Excess Mileage Charges Explained: What To Know

Leasing a car can be great fun, but as you’re cruising down the motorway in a brand-new model, enjoying the latest technology and access to a fresh and powerful engine under your foot, the creeping thought of whether you’ve hit your mileage limit could leave you with a dash of anxiety.

There’s a host of drivers who need high mileage limits out there. Long-distance commuters who need to travel on the motorway to work certainly do – a daily round-trip commute of 40 miles can add up to 10,000 miles per year just in commuting. Within the realm of work, there’s also business travellers and field workers who roam a particular region to inspect sites, for example (though business travellers may want to consult our business lease deals rather than personal). Finally, there’s simply frequent travellers who wish to traverse the country in long strides on the weekend.

Whatever your reason for racking up the miles, understanding how excess mileage works in a lease deal can save you a nasty shock when it’s time to hand the keys back. In this blog, we aim to make you aware of how car leasing excess mileage charges work so you avoid the surprises.

Why Are Leases Structured Around Mileage?

The reason for mileage being an integral part of lease deals is economic. When you lease a car, the car’s value depreciates while you’re using it, so the price of a lease is the leaser’s calculation of the value depreciation over the term. However, another factor in a car’s value is the number of miles it has put on the road, so leasers want to protect the car’s residual value. Thus, mileage caps are baked into every lease agreement you can find, as it makes it fair for both parties.

What are Excess Mileage Charges?

Excess mileage charges are the fees you pay if you drive over the mileage allowance in your lease contract. The mileage is typically measured over the whole lease term rather than each year individually, which does give you some wiggle room if you have a particularly driving-heavy year. Agreed upon before the lease is signed, charges are based on a set amount for every mile over the allowance. This commonly ranges from 3p to 30p per mile, which means that should you exceed the mileage allowance by 1000 miles at a rate of 30p, you will be liable for £300.

When Do You Pay the Charges?

Excess mileage on a lease car is checked when you return the car, so any miles above the total contract allowance will incur the charge at that point. This means you can feasibly overshoot your yearly allowance if you drive under the allowance the following year – the total mileage at lease-end is the important figure. The excess mileage fee will be added in one lump sum to your final bill.

So, What Mileage Package Should You Choose?

According to the government MOT data, the most common annual mileage bracket for UK car owners is 3,000-4,000 miles, meaning if your driving habits are par for the course, this is the sort of mileage limit you’ll want to be looking for. UK leasing companies typically let you choose from a range of annual mileage allowances. Many deals start as low as 5,000 miles per year and can rise up to 15,000 or 20,000.

At cars2buy, you can filter out any leases that exceed a set maximum mileage limit, so you can find the perfect deal for you amongst the UK’s most competitive range of offers.

Tips for Reducing or Avoiding Excess Mileage Charges

The last thing you want is a nasty surprise charge at the end of your lease. Here are some tips for avoiding and preparing properly:

• Estimate your mileage beforehand
• Monitor your mileage as you go
• Plan for long trips
• Adjust your driving habits if you find yourself cutting close to the bone
• Contact your leasing company if you’re likely to overshoot your miles. They may be able to allow for mid-lease adjustments. Find more information on our guide to changing your lease contract.
• Consider end-of-lease options if you’ve massively exceeded your mileage. One option can be to buy the car outright at the end of the agreement, to which you won’t face a charge because you won’t be returning it.

Choose the Right Lease Deal with cars2buy

Avoiding a lease car excess mileage charge comes down to smart planning and open communication, and with cars2buy, we help you have both. We are the UK’s number-one destination for finding new car leases, allowing you to browse the very best personal car leases from hundreds of trusted dealerships across the UK. We’ve done the hard work for you, so you can compare all the latest leases all in one transparent service that lets you get the full scope of what’s out there. Get your hands on the perfect new lease car for you without the hassle with cars2buy today.