I’m in a four year lease and am wondering what happens in three years or so and it looks like like I may go over my allotted 40,000 miles.
Will I be charged in one lump sum when I turn in the vehicle? When it appears that I may go over miles does it make sense to turn in the car and lease a new one?
Benching the car until the lease runs out is not an option.
I guess I want to be able to drive this thing now and not have to worry about how many miles I’m putting on it.
It should all be in your lease agreement. Do you have a copy of it available? I don’t believe you can just turn the car in now without paying off the lease in full. They want to get the full cost of your lease.
But everything is negotiable if you are willing to lease or buy another car.
As Telemark said, this is covered in your lease agreement and we haven’t read it. But typically, you would be charged a per mile fee (perhaps 15 cents per mile) for each mile you go over your allotment. Trading the car in or otherwise terminating your lease early is unlikely to be cheaper than paying the mileage penalty at the end of the lease. I know one person who had to do an early lease termination and had been accruing miles faster than the lease expected. The person paid both an early termination fee and a mileage penalty that was purportedly based on the pro-rata number of miles that would have been expected over the first 36 months of the 48 month lease (or whatever the real months were).
I’ve leased two cars, and both times the salesman mentioned several times that if I looked like going over the mileage allowance, to contact them to work out a deal. You probably won’t get extra miles for free, but my sense was that they would rather charge you less than the stated rate per mile, or adjust your monthly payments now, rather than have you pissed off by a big lump payment at the end.
The whole point of leases, from the dealer (and manufacturer network) POV, is that they sell the first couple of years/minimal mileage to one person for a fairly high premium, then turn around and sell the nearly-new, low-miles car to someone else. It’s almost like they get to sell the same car twice.
One of the strongest components of most leases is the mileage limit, the over-mileage charge and how strictly that’s all enforced - go over, you will pay (usually at turn-in). If your rate is more than maybe 10 cents a mile, it can add up to a whopping amount and help bind you into another lease as your only financially accessible option.
The dealers/resale chain does NOT want high-mileage cars back, and if you run up the miles, you are essentially paying them for the reduced profit on the resale.
Another way to avoid the mileage penalties is to buy the car at the end of the lease. If you’re going to go way over (like tens of thousands of miles) it might conceivably cost less to buy the car and immediately turn around and sell it instead of paying the penalties.
Of course from a strictly financial perspective, the best option would be to buy the car at the end of the lease and continue driving it for many years instead of leasing another one, but I suppose that’s stating the obvious.
What everyone else said, plus this for emphasis. If you are over the limit at the end of the lease and are ready to lease another car from them, dealers are very willing to negotiate. It’s worth talking to them now about your options.
Leasing perhaps wasn’t the best idea. This car is going to be babied and I suspect that I may want to buy it. I’d even lease again with more miles allowed and I really like the dealer.
So I have options if I go over miles. I can now relax and enjoy driving.
Don’t relax until you read your lease agreement and talk to the dealer. You shouldn’t go blindly forward, you could be in for a nasty surprise and then you’ll have little leverage.
It also really depends on what kind of car it is. If you’re leasing something like a Honda or Toyota, you’re going to have a lot more room for negotiation because they hold their value well and so mileage (within reason) doesn’t have a huge effect on their value as used cars. The dealers are going to be more amenable to negotiation, and plus the numbers will work out better if you do go the “buy it and sell it” route. The sorts of luxury cars brands like BMW, Mercedes, etc. people love to lease tend to depreciate really quickly, though, so you’re probably going to pretty screwed trying to hand one of those in with lots of excess mileage.
