Too Many Miles On Your Leased Car? Here Are Some Options For You

Too Many Miles On Your Leased Car? Here Are Some Options For You I currently find myself in a major pickle. As I’ve stated before, I’d rather spend a little extra cash on things I use every day such as my car and my cell phone. Up until a few months ago, my spending had never gotten me into any trouble. Fast forward to today and unfortunately for me, I can’t make that same statement.

A couple years ago, I was in the process of getting a new car. At the time, I was unsure whether I wanted to buy or lease a car. I ended up leasing, with the rationale that I’d rather drive a new car every couple years than be stuck with the same one for an extended period of time. Now, I find myself in a not so envious position. At the time, I lived five miles away from work, so putting too many miles on my car was a nonissue. Now, my daily commute logs about 130 miles on my odometer. Do you see where I’m going with this?

Let me break it down for you. My current lease is for three years and 45,000 miles. Driving 10 miles roundtrip to work and home at my previous job was no problem at all. Driving 130 miles roundtrip now is an absolute killer. I’m stuck with my car until April of 2013 and as of right now, I’m nearing 44,000 miles. YIKES!

As much as I wish I could limit my driving to 1,000 miles over the next seven and a half months, I easily have a better chance of winning tonight’s $110 million Powerball. So, what are my options? I’m currently looking to move closer to work, which would cut down on my miles, although not enough to make up for all the driving I’ve done this summer. I came to the realization about a month ago that I was going to hit my predetermined mileage way ahead of schedule. For those of you who find yourself in the same jam as me, below are some of our options.

Pay the extra mileage fee. Each dealership is different when it comes to paying for the amount of miles you exceeded. The fee per extra mile could be as low as $.10 per mile and as high as $.30 per mile. After determining how much you owe per mile, do the math. Say you owe $.15 per extra mile and you exceeded your mileage by 1500 miles, you’d owe $225. However, if you’re in a situation like me and expect to be closer to 8,000 miles over, I’d have to pay $1,200. It all comes down to how much you’re willing to pay to end your lease.

Purchase the car. When you decide to lease a car, you agree to pay for the car’s depreciation. The remaining price is the residual, which is the same as the lease-end purchase price. If you choose to buy the car at the end of the lease, you’re agreeing to pay for the part of the car’s original price that you haven’t already paid.

Here’s where it gets tricky. When you originally signed for your lease, you agreed to a certain price you could purchase the car for at the end of the lease. That purchase price was determined by the number of miles for the lease. For example, say your lease is for three years and 45,000 miles. If you go 7,000 miles over your lease mileage and want to purchase the car at the end of the lease, you’ll be paying the price of a car that has 45,000 miles on it instead of the 52,000 it actually does.

Park it. If you don’t want to pay for extra miles and don’t plan on purchasing the car when the lease is up, another viable option is to park it. With this method, you’ll need some extra cash or friends that are willing and capable of driving you everywhere. If you decide to not drive the car anymore and have some extra dough, you can go out and purchase a cheap used car that you can drive until your lease is up. This is certainly an option, although it gets to be a bit of a hassle when you consider you’ll have to pay for a new registration, insurance, etc.

If purchasing another car for the time being is too much, cut down on your miles by carpooling to work and any other place possible. If you know you’re going to go over your mileage, you can at least try to minimize the damage to your wallet by driving only when absolutely necessary.

Start saving. Get a head start on the money you’ll owe for the overage miles by saving now. The sooner you start saving, the less you’ll have to worry about when the time comes that you have to start paying for the miles. For instance, if the scenario I presented above is correct and I owe $1,200 after my lease is up in April, I could start saving $25 per week from now until then. If I did that, I’d have approximately $675 ready to put toward the extra miles.

After you signed the lease, it’s out of your hands. You’re obligated to its terms and conditions. For those of you on the opposite end of the spectrum and who find that you’re under your allotted miles, you’re prize is a big…whopping…nothing! You don’t get a refund unless you purchased extra miles for your lease.

How many of you have been in a similar situation than the one I find myself in? Are there any options I left out? Let me know in the comments section below!

 

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15 Responses to Too Many Miles On Your Leased Car? Here Are Some Options For You

  1. Keish November 12, 2012 at 10:08 pm #

    Ohh sheesh! My situation is very similar. I’m currently at 75,000 miles & my lease is up at 80,000 miles which is supposed to end in March of 2014. So I’m looking at possibly being over by 10,000 miles at this point. I really don’t know what to do! I moved also my daily commute went from about 20 miles a day to 44 miles. I cant afford another car because of my current car payments. I am sooo stuck & lost. I would cry, but all that’s going to do is make my nose stuffy & hard to talk to people about my situation :(

  2. Jessica March 19, 2013 at 10:00 am #

    Im in a major jam myself. My lease is up in june… and i know for a fact that im going to owe alot of money!!!! I got the car for 12,000 and ive gone over by 50,000 by all the driving i did. Im a nervous wreck… and i dont have a job right now. I feel like im going to be in the biggest jam of my life!!! :-( i wish i had enough saved up.i wish i never got that lease! I dont know what to do

  3. jasmine April 3, 2013 at 2:50 am #

    I don’t know what to do. My work makes me use my car every day to do errand. I live close about 3.4 miles and my work make me run errands about 6 miles if not 8 miles per day 5 days a week . I am paying my car $585 a month ,3 years 10,000 miles per year . i am not not half way on 2 years yet and i already driven 24400k already that being said what should i do with my work that makes me use my personal car to run errands . should i charge my work some of my car payment ? plus mileage and gas? please help

  4. Dia April 18, 2013 at 12:43 am #

    Hmmm. I am in a similar situation with my lease. Yet, I am not sure i understand your thinking with the options (except for park it in the garage). Even though you might be over the limit, let’s say 8k miles, you will just pay an extra $1,200-1,300 at the end of the lease. Purchasing? You might be overpaying at least 2k with the extra mileage. Using your friends and taxis might get just as expensive long term. As well as moving closer to work, as it may cost you more per month.
    The only option I see is to suck it up and start saving that extra cash for the end of the lease.
    I was wondering though, what happens in a situation like.. Me coming to the dealership to drop off the car at the end of the lease and telling the dealer that I want to pick up a new car. Today. Will they still look at mileage?

  5. Joan Price May 16, 2013 at 10:08 am #

    I have been trying to learn more about loans and leases. I recently searched lease and loan managing software and found this article. It was very informative an I really enjoyed reading it.

  6. CRusso July 11, 2013 at 9:21 pm #

    There’s a “payoff” amount you can obtain online through your lender for your lease. You may be in a positive equity situation or at least even with how much the car is worth vs. your payoff. In that case, I would do a traditional trade-in instead of waiting until the lease ends and having to pay the mileage overage. The dealer will offer you an amount for trade-in and if it’s close enough to your pay-off just trade it in on another lease with higher mileage or a traditional purchase.

  7. karen wolfgang July 23, 2013 at 11:01 am #

    My advice is if you go over the miles just trade it in on another car at the end of your lease .Ask for the highest miles you can get on a new car .As long as you trade again you don’t have to worry about miles you just wont get the equity value for a new car.By the way you can trade that car in anywhere it does not have to go back to the place you first leased it from.

  8. Dav Wayman July 31, 2013 at 8:13 am #

    haha! you might end up buying the car if you go for an extra mile with leased cars :D
    Thanks for sharing this one.
    And by the way, great tips.

  9. Jen September 6, 2013 at 7:47 am #

    I’m in the same boat and totally screwed! I have a 33 month lease and just realized I signed a 10,000 year lease which gives me 27,500 miles for the entire lease term. At the time I did not drive alot, however that changed a few months into the lease. Now my miles will be up in December and my lease is not up until Feb 2015. Meaning if I continue to drive at the rate I have, I will be about 21,000 miles over at a rate of .25 cents a mile. I seriously don’t know what to do as I don’t live on a bus line nor do I have family or friends to drive me around. I’m seriously considering parking the car and buying a used car but damn does that hurt because then you still have to make the car notes for a year and can’t even use the car. The other option I’m going to look into is trading the car in but I don’t think that will work because normally they try to roll everything into the new vehicle. I’m just super screwed!

  10. Linda Bullard October 8, 2013 at 7:49 pm #

    I found myself in the same boat a few months back when turning in my leased car. I was 12,000 miles over and owe Ford $2300 because of it. I tried to work out a payment arrangement with them like the dealership told me I would be able to do and they didn’t go for that they wanted all of it in less than 30 days. The car I had on lease was a total lemon off the showroom floor and was not an option to buy out. I had to have the transmission rebuilt, a new a/c unit put in, & a few months after the a/c unit it started dripping water on the passenger side floor. The transmission still wasn’t right after the dealership rebuilt it. I hoped ford would understand and work with me on the miles because of all the issues I had and I didn’t go after them for the lemon law, but I was wrong. All they care about is getting there money!! Where Karen Wolfgang said you can trade it in and assume the amount for the miles that is UNTRUE!! I was not able to do that! I purchased a new car and owe for the miles. I have been paying them what I can when I can and they are not liking it but I have no other choose $2300 isn’t something I just have laying around. Im trying to keep my credit in good standings and do right by the lease company. My best advise to anyone looking to lease is make sure you know the miles your going to use and don’t go over your miles.

  11. Royal November 24, 2013 at 7:29 am #

    I know it seems all hope is lost and you are going to be forking out cash hand over fist to get out of your lease but go running to the bank just yet. There are a few options that you still have left. Option 1: take your vehicle back to the dealership and have it appraised. It’s quite possible that you have enough equity in your vehicle to cover whatever payments you have left or at least a portion of them. If there is still some negative equity you can roll it over into a new lease or retail purchase. Option 2: swap your lease. Yes, I said swap your lease. This has become a very common occurrence for people who either can no longer afford their payments or just want to trade sooner than expected. It is perfectly legal to sell your lease to another consumer and have them take over payments as long as the bank that bought your loan approves it. Many people will jump at the chance to get a newish car with no down payment. Option 3: buy more miles for your lease. If you go back to the dealership where you originally bought the car and ask to purchase more miles for your vehicle you will end up saving money in the long run and continue driving your current car. All three of the choices are viable options and I suggest you all look into each one to see what is best for you.

    Sincerely,
    An Honest Car Salesman.

  12. Celeste March 7, 2014 at 3:41 pm #

    Thank you, Royal. There is hope. I am already 11,000 over my lease and these guys knew that I have to drive many miles for my job when I started leasing in 2011. Why can’t a woman just walk into a dealership and expect to be taken care of instead of just taken? Oh, well, no one to blame ‘cept me. I’ve been able to roll over into the next year for my car, but my monthly payments keep going up. sigh. I do like the option of getting into a new vehicle with high mileage if it will keep the monthly low. That’s all I care about.

  13. Marc March 7, 2014 at 5:23 pm #

    I am about to turn my car back in with about 65000 miles on it, My lease is up in a month and It was for 45000. I will have to pay .15 cents per mile over. Plus anything else they want to charge me for.
    I thought about getting another leased vehicle and rolling over the excess into another lease, but in 3 years I was afraid I would find myself in the same situation.

    My personal resolution. I paid 3750 for a 2002 Chevy Malibu with 150,000 miles on it. And I am just going to turn the leased vehicle back in. Yeah Im gonna owe something like 3000 for the overage among other fees. But on the bright side, I will not be paying on a leased vehicle and if this car lasts me 2 years and only cost me 1000 dollars in maintenance over the next two years…. I have saved my self 4000 dollars easily. (leasing amount is 3600/year) for me, this was the best decision I could make. Good everyone!

  14. Rob March 14, 2014 at 11:23 am #

    I have a bit of a different story. My lease was for 120,000KM or 60 months. at about the halfway point I wrote off the vehicle it had 100,000km’s on it. I had planned on parking it for a while to let the Km’s catch up but like I said the unheard of happened and it got wrote off. Now the lease company says I owe them and extra $2800 for the mileage on the car at write off. they claim I should have been under 60,000K and so they prorated my mileage and came up with 40000K over so there fore I owe them and extra $2800. so I owe on a car I don’t even owe anymore, not my fault it got written off before the end of the lease. Like was said make sure you are aware of the mileage you will be putting on a leased vehicle before you sign or you could find yourself owing a lot of money in the end.

  15. Tim March 18, 2014 at 10:45 am #

    One thing that people are missing is when someone leases a car sometimes it is to reach a budget or payment. A lease is almost always less per month than a purchase. When a customer decides this they normally have not asked about a lease to begin with and already know that they drive more than the miles allowed in the lease to turn it in afterward and just walk. If you go looking for a car that you know will have a lot of miles on it in a few years, weather you make a purchase or lease you are still putting on the same amount of miles are you not? So what is the harm in just buying out your lease and structuring a purchase agreement for the set in stone residual? I mean a 60-72 month purchase is the same amount from month one to the last payment. Lease your vehicle for the 36 months then for another 3 yrs finance the rest!!! What is so hard to understand in that?

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