25 May 2023
Excess mileage refers to the additional miles driven on a leased or financed vehicle beyond the mileage limit specified in the contract. In car finance agreements with mileage restrictions, exceeding the agreed-upon mileage limit can result in additional charges or penalties imposed by the lender or leasing company.
Understanding excess mileage is important because it helps borrowers or lessees plan their driving habits and estimate their expected mileage. By being aware of the mileage limits set in the car finance agreement, individuals can avoid incurring additional costs by closely monitoring their mileage or considering higher mileage allowances when negotiating the contract.
Suppose you lease a car with a mileage limit of 10,000 miles per year for a three-year term. If you drive a total of 35,000 miles over the lease term, you would have exceeded the agreed-upon mileage limit by 5,000 miles. The leasing company may charge you an excess mileage fee for each mile over the limit, typically calculated at a predetermined rate. It's important to be mindful of mileage restrictions to avoid unexpected charges at the end of the lease term.
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