A typical 36-month car lease allows you to drive 12,000 miles per year. But what if you need to drive more than 1,000 miles in a month? A lot of people don't realize that a High Mileage Lease offers the flexibility of driving more miles. Those extra miles come in handy for drivers who take frequent road trips or have a long work commute. If you like the idea of driving a new car every three years and a lease interests you, a High Mileage Lease lets you add miles when you need to. Simply explain your driving needs and how many miles you think you need when you are talking to your car lease broker at the dealership.
Is a High Mileage Lease right for You
Does a High Mileage Lease make sense?
When considering your option on whether to lease or buy, a High Mileage Lease will cost you more per month than an average lease. Your monthly payment may cost as much as purchasing a car. Plus, the more miles you put on a lease car, the less its residual value will be when you turn it in at the end of your contract. You could even be upside down on the lease. In such cases, buying the car would be a better option.
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On a standard lease your mileage cap keeps you from being able to buy extra miles. Instead, you are charged 25 cents for every mile you drive over the yearly cap. That can get expensive. Ask your dealership about the price difference between a standard lease and a High Mileage Lease. Some lease agreements let you pay as you go for extra miles and some automakers allow you to drive up to 100,000 miles over the course of a lease.
A lot of people don't know that car leases allow for some wiggle room when it comes to your mileage limit. Most car leases can be customized to increase the number of miles you can drive each year as your cap. If you agree on the number of miles up front at the beginning of your lease, you will pay less for those miles than if you had a standard lease in which you pay for extra mileage at the end of the lease as excess mileage charges. Still, adding miles will cost you money.
Compare the Costs
Let's look at the difference in the monthly payment for a standard car lease, a High Mileage Lease, and for purchasing a new car. We'll look at the difference in monthly payments for each. In 2022, the average car lease payment in America was $505 dollars compared to the average new car loan payment of $700. Let's say your standard lease term is for 36 months and 36,000 miles. That's 12,000 miles that you'd be allowed to drive per year. If the monthly payment of your standard lease is around $500 per month, the same payment on that car under a 36 month and 100,000 High Mileage contract would be closer to $700. That is roughly what you'd pay per month if you purchased the car under a 60-month loan. Naturally, when you own the car, you don't have a mileage cap to worry about.
However, even if you are paying the same for your lease car as purchasing the vehicle, you can walk away from that car at the end of the three-year lease having had the mileage flexibility you need, and you can upgrade to a new model all without the obligations of a 60-month auto loan.
Remember that you can negotiate many aspects of an auto lease, including the annual mileage limit. Other things to consider is that you have the option of purchasing the car at the end of the lease, and if you are using the car for business, you may be able to deduct your lease payments as an expense. Also, higher lease payments can mean you'll pay less in sales tax.
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Be sure to read the entire lease agreement from cover to cover, including all the fine print. Review the numbers, all the provisions and the details before you sign. Make sure you understand the cost of extra mileage at the end of the lease contract. A High Mileage Lease can work well for someone who plans on driving more miles and likes the idea of always driving a new car with the latest technology, performance, and style.
Let Lithia Help
No matter if you are considering buying, selling, or trading a car, or leasing with or without a high mileage option, Lithia is here to help you. With over 75 years of experience in providing every aspect of personal transportation solutions to our customers, we've got your back.
