February 17, 2021
Whether you are planning to lease or buy one of the biggest questions you need to ask when deciding on your next vehicle is what your mileage will be. This is because mileage can impact your fuel efficiency, the car’s performance as well as how often you’ll need to fill up or charge the vehicle, and what that will cost you.
However, the mileage is particularly important when looking at lease vehicles as you agree to an annual mileage as part of the lease terms.
In this article, we’re going to look at why the mileage is important for leasing, what you need to consider when agreeing to your mileage and what the limits are.
Why Is Mileage Important on Lease Vehicles?
As mentioned above you agree to a mileage allowance as part of your lease agreement. This is because the monthly rental price is based in part by the number of miles you do.
The more miles you cover the more wear and tear the vehicle is likely to have, and it will reach general maintenance markers earlier in the vehicle’s life. Alongside this the more miles on the clock at the end of the lease the lower the resale value will be for the lease company, which is why the mileage allowance factors into the rental costs.
If you opt for a maintenance package as part of the lease agreement the mileage might also factor into this as in general the more miles you cover the more wear and tear the vehicle will experience.
As well as the annual mileage allowance you also agree to an overmiles cost when signing a lease agreement. This is the amount that you will pay if when you return the vehicle at the end of the contract you have exceeded the total mileage allowance.
The overmiles cost is usually given in pence per mile so for example if your overmile cost was 5p per mile and you did 1,743 more miles than your allowance provided you would have a charge of £87.15 at the end of the contract.
It’s important to note that if you opt for a maintained lease then there will usually be two overmiles charges, one for the lease agreement and another for the maintenance agreement.
Changing Your Contractual Mileage
If you find that you are driving more or less miles than you expected to when taking out the lease then you can amend the mileage.
You will usually not be able to make any amendments to your contracted mileage until you have had the vehicle for at least 12 months, as the funders like to have an accurate estimate of the annual mileage before making any changes.
As the monthly rental costs may change because you are amending the terms of the agreement the lease funder will usually provide you with a quote and you will then need to sign and return this before the amendment is put into place.
If you would like to make an amendment to any vehicle you arranged through Wessex Fleet then please give us a call on 01722 322 888 and one of our Customer Service Advisers will be happy to help.
You will need to provide the current mileage of the vehicle, what you would like the annual mileage allowance to be amended to and an email address we can send the quote to.
Please note that most quotes for amending the contract are only valid for 30 days and if the quote expires and you require a new one the prices may not be the same.
Minimum and Maximum Mileage Allowances
Wessex Fleet works with all of the UK’s leading funders in order for us to be able to provide you and your business with the best leasing deals available.
As we work with a number of finance companies the minimum and maximum mileage allowances they allow do vary.
In general, we are able to offer a minimum annual mileage of between 5,000 and 8,000 miles. If you do not think that you will reach the minimum mileage you can still lease the vehicle but there is no additional benefit or financial incentive to remaining below the mileage allowance.
There is also usually a maximum mileage allowance for over the duration of the contract. Again, the allowance varies between funders and some have different limits based on whether the vehicle is a car or van, and the fuel type.
If you decide that leasing is the right choice for your next vehicle or one in your business’ fleet then we will advise you of any minimum or maximum mileage allowances and work to find the best price for your mileage needs.
If you have any questions about leasing for yourself or your business please give us a call on 01722 322 888.