Car leases come with a lot of stipulations for how you use the vehicle, including how many miles you can drive. Exceeding that number can rack up extra charges and leave you with an unexpected bill.
Your car leasing company can charge you a per-mile fee for every extra mile you drive that's over and above what your original contract allows. For example, suppose you have a three-year car lease that limits you to 15,000 miles, and you bring the car back at the end of the least term with 16,000 miles on the odometer. You'll be charged for each of those additional 1,000 miles. According to Edmunds, charges range from 15 cents to 30 cents per mile, depending on the car leasing company and the type of vehicle you’re driving.
Why They Do It
The more miles on a car, the lower its residual value. When you're turning in a leased vehicle, the car company is most likely going to resell it as a pre-owned vehicle. The lower the miles, the more the company can charge. Looking at it this way, the fees charged for exceeding mileage aren’t necessarily a penalty. It’s more about you paying for your contribution to the depreciation of the vehicle through use that exceeds the terms of your contract.
Car leasing companies have another fee category when it comes to returned leased vehicles, called “wear and tear.” This is a subjective fee category because opinions may vary on what constitutes “normal” wear and tear on a vehicle. Read the fine print in your lease agreement. The car company may charge you for what it considers excessive nicks, dings, scuff marks or other damage incurred during the life of your lease.
If you planned to walk away from a leased vehicle and find you have a hefty tab at the end of your agreement, you have a few options. You can buy the vehicle, either through a cash payment, private loan or dealer-financing, in which case you don't owe any other fees related to wear and tear or mileage overage. Another option is to pay your fees and be done, or to roll those fees into a new vehicle purchase or another lease. The latter move can get a little sketchy, as you’re essentially financing old fees from a car you no longer drive on a new car loan. Avoid this move, if possible.
- Polka Dot Images/Polka Dot/Getty Images
- How to Buy a New Car or Used Car
- How do I Save Money When Buying a New Car?
- How to Purchase an Affordable Car
- Car Rollover Lease & Turn In Options
- What Available Balance Do You Need on Your Credit Card to Rent a Car?
- How to Lease a Pre-Owned Car
- Advantages & Disadvantages of Leasing or Financing a Car
- How to Find a New Car for Cheap