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What You Must Know About Excess Mileage Charges
By: Roosevelt Gist
Excess mileage is the number of miles driven annually above the miles allowed
by your lessor. Your annual allotted mileage will vary from lessor to lessor
and stated on your lease.
The average is 15,000 miles per year. Some lessors will vary the
mileage by make (Ford, Toyota, etc.) of car and/or Manufacturers Suggested
Retail Price (MSRP). In the majority of leases you are only charged at the
end of lease term. However, your lease may be different. Read it carefully.
The cents per mile over the allowed mileage will also vary by lessor. The
average is $.15 per mile. It will be stated on your lease.
This An Example Only: How does excess mileage
work?
| MILEAGE ALLOTMENT |
LENGTH OF LEASE |
MAXIMUM MILES AVAILABLE |
| 15,000 PER YEAR |
2 YEARS |
30,000 MILES LEASE TERM |
| ACTUAL MILES USED (-) |
ALLOTMENT (=) |
EXCESS MILEAGE |
| 35,000 MILES (-) |
30,000 MILES (=) |
5,000 MILES |
| EXCESS MILEAGE (x) |
PENALTY PER EXCESS MILE (=) |
TOTAL CHARGE FOR EXCESS MILEAGE |
| 5,000 MILES (x) |
$ .15 PER MILE (=) |
$750.00 |
If you are allowed 15,000 miles per year and your lease term is
two years then you can safely drive 30,000 miles (15,000 x 2 years = 30,000)
with no excess mileage charge. But, if you drive 35,000 miles in two years
then your excess mileage charge is 5,000 (35,000 - 30,000 = 5,0000 x $ .15
(if this is your lessors charge) = $750.00 (what you will owe in excess mileage
charges). If you know you will drive more than the annual mileage allowed,
have your lessor adjust the allowance before you sign the lease. They will
do that but your monthly payment will increase because the dollar amount
will be added to the total of lease payments. Some lessors will charge annual
excess mileage charges if you early terminate. This combination of charges
can easily get very expensive. Negotiate excess mileage charges for early
termination out of your lease. This will be taken into consideration when
your car is appraised for its current value. If your lessor will not waive
early termination excess mileage charges then find another lessor.
| NOTE: Excess mileage
charges should apply at the end of lease term only if you return the vehicle.
You should not have to worry about driving more than the annual allowed miles.
Some years you may drive more some less, have peace of mind and enjoy your
lease car by considering only the total miles for the lease term. |
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