Car leasing is enjoyed by more people today than ever before. It has many benefits that you can’t get with buying a car. Still, before you make the commitment to lease a car, you should learn as much about what it involves as you possibly can. For example, how much do you know about the mileage restrictions involved in car leasing? If you don’t understand this very important part of the contract, you could be headed for trouble at the end of your leasing agreement.
When you lease a car, you’re actually paying for the depreciation of the vehicle that will occur while you’re driving it. The more miles a car has, the more it lowers the value of the vehicle. This is why the mileage that you’re allowed is so important.
How Is Mileage Determined
The mileage that you’re allowed is determined at the beginning of the contract. The miles allowed per year usually average between ten and thirty thousand. The number of miles that you’re allowed per year will affect the amount you’ll pay each month for the lease. If they over-estimate the mileage, you’ll be paying more than you really should each month for the car but you don’t have to worry about any added fees at the end of the contract.
If they underestimate the mileage, you’ll be paying a lower monthly payment but it could cost you much more in the end when the contract expires. Before you choose to lease a car, it’s recommended that you get a true estimate of the number of miles you travel per year so you can get the best deal possible. You could be paying more than necessary if you don’t have any idea of how many miles you drive per year.
What Happens When You Exceed Your Limits?
Exceeding your mileage limit is not something that you want to do. You will be charged a fee for going over your limit. The amount that you’ll pay will depend on your contract and the number of miles you go over. This could end up being a lot of extra money that you didn’t expect to pay.
If, during your contract term, you realize you’re going to need more mileage, you may be able to amend your limit but this is going to cost you more. Your monthly payments will increase because of the excess mileage the car will have when it’s returned. It’s best to make sure the mileage limit set in the beginning of the contract is accurate. This way, you won’t need to make any major changes that will affect the cost of leasing the car unexpectedly.
Car leasing is a great way to enjoy driving around in a new vehicle without the long term obligation of buying the car, provided you understand exactly what you’re getting into. Don’t be hit with unexpected fees at the end of the contract. Be prepared before you lease and have a good estimate of how many miles you’ll need the contract to cover.