If you decide to lease, consider whether a high-mileage lease could be right for you.
Buying vs. Leasing
There are advantages and disadvantages to both buying and leasing a new vehicle. The right choice depends mostly on the individual’s personal tastes and driving style. For example, if you like the idea of driving a new model every two or three years or so, a lease is likely your best option. By the same token, buying is probably best if you simply can’t get past the feeling that you don’t own the vehicle you are driving. Another important consideration that is often overlooked is mileage. Drivers who intend to spend a lot of time behind the wheel may think that leasing is the way to go, believing that it is better to put that heavy mileage on a vehicle that they will be turning in and soon won’t have to worry about. Standard leases, however, come with annual mileage limits, and if a lessee goes over the limit, it can cost a pretty penny in additional fees.
Mileage Limits Explained
Normally, standard auto leases come with annual mileage limits of 10,000 to 15,000 miles, most coming in with 12,000-mile annual limits. Since the average American driver puts about 13,500 miles on their car each year, according to 2018 data, a standard auto lease works well for most. Drivers who put on more miles than the annual limit pay additional per-mile fees of $0.10 to $0.25. That might not sound like much, but if you pass the annual mileage limit by a lot—and regularly—your lease costs can skyrocket. Fortunately, there is an option that could solve some of these problems: the high-mileage lease.
About High-Mileage Leases
A high-mileage lease is one that is written with a higher mileage limit to begin with—usually 18,000 to 20,000 miles. That way, the lessee can drive further per year without running up against those expensive over-the-limit per-mile fees. The catch is that you will make higher monthly lease payments. Considering the trade-off between higher monthly payments with a high-mileage lease and above-limit per-mile fees with a standard lease, is a high-mileage lease worth it? The answer is, in most cases, yes. The bottom line is what is important here. The closer you get to the mileage limit on a high-mileage lease, the more you will save. On the other hand, if you estimate that you will only exceed a standard lease mileage limit by a few hundred miles, you are more likely better off with a standard lease and paying the additional per-mile fees.
How to Get a High-Mileage Lease
Most major dealers have one or more high-mileage lease options, so all you have to do is ask for one. However, availability may depend on a number of factors, such as model or geographic location. The devil is in the details, so be sure that you have taken the time to estimate as accurately as possible the number of miles you intend to put on the vehicle each year and that you clearly understand the terms of the proposed lease. You’ll definitely want to run the numbers through your calculator before signing on.
High-Mileage Leases and Extended Warranties
Another factor to consider is purchasing an extended warranty on your new, newly leased car. Let’s say, for example, that you sign a three-year high-mileage lease on a brand-new vehicle with a three-year or 36,000-mile warranty. That averages out to 12,000 miles a year, meaning that if you intend to drive your vehicle more than that—which is what a high-mileage lease is for—then you will have some period of time during the latter stages of your lease when the vehicle is out of warranty. That means you’ll be on the hook for all additional repair and maintenance costs, which could add up, considering the high mileage that will be on the vehicle by then. It’s a good reason to consider shelling out for the extended warranty upfront.
