Excess Mileage Charges Explained
If you’re looking to lease a car, chances are you’ve heard of excess mileage charges. When you choose a lease deal, you also choose your annual mileage. This affects how much it will cost you each month to lease your car.
When you lease a car, you are essentially borrowing that car from the finance company for a period of time. The finance company has to factor in how many miles you expect to cover in that car so they can calculate the car’s resale value once the term of your lease has finished.
All cars depreciate in value as they get older and those with high mileage depreciate faster, hence why a high mileage lease will cost you more money.
If you return the lease car at the end of the contract having covered more miles than are stated in your lease contract, you’ll incur excess mileage charges.
How are excess mileage charges calculated?
Excess mileage charges are calculated on a pence-per-mile basis. This amount can change but will be clearly stated on your contract with us so make sure to check.
For example, if your excess mileage charge is 7p per mile you’ll be charged 7p for every extra mile you cover outside your agreed mileage over the term of your lease deal.
So, if you exceed your agreed mileage by 1,000 miles you’ll be charged an extra £70 at the end of your contract.
How do I choose the right mileage for my lease?
A quick way of estimating how much mileage you should choose for your lease is to have a look at your last few MOT certificates and see how many miles you’ve covered between them. You’ll soon be able to settle on a figure.
You can check your MOT history online by visiting https://www.check-mot.service.gov.uk/
Another quick way is to work out how many miles you drive in a month and multiply that figure by 12 to get an estimate of your annual mileage.
It’s also important to think about whether your driving habits are likely to change over the course of your lease contract. It’s impossible to factor in unknown events, but consider things like whether your commute to work could change.
It’s probably a good idea to slightly overestimate how many miles you cover in a year in order to avoid excess mileage charges at the end of your contract.
Can I increase the mileage on my lease?
Increasing your mileage is at the discretion of the finance company. If you need to increase your mileage you should speak with one of our advisors.
If you do find that you’re close to exceeding your mileage limit and you’re worried about excess mileage charges, don’t be.
Excess mileage charges aren’t always costly, especially if you’ve calculated your annual mileage and given yourself a buffer just in case your circumstances change.
We have a huge range of lease deals available to suit all drivers and budgets and we’re confident that you’ll find the right deal for you.
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