How to Avoid Paying a Mileage Overage When Leasing Cars

by Leonardo R. Grabkowski

Leasing a car is more complicated than purchasing one; residual values, mileage fees, terms---all of these factors must be considered. One of the most important things to consider is your lease mileage plan. The end-of-lease value is estimated, in part, by the end-of-lease mileage. A higher-mileage vehicle is worth less than a lower-mileage vehicle. This affects the leasing company when they sell the leased vehicle; it's the reason mileage overage fees are charged. Avoiding mileage overage fees starts at the beginning by selecting a proper mileage plan for your driving habits.

Choose a mileage plan that suits your needs. Analyze your driving habits from the past few years to determine the best plan. Always slightly over-budget your mileage. If you drive 10,000 miles per year on average, choose a mileage plan that allows 12,000 or 15,000 miles.

Monitor your monthly mileage. If your plan allows 12,000 miles per year, try not to go over 1,000 miles per month. If you do, reduce your mileage the following months to compensate for the overage.

Rent a car when traveling out of town, unless you are far under your mileage limit. It's less expensive to rent a car than to pay the over-the-limit mileage fees at lease end.

If you exceed your lease mileage limit, negotiate with your auto leasing company. The chances for complete forgiveness are rare, however, the company might be able to reduce the charges for you.

Tip

  • check If you cannot afford an over-the-limit fee, your best option may be selling the vehicle at lease end. If you sell the vehicle and pay off the lease-end residual, the leasing company will not care how many miles are on the vehicle. You can also consider purchasing the vehicle, however, the purchase price must equal the lease-end residual price. In addition, many leasing companies charge a small fee ($400 to $500).

About the Author

Leonardo R. Grabkowski has been writing professionally for more than four years. Grabkowski attended college in Oregon. He builds websites on the side and has a slight obsession with Drupal, Joomla and Wordpress.