We’ll cover:
- What is a high-mileage lease?
- Who are high mileage leases most suitable for?
- Are there any downsides to high mileage leases?
- How do you negotiate a high mileage lease?
- How does a high mileage lease impact your credit score?
- Alternatives to high mileage leases
- Before you sign a car lease…
What is a high mileage lease?
The typical annual mileage limit on car leases is around 12,000 miles a year. For many drivers, this is ample, averaging around 250 miles per week.
If you’re a regular driver covering significant distances that exceed these limits, standard leases can get costly. That’s because you’ll pay 10 to 25 cents for every additional mile you drive. For a regular lease with a 12,000-mile limit, if you drive 17,000 miles/year, you’ll pay excess fees for 5,000 miles each year. If those fees are 20 cents a mile, it costs you an extra $1,000/year on top of your regular monthly lease payments.
Some leasing companies offer high mileage leases, where you pay an additional monthly charge but can avoid the high additional fees for excess mileage. If you can negotiate a high enough limit that you never exceed it, the advantages will more than offset the higher monthly fee you pay.
It may even be possible to negotiate a pay-as-you-go deal for your miles or a high-mileage deal that includes a promise to refund money for extra miles if they’re unused.
What’s the highest mileage on a lease?
This varies from dealer to dealer but high mileage car leases that include 30,000 miles (2,500 miles per month) or even more may be possible. The main question when committing to such a high annual mileage lease is: would it be more cost effective to buy the car?
Who are high mileage leases most suitable for?
Leasing a car online can be an effective and affordable way to drive the car you want — but only if you do your homework and avoid the common leasing mistakes. One of the most common mistakes is failing to accurately estimate mileage.
A high mileage lease is most suitable for regular drivers who:
- Drive over 10,000 to 12,000 miles per year
- Want to drive a new car every few years
- Have a good handle on what their annual mileage is
Main benefits of high mileage leases
High mileage leases allow you to drive a car you want as regularly as you like without worrying about excess fees — and for a lower cost per mile. These types of leases are also best for drivers who like to know exactly what their monthly costs are and want no surprises with excess fees.
Are there any downsides to high mileage leases?
The main downside of a high mileage lease is the higher monthly costs.
The car’s depreciation is the main consideration when leasing companies price deals. The higher the mileage, the greater the depreciation. So, effectively, extra miles decrease the vehicle’s lease-end residual value as the car's perceived value has gone down.
To account for this, leasing companies raise the monthly fees, which can make the monthly outlay unmanageable for some drivers. For instance, if you drive 50,000 miles per year, the extra depreciation would be factored in over the three years of the deal (150,000 miles total) and you may be better off buying the car outright.
Drivers who don’t have a good grasp of their annual mileage can also end up paying more than necessary with a high mileage lease. If you pay for 30,000 miles per year but only cover 15,000, you’ll be paying unnecessary extra fees every month.
It’s important to understand your usage, do the math and then negotiate a deal that suits your budget and lifestyle.
How do you negotiate a high mileage lease?
Before you negotiate any car lease, the golden rule is to know your mileage. The odometer is your friend and can tell you the information you need. Take an average month and note the mileage. Multiply that by 12 and you have a rough estimate of your annual mileage.
If your expected usage exceeds the standard mileage limits offered by your lease provider, ask about a higher mileage lease. Even if your leasing company doesn’t advertise or promote high mileage leases, they likely want your business. So, depending on your location and the make and model of the car you want, they may be prepared to negotiate the mileage limit rather than you walking down the road or clicking through to a competitor.
Follow a few of our smart tips for negotiating a car lease and you can very quickly have the car you want — at a rate you can afford. Just to reiterate, the key factors to consider are:
- How many miles you intend to drive
- The total costs of the lease
- Is purchasing the vehicle a better option?
Evaluate the numbers provided by the dealer and check how the estimated monthly payments for a high mileage lease compare with the costs of a standard car lease. Again, do the math, make the calculations and see whether it fits into your budget.
Does a high mileage lease impact your credit score?
To lease a car, you need a healthy credit score. Making regular monthly payments for a high mileage lease car can help build your credit and may increase your credit score.
Alternatives to high mileage leases
A high mileage car lease is not right for every driver. Other options are discussed here and include:
Buying the car
If you are a frequent driver who doesn’t mind driving the same car for many years or regularly selling and buying a new car, purchasing may be preferable to leasing.
With buying, you don’t have to worry about mileage limits but still need to pass stringent credit checks and arrange finance. And, remember, when calculating the cost of owning a car, you must include not only the sticker price but maintenance, repairs and running costs.
Buy out your lease
If you negotiate the option to buy your car at the end of your lease, you won’t need to worry about extra mileage — but you will end up with the same car that you’ve been driving for the past few years.
A car subscription
Car subscriptions are a more flexible alternative to leasing. You don’t have to worry about the hassles of negotiating mileage. With a FINN car subscription, you can change the car you drive after months (rather than years) and enjoy high mileage limits per month.
FINN's fast, reliable, and convenient service also takes care of insurance, registration, roadside assistance, etc.
Final thoughts
Before you sign on the dotted line, make sure you ask the right questions to your car leasing company.
Understand what you’re paying for, how many miles are covered, what the extra costs are if you exceed the mileage, and whether a high mileage lease would be better for your needs.
Ultimately, you need to decide if the lease fits your budget and lifestyle. Know your annual mileage and how often you want to change your car. If you love driving new cars but are afraid that leasing won’t work because of the excess mileage limits, consider a car subscription with FINN for greater flexibility and less hassle.
