Too Many Miles On Your Leased Car? Here Are Some Options For You - Quicken Loans Zing Blog
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 you looking to move closer to work to save on mileage? Let me know in the comments section below or contact a home loan expert today!

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This Post Has 104 Comments

  1. Let me start off by saying that I am no expert. I think there is a lot of missing information people are missing on a lease. Anyone can correct me if i am wrong but I will try to dummy it down. Lets say you have a lease for $20,000 car. Let say that you contract is $200 a month for 3 years and that at the end of lease you will pay $10,000 if you want to keep the car. We will also say that you are aloud 10,000 miles a year and any overages will cost .15. We will also say that the contract is with Chase Finance. Fist off do not believe the dealer what ever they says. Their job is to get the most money out of you. In any negation you must be will to walk away. This includes wither you are buying or leasing. Ok, now let say a year and a half has gone by. That leaves half of your lease payments left. So that is $3,600 (18monthX$200) left to pay on lease. lets say also that you are at your max mileage of 30,000 (3X10,000 a year) and that you will put on 30,000 miles more by end of lease. So that extra mileage will cost you $4,500 (30,000 milesX$0.15) at the end of lease. So the question is when do you bail out of lease? They say to get out of lease you should not do it more then about 6 month before end of lease. The reason is you still have to pay off the rest of the lease. So if you get ride of the lease 6 months early you will owe $1,200 as to 18 months $3,600. This amount will be added to the cost of the new car you will buy or lease. The dealer is not going to go negative cash flow to make a sale. So you have to figure out how much will the going over the limit cost you if anything to what you owe left on the lease. I been told by the dealer that as long as you do not give it back to the bank (In our example Chase) you do not have to pay for the miles overage. This is negotiable. Dealers may ask for it anyways but think of it this way. Most likely they are not paying it when they buy it from the bank. Your not selling it back to the bank the dealer is buying it. So tell them no and see how far you get with it. And yes walk away and get a 2nd opinion from a different dealership. If you have bad credit your going to have a harder time getting a good deal. Hope this helps a little.

    1. Hi Leesa:

      It depends on the dealership. They may or may not be willing to work with you, but it’s something you can try to negotiate.

      Thanks,
      Kevin

  2. I have leased two cars and I have never paid any extra miles. I have never even return the car to the same dealer. Guys.. dealerships just want you to lease from them. they want your monthly money. they always take my lease car and pay the remaining to the dealer that i leased it. i have been 10K to 15K miles up from my leasing contract. then I start a new lease from scratch.

    1. Thanks so much. Sounds like
      If I just lease from another dealer I will be set. The new dealership
      Will pay off the extra owed in order to get my new business. Thx so much!

    2. I find it hard to believe it would cost nothing to be that much over mileage. Your payments would have to be higher on your newer lease including at least part of the mileage costs owed. Sorry… I don’t trust dealerships to be doing you any favors when it comes to dollars. I’m assuming somewhere in your new leasing contract there is a dollar figure covering some of that cost.

    3. How do you return the car to another Dealer? I want to do this. My lease will be over next year and I’ll be maybe 20k over my miles.

      1. It has nothing to do with the dealership………. Whoever said that is completely misunderstanding the lease. The lease is through the bank and consumer…. Just like a traditional loan. The dealership is the middleman in the agreement. You can trade the lease in for a new lease as stated above or to purchase but the dealership treats this just like any trade in. So the negative equity involved via mileage or other will reflect on the new loan or lease. I hope this helps………………..

    4. I’m in a similar situation to you. I’m 17k over my lease miles due to bad life luck. Are there any specific dealers you went to, that’s took that old car from you ?

  3. Hi

    I am stuck on my truck lease. I have already gone over 37k miles. I know… I am in deep trouble.

    any suggestion on how to get out of it? I know if I return it, I will have to pay 12k dollar for extra miles. I am just trying to find the best way to get out of this hole.

    1. Hi TJ:

      I would talk to the dealer. Sometimes, if you do another lease with them, they’ll give you a break on the mileage. That would be my best advice.

      Thanks,
      Kevin Graham

  4. Most, if not all personal leases (non-commercial) are closed end, meaning the terms are agreed to at signing. If your residual is $14,000 based on 45,000 miles, that is what it would be if you wanted to buy it when the lease is complete. That is the price of you have 10,000 miles or 100,000 miles. The purchase at lease end is independent of the car’s actual value, because the residual is a calculated “guess” by actuaries. Where you run into issues is the more mileage you are over, the less actual value the car has. If you buy it for cash, this is only a concern for you. If you have to finance some or all of it, the finance company will determine what they will lend based on the age and mileage.

    I am in a situation where my job is changing. I am 1 year into a 3 year, 45,000 mile lease. I currently have 16,000 miles. My new job, plus other commitments will have me driving close to 30,000 miles a year. I expect that this time next year I will be at my contracted mileage. I will turn it in, and pay the last year of payments at once. This will also satisfy the contract. I agreed to make 36 payments of $179, at which point I will turn the car in with 45,000 miles, and write a check for about $2,100. I’d rather do that, than continue the contract (where I still have to pay that anyway) and write a check for $4,500 for a 30,000 mile overage. VW Credit would prefer this as well, since they can sell a 2 year old car with 45,000 miles easier (and a dealer can certify it) than a 3 year old car with 75,000.

    1. What a great idea!! I’m thinking of doing a lease and figured I’ll go over as well!

      However, in our area they do get people that want your specific car (and there is also the fact that dealerships call back 60% of vehicles if another person wants it! )
      I’m thinking at the 2 year point, if they haven’t called me. I’ll tell the dealership That I’ll like to start shopping around for the next Vehicle and then they’ll start listing it as “coming soon” on their website. Then it will be somewhat “bought out” before the agreed miles are put on the car!

  5. Ok I’m a little confused I have a 2 year lease on a KIA optima at a low monthly Payment. The buyout at the end is 14k approx. I am currently 400 miles over the allowed amount. I thought if we decide to buy it at the end the overage won’t matter. But it sounds like my buy out will now be higher. Correct?

    1. Hi Margie:

      That depends on the dealer, but if you’re planning to buy out, I can’t imagine it would be too much more if at all.

      Thanks,
      Kevin

    2. Hi Margie,

      It does NOT depend on the dealer. The buyout price of 14K approx. is what you will pay at the end if you decide to buy it, no matter how many miles you have on the car.

    3. Yes. It will be! Do you want to buy it? If you buy it and get a “truth in lending” from a bank or credit union you can likely still stay with the same payments! Especially if you’ve been keeping up with your payments!

  6. I’ve been leasing from the same dealer for years and they have never charged me for any overages as long as I take another vehicle (which I always do). I’ve gone over as much as 12,000 on my leases.

  7. HI MY LEASE IS UP IN 30 DAYS I WENT OVER MY MILEAGE BY 8200 NOW NOT ONLY DO THEY WANT ME TO PAY .18 PER MILE
    THEY SAID I HAVE TO PAY TAX ON THAT IS THAT LEGAL

    THANK YOU

    1. Hi Patricia:

      That might depend on the tax law in your state. I think the rationale might be that it’s like selling you an upgraded mileage plan, so it’s like paying sales tax. However, I’m not an attorney and don’t know whether that’s legal.

      Thanks,
      Kevin Graham

    2. It is not illegal. EVERYTHING is on your lease contract- the mileage allowed- the penalty for each mile over that allowance. The tax has nothing to do with the manufacturer or the dealer, that is your state, and just like they collected tax on your lease payments and any other services the dealer provided, the mileage penalty is subject to tax. No one is scamming you, you just didn’t bother to read and understand your contract.

  8. HELP!! YIKES!!! I have a 4 year lease and I’m almost at 60K…Just made 2 years this past month 2/2017. I still have 2 years to go. I have a 2015 Kia Optimum LX….What are my options. I purchased it from a Kia Dealer. How much will I end up paying at the end for overage. I have no choice but to continue driving 110miles a day at least 5 days a week.

    1. That sounds like a difficult situation. You can calculate how much you’ll pay at the end for an overage by reading your contract to see how many cents per mile you pay when you go over and having a rough idea of your mileage at the end of the lease. I might try talking to the dealer and seeing if they will offer you a deal on extra mileage at this point. If they will, it could be more cost-effective than paying the overage. I would ask them about your options.

  9. What if you want to roll into another lease, will the dealerships work with you as far as being over in miles?I’ll pay the miles as long as I’m not walking away without a car.

    1. Hi Kristina:

      That depends on the dealership, but I think many will work with you particularly if you’re willing to lease another car from them.

      Thanks,
      Kevin Graham

      1. It happens to me so I lease another car. The problem is that I get another lease without finishing old one, my new car it’s carrying the prize I owe on the old lease. This means that I’m stuck on a 2015 car, out of miles cause it’s one more year to go. I pay $20k and still owe $19 . I’m talking about a 2015 Honda Accord LX paying more than$40k this is insane. So I just park the Honda and bought a 01 toyota for $2500. I have no choice and keep paying for a car I can’t used. I NEVER GO DOR LEASE AGAIN.

    2. Yes! You can always begin a new lease early before you go over your mileage! A used car with, let’s say, 38k miles is worth more as certified used than the same one with 44,900. One thing to consider, however, is how well your leased vehicle keeps its value. if you lease a vehicle that holds its value, you will get a great deal on a new lease. I swapped my 2012 with a dent I picked up in parking lot, plus bald tires for a brand new 2015, with nothing down, and payment went up like $30 a month. Mileage is always a factor when considering lease vs buy, but the included service, new car every couple years, and overall peace of mind is always more valuable (to me) than owning a depreciating asset.

      1. Most important thing here is to make a decision and discuss your options before you go over your mileage. You dealership will prefer to get you a new lease and sell your car with lower mileage, plus you have the leverage if you don’t “need” a new car.

      2. I agree 100% I was just in a situation which made me have to consider every viable option… but what it came down to was I either buy a 2k car and risk it breaking down or lease a new car. the piece of mind alone was enough for my family and I. Not to mention all the little perks that come with leasing!!!! So I went for it… couldn’t be happier with my decision…

      3. Thank you Ryan, that is exactly my reasoning inspite of others telling me otherwise. ask me to dismantle a pc and put it back together i will be fine but i am no mechanic and know nothing about fixing cars so when my saturn aura started giving me issues back in 2014 and just would’nt start , i realized i do not want this to happen ever again it is a very nerve wracking feeling for me. peace of mind is more priceless.

      1. Hi Ali:

        Sometimes if you get a car with the same dealer, they’ll cut you a break on the miles. If you’re looking to avoid paying the fee, that might be my best advice. Hope this helps!

        Thanks,
        Kevin Graham

  10. I’m starting to look at cars to lease and possible buying it out at the end of the 3 years. Though – is it better to purchase the mileage up front or pay at the end — Is it the same cost for the miles either way.? I was quoted .30 cent for my lease. Or would it be cheaper mthly to have a lower lease with less miles and purchase it knowing that I’m will be over 10,000 miles.- ?? Any thoughts Thanks

    1. Just don’t go over mileage and don’t buy it out. Just get a new lease before you go over your mileage. There is no reason to own something that depreciates in value. Included service, peace of mind, new wheels, will always be worth the monthly payment… and I’ve heard that even if you own a car for 10 years, you take every dollar of maintenance and payoff and divide that by the 120 months, you’ll be damned close to your lease payment…

  11. Best option hands down. SELL the lease to carmax. They will often times be able to give you cash in your pocket and buyout the lease. I have done this and most of my friends. Varies by model and residual obviously….

      1. Hi Pat:

        I don’t know how the program Steve is referring to works, but I would be very skeptical. You probably can’t sell your lease because you don’t own it.

        Thanks,
        Kevin Graham

  12. A couple of options you didn’t touch: You could look into having someone take over your lease. It’s a little tougher when you are nearly over mileage but if your situation/commute changes it’s a great place to start before you start racking up the miles. The other option is a lease pull-ahead. This generally works best if you have a year or less left and search for the best offers from the current car maker or a direct competitor.

  13. I’ll be 30k over my lease but I’m almost 70 so I won’t be driving ever again and I don’t care about my credit so I’m just gonna tell the dealership and leasing company to take a jump off a high mountain.

    They can get in line to sue me, I’ll be dead soon enough

  14. I have a lease that is about to end. I owe $4,000 on over mileage, so the dealer tells me. I do not have $4,000 to give them. They dorpped the amount to $3500 if I buy the car. They will use the $3500 as a down payment. I don’t have $3500 or a cosigner to purchase the vehicle. At this point I have no options???

    1. Hi Melissa:

      My only advice would be to try to negotiate with the dealer, but I’m assuming that since they want you to buy the car, they are past the point wanting you to take on another lease. You could try something like a short-term personal loan to pay it off. That might be your best option. Good luck.

      Thanks,
      Kevin Graham

  15. Hi,

    I also checked buy out but the dealer told me that even if I buy the car I will need to declare my mileage and pay for the over. Not to mention that my residual is around 10k more than the Kbb value so I acruelly paying 10k more than the market value for a car with 12k more miles than other cars. I thought that by leading a new car the companies will have some incentive to sweeten my nightmare situation . An right now I am paying dollar for every miles so I need a quick solution to say the least 🙁

  16. I have a close friend who leased her car with a 4-year term with 40K miles. She is nearing the end of 2 years and will hit 40K miles within the next few weeks so she plans to end her lease early. She thinks she won’t have to pay for the excess miles since she’s terminating her lease early but the dealership told her that the residual value was $29K and she said when she checked Kelly Bluebook, the value of the car was only $19K. She doesn’t want to buy the car, but just wants to get out of the lease early.

    Will she have to pay the excess mileage or just the extra $10K that she owes for the residual value? We’re both very confused about this. I’m trying to help her out as she isn’t the most financially savvy person and she really can’t afford a big chunk payout. I buy my cars outright so I don’t personally have experience with leasing.

    Appreciate any helpful info. Thanks.

    1. Hi Annie:

      As far as I can tell, higher residual value should be a good thing unless the dealer’s saying they don’t want to buy the car for that much and won’t do any kind of transaction with her. They can get more out of the car if it’s valued higher. She might have to pay for excess mileage.

      Thanks,
      Kevin Graham

  17. I think a lot of people are missing the overall concept of a lease here, and primarily because we are never educated on a lease as well as a simple interest loan. You have to look at the whole picture. In a simple interest loan 90% of the time you will have negative equity on the car unless you make a significant down payment, you will also have a 60% higher monthly payment. I have 2 cars, one I financed the other I lease. I have $15000 of negative equity in my purchase from a year a ago. My lease I just traded my last lease for had 10,000 miles over my allowance and with negotiation I still only paid my first payment out of pocket and had a low monthly payment on my new lease. Like ANY car buying you need you do some homework before going in to the dealership. I will never purchase again unless it is to buy out my lease. I don’t know anyone who has not had at least $5000 of negative equity in a purchase. I’ll take a few hundred or a thousand or two in fees for a much lower payment any day.

    1. Hello,

      How did you negotiate the extea 10,000 miles? I am already 12,000 over and have 9 more monthly payments. I went to the dealership where I leased the car from and I wanted to trade to a cheaper car but somehow they rolled everything into the new car and I find myself paying same high monthly payment for a much cheaper car. Should I go and check other car dealers? It is a Mercedes and they told me I can go to wherever I go but they don’t think I will get good deal with my extra mileage?

      1. Hi Amir:

        It can’t hurt to shop around. There’s no harm in checking a couple other places. It should also be cheaper to get the mileage up front rather than paying an overage at the end.

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