Understanding the difference between a standard and a flexible mileage allowance
Leasing a car is an excellent way to enjoy all the benefits of having your own car without the headaches that come with owning it. However, leasing a car also comes with some restrictions, such as a mileage allowance. Your mileage allowance is the number of miles you can drive your leased car per year before you incur a penalty. If you're not careful, you can easily exceed this allowance, which can cost you a lot of money. That's why it's crucial to understand the difference between a standard and a flexible mileage allowance.
What is a Mileage Allowance?
A mileage allowance is a limit on the number of miles you can drive your leased car without incurring additional charges. It's a way for a leasing company to ensure that the car remains in good condition and retains its value. If you go over the mileage allowance, you will have to pay a certain fee for every mile over that limit. The fee is usually between 10 and 30 cents per mile, depending on the leasing company.
What is a Standard Mileage Allowance?
A standard mileage allowance is the number of miles that a leasing company allows you to drive your leased car per year. This limit is usually set at 12,000 miles per year, but it can vary depending on the leasing company. If you exceed the standard mileage allowance, you will have to pay a fee for every mile over that limit. The fee can be significant, especially if you go over by a considerable margin.
What is a Flexible Mileage Allowance?
A flexible mileage allowance, also known as a high-mileage lease, is an agreement that allows you to drive more miles than the standard mileage allowance. This option is ideal for people who drive more than the average person or have long commutes. A flexible mileage allowance can be as high as 15,000, 18,000, or even 20,000 miles per year, depending on the leasing company. However, you will have to pay a higher monthly payment for a flexible mileage allowance than you would for a standard mileage allowance.
Pros and Cons of Standard Mileage Allowance
One of the advantages of a standard mileage allowance is that it's usually more affordable than a flexible mileage allowance. If you're someone who doesn't drive much or only uses the car for short trips, a standard mileage allowance might be a better option for you. However, if you do a lot of driving, a standard mileage allowance can be very restrictive. You might have to limit your driving to avoid incurring extra fees, which can be inconvenient.
Pros and Cons of Flexible Mileage Allowance
One of the advantages of a flexible mileage allowance is that it allows you to drive more miles than the standard mileage allowance. This option is ideal for people who use their car for work or travel long distances. With a flexible mileage allowance, you won't have to worry about exceeding your mileage limit and incurring extra fees. However, a flexible mileage allowance can be more expensive than a standard mileage allowance. You will have to pay a higher monthly payment for the privilege of having a flexible mileage allowance.
Tips to Manage Your Mileage Allowance
Regardless of whether you opt for a standard or flexible mileage allowance, it's crucial to manage your mileage carefully. Here are some tips to help you avoid incurring extra fees for going over your mileage allowance:
1. Plan your trips carefully and try to avoid unnecessary driving.
2. Carpool or use public transportation if possible.
3. Take advantage of online shopping and home delivery services to avoid driving to the store.
4. Consider using a rental car for longer trips instead of your leased car.
5. If you're close to exceeding your mileage allowance, consider buying extra miles in advance. This can be a much cheaper option than paying the extra fees for going over your mileage allowance.
Conclusion
Leasing a car can be an excellent option for people who don't want the hassle of owning a car. However, it's crucial to understand the difference between a standard and a flexible mileage allowance to avoid incurring extra fees. A standard mileage allowance is more affordable, but it can be restrictive for people who do a lot of driving. On the other hand, a flexible mileage allowance allows you to drive more miles, but it can be more expensive. Regardless of which option you choose, it's essential to manage your mileage carefully to avoid incurring extra fees.