The consequences of going over your mileage allowance
Leasing a car can be a great option for those who don't want the commitment of owning a vehicle and prefer the flexibility of changing cars every few years. One of the main advantages of leasing is that you can drive a new or almost new car without having to pay the full price for it. However, one of the most important aspects to consider when leasing a car is your mileage allowance.
Most leasing contracts come with a set mileage allowance, which is the maximum number of miles you can drive during the term of the lease. If you go over this limit, you'll be charged an excess mileage fee, which can be significantly higher than the cost per mile included in your lease agreement.
So, what are the consequences of going over your mileage allowance? In this article, we'll take a closer look at the impact on your finances, the wear and tear on your car, and the potential penalties you may face.
Finances
The most obvious consequence of going over your mileage allowance is the financial impact. Excess mileage fees can range from 10 cents per mile to as much as 50 cents per mile, depending on the leasing company and the type of car you're driving. If you drive 10,000 miles over your allowance, you could be facing a bill of $1,000 to $5,000 at the end of your lease.
In addition to the excess mileage fees, going over your mileage allowance can also affect the resale value of your car. The more miles you put on the car, the lower its value will be when you return it to the leasing company. This can result in a lower trade-in value if you decide to lease another car in the future.
Wear and tear
The more you drive your car, the more wear and tear it will experience. This can lead to higher maintenance and repair costs down the road. If you go over your mileage allowance, you may need to replace your tires, brakes, or other parts of your car sooner than you would have otherwise. You may also need to spend more on oil changes and other routine maintenance to keep your car running smoothly.
Penalties
In addition to the financial impact and the wear and tear on your car, going over your mileage allowance can also result in penalties. Lease agreements typically include provisions for excess mileage, and you may be subject to penalties if you violate those provisions. Depending on your lease agreement, you may be required to pay a penalty fee, return the car early, or even face legal action if you refuse to pay the excess mileage charges.
What can you do to avoid going over your mileage allowance?
The best way to avoid going over your mileage allowance is to plan ahead and accurately estimate your driving needs before you sign your lease agreement. Most leasing companies offer different mileage options, so choose the one that best fits your needs and budget. If you think you may exceed your mileage allowance, consider paying for extra miles upfront. The cost per mile is typically lower if you purchase additional miles at the start of your lease.
Another option is to carpool or use public transportation more often. This can help reduce your mileage and save you money on gas and other expenses. You can also consider leasing a car with a higher mileage allowance if you know you'll be driving more than average.
Conclusion
Going over your mileage allowance can have serious financial, practical, and legal consequences. It's important to accurately estimate your driving needs when you lease a car and choose the mileage option that works best for you. If you do go over your allowance, be prepared to pay the excess mileage fees and other penalties that may apply. By taking these steps, you can enjoy all the benefits of leasing a car without the stress of exceeding your mileage limit.