Over Mileage Car Lease – Options

Over Miles on Car Lease – What to Do

If you are exceeding the mileage allowance on your car lease, you have options

Many people who lease cars, find themselves exceeding their mileage limit — or maybe don’t discover it until lease-end when they return the car to the lease company. There are a number of options that can be taken if this situation occurs.

First, let’s understand why leases have mileage limitations.

Cars depreciate in value as they are driven and get older. The more miles that are driven, the more a vehicle loses in value to depreciation.

Lease payments are based on expected value at lease-end (see Lease Payment Formula). A car that is expected to be driven 36,000 miles during a 36 month lease will have a higher lease-end value, and a lower lease payment, than the same car that is expected to be driven 45,000 miles.

Lease mileage allowances are expressed as annual miles, such as 12,000 miles per year, which equates to 1000 miles per month, or 36,000 miles total for a 36 month (3 year) lease. It doesn’t mean the lease company is going to be checking to see if customers are meeting their monthly or annual allowances. It’s the total miles at lease-end that count.

What happens if I exceed my mileage limit?

Excess miles charges are not penalties as many people think. The charges are simply fair compensation to the lease company for the unexpected higher depreciation and lower lease-end residual value (due to the extra miles) than you agreed to in the original lease contract.

You pay for that extra depreciation at a per-mile rate that varies by car company and vehicle model. Lower priced cars are charged at $0.15 per mile. Mid-priced cars are charged at $0.20 per mile and higher-priced cars at $0.25 or higher. Some luxury models charge $0.30 per mile. These rates are specified in your lease contract and are not negotiable.

For example, for a Honda Accord the rate is $0.15. If you drive 2000 more miles than your total allowance for the lease, you would be responsible for paying 2000 x $0.15 = $300 at lease-end when you return your car.

Here’s a little table that translates annual mileage to monthly mileage.

Annual Miles Allowed Monthly Miles Allowed
10,000 834
12,000 1000
15,000 1250

Unfortunately many people find themselves exceeding their mileage limits and don’t know what to do.

How can I know if I am exceeding my mileage limit if I’m in the middle of my lease?

There’s the manual calculation method: You look at the mileage on your car and and divide by the number of whole months you’ve been leasing. That gives you your average miles per month. Depending on your contract annual mileage allowance, look at the table above and see if you are over or under your monthly allowance.

Then there’s the online or mobile tracking and calculation method. If you are on your computer, you can use our Car Lease Mileage Calculator to determine how you’re doing on mileage and where you’ll be at lease-end — and how much you’ll owe if you’re exceeding and you continue to drive the same average monthly miles.

An iPhone app called LeaseCrunch allows mobile tracking of your lease mileage. It calculates miles over/under to date, compares actual vs allowed averages, has a graph view, projects overage charges — and works with both miles and kilometers. Track your lease miles on the go.

What can I do if I know I’m going over mileage ?

First, you cannot change your mileage allowance after your lease begins. It is what it is. If you know before you lease that you’ll be driving extra miles, you can “buy” the additional miles up front. See our article Extra Miles Car Lease for more details.

If you are over your miles in a lease, you have the following options:

– Drive your car less often by carpooling, using public transportation, or working from home

– Consolidate or eliminate trips to reduce time on the road

– Take shorter routes to common destinations

– Use rental vehicles for long trips and family vacations

– Periodically swap cars with a family member who drives fewer miles than you (make sure the other driver is allowed by your lease contract)

– Begin saving money for your projected overage charges — don’t wait until lease-end

– Purchase your vehicle at lease-end (you don’t pay mileage overage charges if you buy the car)

– Drive backwards to roll the odometer back (just kidding, of course)

 Lease mileage charges are not negotiable with lease companies. You signed the lease contract, and you are obligated to its terms and conditions.

Should I purchase my car early if I am exceeding mileage? Should I simply end the lease early?

Purchasing your leased car early as a way of avoiding lease-end mileage charges is not recommended. In most cases it accomplishes nothing and may actually increase your overall cost due to the way in which the lease finance company calculates your “early buyout” price. Add the additional cost of a purchase loan and required sales tax, and the buyout can easily become more expensive than simply waiting until lease-end, returning the car, and paying your mileage penalty.

Ending your lease early (“early payoff”) by returning your car before normal lease-end is usually not a good solution either. Early terminations are expensive. Again, the way in which a lease company calculates the payoff is not favorable to the lessee (you). Although this might seem to be a way out of high mileage usage, keep in mind that you’ll probably need to purchase another car (think additional cost, loan interest, taxes, fees) and your high mileage driving will quickly reduce the resale or trade value of that vehicle. The point here is that you pay for the miles you drive regardless of how you acquire your car — making $0.15 or $0.20 a mile for a leased car to seem not so bad. Miles never come free or cheap.

What if I am under my miles at lease-end?

This is the opposite situation to the one we’ve been discussing up to this point.

If you find that you’ll be under your mileage allowance at lease-end, you do not get a refund unless you purchased extra miles up front — most lease companies will refund any unused miles of the extra miles purchased up front.

However, your car may be worth more than the lease-end guaranteed purchase price specified in your contract (because it has low mileage). In this case, you could purchase the car from the lease company and resell it for a profit — or continue driving it. You can get an auto loan to finance the purchase from Auto Credit Express.

What if I decide to simply return my car, over mileage or under mileage?

If over mileage, you simply pay the excessive mileage fee (as discussed above) as well as any damage or disposition fee and you’re done with the lease. If under mileage, pay your disposition fee and any damage fee, and you’re done.

Don’t forget your tires when you return your car. If they are excessively worn, you’ll get a bill from the lease company. It’ll cost you much less to replace the tires yourself.

For your next car, whether a lease or purchase, you begin all over again.  Of course you should begin looking for the best deals including new-car manufacturer incentives. We suggest you use our free Car Deal Finder service, which gets you free price quotes from dealers in your area who are competing for your business. Go with the best deal you are offered.

If you don’t yet know what car you want or need to do some research, as well as get dealer discounted prices, then we highly recommend Edmunds.com as the absolute best site for both new and used buyers who like to do their homework before making a decision. This site has it all and makes the process easy and fast.


If you exceed the mileage allowance in your car lease contract, you have a number of options for reducing or eliminating overage charges that will result when you return your vehicle to your lease company. You also have several ways that you can track your mileage.

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