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Excess-Mileage

02/02/2015

Guide to vehicle leasing and excess mileage
Even though an increasing number of individuals and companies are looking to fix their motoring costs, there is still some trepidation from some parties about excess mileage.

Car Leasing Contract

Excess mileage can be thought of as a penalty – high mileage drivers often write off contract hire before they have even priced it up as a result.

Is your mileage stopping you leasing a car?


Leasing companies know that not everyone drives 10,000 miles per annum. They have also fairly recently started introducing 5000 miles per annum contracts for genuine low mileage users.

The lower the mileage, the more the vehicle will be worth to them at the end of the contract period so of course, the monthly rental will be lower. The higher the mileage, the less it will be worth – obviously, the rental will be higher as a result.

But will you be penalised on a leasing deal for high mileage?


There is a short answer to this and that is no. You won’t.

A relatively long time ago, finance companies perhaps weren’t as astute as they are with setting excess mileage charges. Customers would often take out leases with really low excess mileage charges and deliberately take out a 10k per year mileage term - even if they knew that they would do more. This would work out cheap for the customer but would actually sting the finance company.

As a result, excess mileage charges went up and funders were often thought of as penalising customers if they did more than 10k per annum.

These days, when you get your contract hire quotation, your monthly figure will be worked out on what mileage you are doing – this will be accurately estimated based on predicted future values (set by CAP Monitor). This gives everyone a fair deal, including the customer, as if you were to drive the miles as set in your quotation and bought your car instead, you would stand to lose the same amount (if not more, after taking the finance company’s buying discounts into account).

How are excess mileage pence per mile costs calculated?


Your excess mileage charge will have been calculated in accordance with actual running cost data. It is definitely not a penalty – it is designed to mimic the drop in value that the vehicle has depreciated as a result of any extra mileage that you have driven.

Can you increase you mileage whilst in contract?
The good news is you can, you if you have miscalculated your annual mileage you need not worry. You can call in and request an increase in mileage quotation. They will increase your monthly rental to cater for the increase, but will be cheaper than paying an excess.

Have your say on excess mileage


After reading this, do you think excess mileage is a bit of a rip-off or a ‘con’? Are you now enlightened as to how your leasing costs are calculated?

Why not get in touch with us @car4leasing and let us know your thoughts? All of our leasing deals can be found right here on this website – take a browse and compare mileage and prices online any time of the day or night.

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