What is annual mileage?

Annual mileage is the limit of miles you have agreed to stick to on a PCP and PCH (leasing) finance deal, for example 10,000 miles a year. This is because the car’s estimated mileage at the end of the contract determines how much it’s likely to be worth. So, if you take out a three-year deal, your paperwork might say you can cover 30,000 miles in that time and give you a maximum total mileage that you’ve agreed not to exceed. 

It’s worth noting that the total mileage for the whole duration of the contract is more important than the annual mileage, but the annual mileage figure is easier to understand. So don’t worry if you cover 11,000 miles in your first year on a 10,000-mile-a-year deal – just try to keep to 9,000 miles the following year. 

You should try to work out as best as possible how many miles you might travel over the course of a year. If you drive to work, work out the distance you’ll drive over the course of a working year. And will you have long trips for holidays or to visit extended family? All of your typical journeys need to be factored in before you agree to a certain mileage limit.