What Happens If I Exceed My Lease Mileage?

Lease Car Mileage, all you need to Know.

Have you ever find yourself going over your mileage allowance? If so, you may have been subject to excess mileage charges. These charges are usually calculated at a pence per mile rate, so the more you go over your allowance, the more it will cost you.

If you’re looking to avoid these charges, be sure to stay within your mileage limit or invest in a Mileage Blocker (Mileage blockers are only to be used for off road purposes or within certain test conditions.

Why is there a mileage limit on lease cars?

If you’re thinking of leasing a car, you may be wondering why there’s a mileage limit. The yearly mileage limit helps the finance provider calculate the car’s residual value.

Your monthly rentals are largely determined by the difference between the car’s purchase price and the estimated final sale price. If you go over your pre-agreed annual mileage, the car’s value at the end of the lease contract is likely to be less than anticipated. This is because the more miles a car has on its clock, the more its value depreciates. As such, excess mileage charges are put into place to help protect the finance provider from financial loss if you return the car with a greater mileage amount than pre-agreed.

You can read more about residual value, how it is calculated, and why is it important in our handy Depreciation and Residual Value guide.

Exceeding car insurance mileage limit

How Are Excess Mileage Charges Calculated?

Your finance provider sets your excess mileage charges and it’s important to know how this is calculated. Here are the key factors:

The make and model of the vehicle lease hire
Your total pre-agreed mileage
The finance provider funding the vehicle
Whether vehicle maintenance is included
The total mileage amount on the vehicle at the end of the contract
Some finance providers have tiered excess mileage rates. This means that you’ll be charged one rate for any miles up to a set point, and another rate for anything beyond that.

Keep these factors in mind when you’re deciding whether to lease or buy a car.

As excess mileage charges vary, it is important that you check the excess mileage charges before you sign your car finance deal. You will be advised of your excess mileage charge upfront, and this will show on your contract.

How Much Mileage Should I Choose For My Lease?

Why Excess Mileage Charges Matter When You’re Leasing a Car

When you’re leasing a car, one of the things you’ll have to decide is how many miles you’re going to drive each year. This is because if you exceed your chosen mileage, you will be liable to pay excess mileage charges.

Your choice of mileage allowance is entirely down to you. If you’re not sure how many miles you’re going to drive, you can take a measurement based on how many miles you do in an average month and multiply it by 12. It is best to average this over a year because you may drive more during the winter months when the weather is bad but less during summer months when you typically take holidays abroad, so keep these in mind to make your estimation as accurate as possible.

Can I Lease A Car With Unlimited Mileage?

No, it is not possible to lease a car with unlimited mileage. This is because the mileage and other factors are used to determine your monthly rental cost.

If you are looking for a vehicle with unlimited mileage, other options may be available to you. You may want to consider purchasing a car outright via a bank loan or dealer finance. Or you could consider a Hire Purchase style agreement.

How To Avoid End-Of-Lease Excess Mileage Charges?

There are multiple ways to avoid additional charges to from a lease company, first of all is to stay within your allocated mileage, second is to fit a Mileage Blocker to avoid the clocking up of any unnecessary mileage being added to your vehicle.