As a car gets older, it depreciates in value and the more miles it has on the clock, the greater that depreciation. So when you take on a lease on a car, you agree to a set mileage allowance over the period of the lease, with a cost built into your monthly cost agreement - the more the mileage allowance, the greater the cost.

The annual mileage allowance is there so that the finance company funding your lease car can estimate a resale value on the car once the lease period is over. They are 'lending you a car' and you agree to look after it in all ways before returning it.

But then there is the question of what happens if you go over that mileage agreement? This is when excess mileage charges come into play.

£50 note in a petrol tank

How much mileage should I choose for my lease?

When you are discussing your lease agreement at the start, one of the most important things on the agenda is the annual mileage. It is vital to choose a mileage allowance that reflects your driving habits because if you exceed your chosen mileage, you will be required to pay an extra amount, calculated based on how many additional miles you have done.

Your choice of mileage allowance is completely down to you. If you are confident that your driving habits are likely to remain unchanged from the previous few years, the difference between the mileage amounts stated on your recent MOT certificates will give you a fair idea of the mileage you’re likely to need.

Or, you can take a measurement of how many miles you do in an average month and multiply it by 12. It is best to average this over a year because you tend to drive more when the weather is bad during winter months, and also in the summer when you may find yourself on holiday and days out trips; so keep these in mind to make your estimation as accurate as possible.

What happens if I exceed the agreed mileage on the lease contract?

If you exceed the mileage allowance on your lease vehicle, any mileage over the agreed amount is charged at the agreed excess mileage rate per mile.

Exceeding mileage on a lease contract example

If the excess stated in your agreement is 5p per mile, and you exceeded your mileage allowance by 1,000 miles, you would be charged £50 at the end of your lease.

When getting a lease quote with Nationwide Vehicle Contracts you will be able to see details on your contract before committing to anything:

Excess mileage Nationwide Vehicle Contracts screenshot

There may be changes in your circumstances during the lease period such as moving home and changing jobs, which may affect the amount of daily and weekly mileage that you may do, and if this is the case it is a good idea to contact the finance company to see if a mileage extension is available to you.

It is up to you to monitor your own mileage; it will not be regularly checked by us here at Nationwide Vehicle Contracts.

Have more questions about excess mileage charges? Check out our FAQ section or contact one of our Customer Service representatives for more information and advice.


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