The Guide to Car Lease Mileage Limits
Mileage limits are one of the most important factors in a car lease. They influence your monthly payments, the overall cost of leasing, and whether you’ll face extra charges at the end of your contract. Understanding how mileage works helps you avoid expensive surprises.
Car leasing is a great choice for many, offering low monthly payments, flexibility in choosing your lease, and no worries about vehicle depreciation. Whether you're a business or personal customer, leasing can be a smart option. However, there are a few important decisions to make when leasing, and a big one is the mileage agreement. When leasing, you must select the annual mileage you expect to drive with the vehicle.
You choose your mileage limit based on how many miles you expect to drive annually during your lease agreement. Typically, mileage ranges from 5,000 to 30,000 miles per year. Your mileage limit affects your lease cost. Higher limits mean more wear and tear, faster depreciation, and therefore higher monthly payments.
It’s essential to choose the correct mileage limit when leasing a vehicle. If you exceed this limit, you will incur a charge per mile for every mile over your allocated mileage at the end of your lease agreement. The rate varies by vehicle, so be sure to verify the specific charge for your vehicle.
How to Pick the Correct Mileage
Look at your previous driving habits to estimate your mileage accurately. Check your MOT documents to see how many miles your last vehicle did a year. Consider how many miles you’ll drive with your current car for work and account for any additional mileage you may need. It's important to factor in all of this to determine the best mileage limit for your lease.
Mileage Options
Most lease agreements start with a mileage allowance of around 5,000 miles per year and can go up to 30,000 miles. However, this can vary, and if you need more or fewer miles, it’s always worth having a conversation at the quoting stage to tailor the agreement to your requirements.
It’s also important to consider how long you’ll have the vehicle. For example, if your lease runs for three years, the mileage allowance applies across the full term. You might drive more miles one year and fewer the next, but as long as the total mileage falls within your agreed limit when you return the vehicle, you typically won’t face additional costs.
How Mileage Effects Your Monthly Payments
Mileage is one of the key factors that affects the cost of a lease agreement. In most cases, the higher the mileage allowance you select, the higher the monthly rental will be. This is because the more miles a vehicle has, the less it is worth when it is returned, and your monthly payments are essentially covering that depreciation in value. The additional mileage you add to the agreement directly increases the expected wear and tear, which is why higher mileage options tend to cost more. On the positive side, a higher mileage limit means you are getting more use out of the vehicle without worrying about excess charges.
However, mileage isn’t the only factor influencing cost. The length of the contract also plays a significant role in determining the monthly payment. For example, shorter contracts generally have higher monthly rentals because the leasing company needs to recover the vehicle’s value over a shorter period. Longer contracts can spread the cost more evenly, resulting in lower monthly payments, though you will be committed to the vehicle for a greater length of time.
When deciding on mileage and contract length, it’s important to realistically assess how much you expect to drive each year and how long you want to keep the vehicle. Setting these correctly at the start will help you avoid unexpected charges at the end of the lease and ensure that your monthly costs remain manageable.
How Excess Mileage is Calculated
The charge for exceeding your mileage limit is calculated at a pence-per-mile rate based on the following factors: Each finance provider varies in their cost per mile for the vehicle, and the charge typically ranges from 5p to upwards of 30p, depending on the make and model. Therefore, it’s always worth ensuring you have enough mileage covered in your agreement, otherwise you could be paying a bill at the end of your lease.
What Happens If I Need to Change My Mileage?
If your circumstances change and you anticipate going over or under your mileage halfway through your lease, you can potentially adjust your mileage agreement. Keep in mind that this will affect your monthly payments, and they may not remain the same after making the change. This can depend on your finance provider, so it is always worth talking with them.
Frequently Asked Questions
Yes, mileage does matter. It impacts the cost of your monthly payments; generally, the higher the mileage allowance, the higher the monthly payments. Exceeding your mileage limit can result in additional charges, typically calculated at a cost per mile for the vehicle.
The lowest mileage range most leasing companies offer tends to be 5,000 miles per annum.
If you exceed your mileage limit, you will incur a fee when returning the vehicle. This fee is based on the pence-per-mile charge outlined in your finance agreement, which you should be aware of when signing.
Yes, you can increase your mileage allowance during the lease agreement, provided that the terms allow for it. It’s best to check with your finance provider to understand the process and any potential changes to your monthly payments.
The excessive mileage charge is incurred when you exceed the agreed mileage limit for your leased vehicle over the duration of the lease. This charge is typically calculated at a rate of pence per mile and varies depending on the vehicle make and model, as well as the finance provider.