personal Contract Purchase (PCP)

PCP is similar to HP but with a few key differences. You pay lower monthly payments, but at the end of the term, you have the option to either make a final “balloon payment” to own the car, return the car, or trade it in for a new one. PCP agreements often come with mileage limits, which can be a drawback for Uber drivers.


Leasing is essentially a long-term rental agreement. You pay a fixed monthly fee to use the car for a set period, after which you return the car. Leasing agreements usually have strict mileage limits and may not be the best option for Uber drivers due to the high mileage associated with ridesharing.

Benefits of using a financed car for Uber

Using a financed car for Uber has several advantages:

Lower upfront costs

Financing a car allows you to spread the cost over time, making it more affordable to get started as an Uber driver. This is particularly beneficial for those who do not have the capital to purchase a car outright.

Newer vehicles

Financing options often make it possible to drive a newer, more reliable vehicle. Newer cars are less likely to break down and typically offer better fuel efficiency, which can lead to cost savings in the long run.


Some financing options, such as subscription services, offer the flexibility to change vehicles or terminate the agreement with minimal notice. This can be advantageous if you decide that driving for Uber is not for you or if your circumstances change.

Tax benefits

As an Uber driver, you can claim certain expenses related to your vehicle, such as interest on your car loan, depreciation, and running costs, as tax deductions. This can help reduce your overall tax liability.

Drawbacks of using a financed car for Uber

While there are benefits to using a financed car for Uber, there are also some potential drawbacks to consider:

Mileage limits

Many financing agreements, particularly PCP and leasing, come with mileage limits. Exceeding these limits can result in additional charges, which can quickly add up given the high mileage associated with Uber driving.

Wear and tear

Driving for Uber can lead to significant wear and tear on your vehicle. This can affect the car’s resale value and may result in additional charges at the end of a leasing or PCP agreement.

Insurance costs

Insuring a financed car for commercial use can be more expensive than standard car insurance. It is essential to ensure that your insurance policy covers ridesharing activities, as failing to do so could invalidate your coverage.

Contractual restrictions

Some finance agreements may have clauses that prohibit the use of the vehicle for commercial purposes. It is crucial to read the terms and conditions of your finance agreement carefully to ensure that you are not in breach of contract.

Legal and practical considerations

When using a financed car for Uber, there are several legal and practical considerations to keep in mind:

  • Insurance: As an Uber driver in the UK, you are required to have private hire taxi insurance, also known as hire and reward (H&R) insurance. This type of insurance provides cover for transporting passengers in exchange for money and includes public liability cover. It is different from standard car insurance and is essential for legal compliance.
  • Vehicle Requirements: Uber has specific vehicle requirements that must be met. Generally, your car should be a 4-door vehicle that is no more than 10-15 years old. It must also be in good condition with no cosmetic damage. Additionally, the vehicle must have passed all necessary safety and emissions tests.
  • Finance Agreement Terms: It is essential to review your finance agreement to ensure that it allows for commercial use. Some agreements may explicitly prohibit using the vehicle for ridesharing or other commercial activities. Breaching these terms could result in the repossession of the vehicle and financial penalties.
  • Mileage and Maintenance: High mileage and increased wear and tear are common when driving for Uber. It is important to factor in these additional costs when considering a financed car. Regular maintenance is crucial to keep the vehicle in good condition and to avoid costly repairs.
  • Early Repayment: If you find that driving for Uber is not as profitable as expected, you may want to pay off your car finance loan early. Most lenders allow for early repayment, but it is important to check for any potential penalties or fees associated with this.

Final notes

It is possible to use a financed car for Uber, but there are several factors to consider. The type of financing, the terms of the finance agreement, and the additional costs associated with high mileage and commercial use are all important considerations.

While financing can provide a more affordable way to access a suitable vehicle, it is essential to carefully review the terms and conditions of your finance agreement and ensure that you have the appropriate insurance coverage.

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